Sustainability Report 2022

CONTENTS
01 | Table of contents
03 | Message from the President
05 | Basic Policy and Management
Structure of ESG Issues
09 | Disclosure Policy and Signatory
to International Initiatives
11 |	Disclosure Policy, External
Evaluation, and Certifications
13 | E nvironment
Setting New Targets for CO2
Emissions Reduction for 2030 and
Declaration on Net-Zero by 2050
Environmental Measures
Climate Change Initiatives
Green Finance

25 |	Society
Relationship Between JRE’s
Real Estate Investments andStakeholders
Stakeholder Engagement	 Tenants and Partners
	 Local Communities	 Employees(Human Capital Development)

33 | GovernanceManagement System
Governance Structure of JRE
Risk Management
	  Compliance System

39 | GRI Content Index
47 | SASB Framework	 Well-being	 Creating Fair Work Environments

Toward 2030, About KPIs
In 2019, Japan Real Estate Investment Corporation (JRE) became the first J-REIT to disclose information
based on the recommendations put forth by the TCFD, and in 2020, we announced environmental KPIs
such as CO2 reduction targets by fiscal 2030 . In 2022, we updated our environmental KPIs in order tofurther promote our climate change initiative. We have determined the new targets that we consideredfeasible and ambitious based on the external expert verification. As a leader in the J-REIT industry, JRE
will continue to further promote ESG initiatives in the future.

CO2 Emissions*1

Non-Financial Data Highlights

About the JRE ESG Website
Details regarding this report are posted on JRE’s ESG website (external site).
Please refer to it as necessary. https://jre-esg.com/en/

Reduce by80%

Waste Recycling Rate90

% or higher

Carbon Intensity

Renewable Energy Rate

12

kg-CO2/m2 or lower

90%

Water Usage*²
Reduce by

20%*1 Absolute emissions*2 Intensity (m3/m2) basis

Disclaimer
JRE is not liable for any trouble, loss or damage caused by actions as made based on judgements using the information contained in this report. In addition, please notethat JRE is not liable for any damages caused by falsification of the text, content leaks, unauthorized use by a third party, or other accidents that are not its responsibility.

01

Japan Real Estate Investment Corporation

Japan Real Estate Investment Corporation

02

WEB

For the full text, please visit the ESG website.
https://jre-esg.com/en/esg/message.html

Message from the President

Pursuing the Best for
All Our Fellow
Stakeholders andMaximizing
Unitholder Value

A number of risks have become increasingly evident globally
due to factors including the prolongation of the COVID-19 pandemic, the crisis in Ukraine, and natural disasters resulting
from extreme weather. Such circumstances have reaffirmed
the importance of providing for issues from a long-term perspective. For this reason, we will emphatically continue with
our initiatives to enhance sustainability. Business activities
emphasizing ESG initiatives might entail short-term costs.
However, if such costs can be expected to mitigate futurerisks and increase opportunities, we should view them as
investments, rather than costs. The core mission of JRE is toprovide high-quality office space while offering long-term
investment opportunities and maximizing unitholder value.
The basic concept of this core mission is highly compatible
with enhancing sustainability in terms of long-term value.
In 2018, JRE established the ESG Office, a dedicated teamfor ESG—ahead of its industry competitors—and became asignatory to the United Nations Principles for Responsible
Investment (the PRI) in the same year. In 2019, JRE became
the first J-REIT to disclose information following the Task
Force on Climate-related Financial Disclosures (TCFD*1)
recommendations. We revised our environmental key performance indicators (KPIs) in 2022, targeting an 80% reduction in CO2 emissions by fiscal 2030 over the fiscal 2019
levels, and net-zero carbon emissions by fiscal 2050. The
new targets have been approved by the Science Based
Targets initiative (SBTi*2). JRE is also committed to sourcing
100% of the electricity used at its buildings from renewableenergy. In line with this aim, we have joined RE100, a global
initiative promoting renewable electricity. In addition, we
acquired our second ZEB Ready Certification*3 in 2022.
Utilizing such ESG initiatives in financing, we have borrowed
funds on four occasions using sustainability-linked loans.
Through such achievements and more, JRE has been laudedby stakeholders as the front-running J-REIT in promoting
ESG initiatives.

group companies in various regions across the globe. Thesesurveys reminded me that, in addition to macro-economic
and property performance analyses, evaluations of ESG
measures have, in recent years, become important criteria
for investors when deciding on investment targets. With
their exacting ESG standards, some investors from Europe
and North America will not invest in real estate with inadequate environmental measures. These investors have alsoestablished strict standards regarding the governance systems of asset management companies. Given that foreign
investors account for approximately 30% of its unitholders,the views of such investors are of the utmost importance toJRE. ESG standards extend beyond the realm of investment.
In the United Kingdom, for example, new sales or leasing
contracts cannot, in principle, be concluded for buildings
with an energy efficiency rating below a certain level on
their Energy Performance Certificate. In time, such regulatory trends are likely to spread throughout the world.
Indeed, we are already seeing moves by companies selecting the buildings they occupy based on ESG standards.
We aim to pursue the best for all our fellow stakeholders,
including tenants of buildings, those involved in property
management, neighboring communities, and colleagues
who lead the management of our assets, by enhancing
sustainability in relation to our business activities, which
will, in turn, maximize unitholder value. I hope this sustainability report will lead to a greater understanding of JRE’s
initiatives, which are based on such ideas.
*1 The TCFD was established by the Financial Stability Board, an international institution.
*2 The SBTi is an international initiative promoting the establishment oftargets based on scientific grounds.
*3 The ZEB Ready Certification program defines the energy performanceof buildings based on a third-party certification program led by the
Ministry of Land, Infrastructure, Transport and Tourism that focuses onenergy savings.

Shojiro Kojima

Before taking up my current post in April 2022, I was
involved in the management of global real estate investment
management companies. During that time, I had the opportunity to engage in surveys regarding ESG measures at

Acquisition of

ESG
HIGHLIGHTSZEB Ready Certification
for Daido Seimei Niigata Building (2nd certification)

Inclusion in MSCI JapanESG Select Leaders Index
03

Japan Real Estate Investment Corporation

Percentage of green
building-certified properties(Gross floor area of ownedbuilding basis)

75.0

GRESB
Real Estate
Assessment%

5 Stars

PRI Assessment Result
Investment &Stewardship Policy

CDP Climate
Change Program

Real
EstatePresident & CEO,Japan Real Estate Asset Management Co., Ltd.

AISS ESG Corporate Rating

Highest rating

Prime Status
Japan Real Estate Investment Corporation04

Basic Policy andManagement Structure of ESG Issues

Materiality, Objective and Target

Basic Policy and Management Structure of ESG Issues

Climate Change Initiative
Objective• Manage and reduce CO2 emissions

JRE is committed to endeavoring to enhance consideration towards the environment, social contributions, and corporate
governance to improve the sustainability of society. We recognize that this is an important social responsibility for a listed
enterprise to assume, and also believe that it is essential for maximizing our unitholder value.
To put our commitment into practice based on the above recognition, Japan Real Estate Asset Management Co.,Ltd.
(JRE-AM) has established its Sustainability Policy to communicate its priority issues and basic policies on sustainability withregard to its real estate investment management. Under the Policy, we implement various initiatives, including environmental
impact reduction through facility upgrades and acquisition of Green Building certifications, as well as contribution actions to the
local communities.

3 Contribution to conserving biodiversity

decarbonization and strengthening
resilience)
In order to make the move toward a decarbonized society, we will reduce GHG emissions through proactively introducing energy
efficient equipment and renewable energy.
Also, we will strengthen the resilience of ourportfolio against the growing frequency andseverity of natural disasters.

and ecosystem
We will conserve biodiversity and ecosystemin such a way as to select and manage nativeplant species.

2 Contribution to resource conservation

including water and resource recycling
We will protect and conserve water throughintroducing water saving equipment as wellas promoting water reuse. For the sustainable
use of resources, we will reduce waste (3R:
Reduce, Reuse, Recycle) including plastic
consumption.

4 Enhancement of tenants’ health andwell-being, and safety
We will realize “offices of tenants’ choice”
through collaborating with our stakeholders
such as property management companies.
5 Creating a workplace where a diverse

workforce can thrive
We will provide education and training programs for officers and employees to raise
ESG awareness and build capacity, as well as
support a diverse human workforce and flexible work styles to meet individual lifestyles.

We will also create an employee-friendly
workplace considering employee’s health andwell-being.

Conservation of Water Resources
Objective• Manage and reduce water use

6 Enhancement of governance systems
We will enhance our governance systems withan aim to maximizing our unitholders value
through complying with laws, regulations,and rules as well as ensuring appropriate
management of conflicts of interest.

• Promote sustainable investment(Effective use of ESG criteria for property
acquisition)

Basic Concepts of Health and Well-beingof JRE-AM’s Officers and Employees
Our human capital such as officers or
employees is one of the most important operation source for us to realize sustainablegrowth. Based on this idea, we will practicethe corporate management which enables coenrichment of JRE-AM and employees
through initiatives to raise physical and mental health of employees, and to promote worklife balance and improve job satisfaction.

mation disclosure and ESG evaluations
We will endeavor to disclose ESG related
information based on the various ESG reporting frameworks to each of our stakeholders
including our investors, thereby promoting
constructive dialogue with them.

 asic Concepts of Health and Wellbeing ofB
Tenant Workers
We strive to enhance value and competitiveness of JRE’s assets through providing officebuildings promoting health and wellbeing fortenant workers and increasing their productivity and satisfaction.

Based on the Sustainability Policy, JRE and JRE-AM have determined materiality in order to achievea sustainable society under our corporate social responsibility, recognizing the importance of consideration for ESG. We will annually disclose the progress of KPIs linked to the each objective and work
towards contributing to the Sustainable Development Goals (SDGs) as well as achieving medium- tolong-term growth of JRE through our responses to materiality.

Japan Real Estate Investment Corporation

KPI• Waste recycling rate: 90% or more by FY2030

KPI• Maintain more than 70% of our properties are green
building-certified• Own 5 to 10 Zero Energy Buildings by FY2030

Tenant Engagement
Objective

KPI• Collaborate with tenants on ESG through promoting green leases• Percentage of buildings with green leases• Realize “offices of tenants’ choice” through building management considering
tenants’ health and well-being• Percentage of buildings receiving environmental
data feedback

Human Resources Development and Diversity Promotion
Objective

Materiality

05

KPI• Water use intensity: 20% reduction by FY2030
compared with FY2019.

7 Stakeholder engagement through infor-• Improve employeesʼ professional and practical skills and help them become
professionals in the ﬁelds of REITs and real estate asset management
through providing continuous specialized training programs and professional
qualiﬁcations encouragement• Promote the diversity of our workforce which helps us attract competentpersonnel as well as encourages business innovations

Employee Health and Well-being at JRE-AM
Objective• Strive to provide comfortable office environment and more generous employee
beneﬁts, enabling competent personnel to demonstrate their capabilities fully
and to motivate them to stay with JRE-AM for a long time.

GovernanceGreen Procurement Policy
We have established a “Green Procurement
Policy” to promote sustainability initiatives
in the supply chain. This policy serves as a
guideline for selection criteria for products tobe procured and selection and evaluation
criteria for suppliers.

Recycling and Conservation of Resources
Objective• Reduce and reuse waste

Environmental Consideration of Portfolio
Objective• Raise the proportion of “green” properties in our portfolio

SocialPolicy for Implementing the Sustainability Policy HG Emissions Reduction Policy
G
Based on our Sustainability Policy, we have
set targets for reducing energy consumption
and greenhouse gas emissions to improve theperformance of our real estate portfolio. To
achieve these goals, we will implement initiatives such as improving building operations,
updating to energy efficient equipment, andinforming tenants about energy conservation.

• CO2 intensity: 12kg-CO2/m2 or below• Improve resource efficiency through reuse and recycling

As stated above, we will develop sustainability promotion systems and reflect risks and opportunities that ESG presents in our business strategies.

Energy Conservation Policy

KPI• CO2 emissions: 80% reduction by FY2030 (comparedwith FY2019)• Renewable energy rate: 90% by FY2030 / 100%by FY2050

Environment

Sustainability Policy

1 Climate change initiative (promoting• Manage and reduce energy use

Supporting SDGs

KPI
• Number of training programs by external lecturers• Training hours per employee• Number of employees with qualifications• Ratio of female senior management & Female
employee ratio/Number of employees aged 60 +years/Number of foreign employees

KPI• Manage and improve employees’ data regarding
health and well-being / welfare and benefits

Enhancing Governance Systems at Both JRE and JRE-AM
Objective

KPI• Operate the Board of Directors ensuring independence and diversity, which iscomposed of the directors appointed by the General Meeting of Unitholders• Compliance/human rights/business ethics trainings attendance rate

• Pursue improvement of management performance through appropriate
investment decision and appropriate asset management• Implementation of risk assessments• Perform the asset management services in a fair way thorough complianceand efforts to prevent conflicts of interest• JRE’s 1 outside director ratio 2 female director
ratio 3 board of directors’ meeting attendance ratio• Promote investment management that prioritizes the unitholders’ interests byintroducing asset management fees linked to management performance• Implementation of internal audits• JRE-AM’s female director ratio

Information Disclosure and Stakeholder Engagement
Objective

KPI• Promote information disclosure and dialogue with stakeholders• Issuance of annual sustainability report• Maintaining positive evaluations for ESG Ratings

WEB

For more information, please click below.
https://jre-esg.com/en/esg/policy.html#anchor02

Japan Real Estate Investment Corporation

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Basic Policy andManagement Structure of ESG Issues

Identifying Process on Materiality

Sustainability Committee
JRE-AM convenes its Sustainability Committee with a view to implementing
the Sustainability Policy in order to improve sustainability and maximize its
unitholder value.

| STEP 1 | Selection of Issues to Be Considered
We have selected and proposed a wide range of topics from the perspectives of a variety of stakeholders within and outside the JRE.
This selection was made in reference to the various guidelines and evaluation criteria specified by ESG rating agencies such as SASB
Standards, GRI Guidelines, MSCI, FTSE, GRESB and CDP, as well as the status of initiatives undertaken by our peers in the same industry.

Members of the committee:
President & CEO (Chief Sustainability Officer)
Head of ESG Office, Real Estate Management Department (Sustainability Officer)
General Managers of other departments and those practically in charge of sustainability ateach department| STEP 2 | Prioritization of Proposed Topics
We have prioritized the proposed topics and created a materiality matrix in terms of their importance to stakeholders and their impact
and importance to JRE.
Materiality Matrix

Environment

SocialGovernanceVery Strong

Social trends and stakeholder expectations

Climate Change
Initiative

Environmental
Consideration ofPortfolio

Human Resources
Development andDiversity Promotion

Tenant Engagement

Enhancing Governance
Systems at BothJRE and JRE-AM

Employee Healthand Well-beingat JRE-AM

StrongWeak

Human Rights Initiatives
As a member of society, the Mitsubishi Estate Group, to which JRE-AM belongs, is keenly aware of theimportance of respect for human rights. To fulfill our responsibility to respect the basic human rights
of all stakeholders, not only those involved in Group businesses, we set up the Mitsubishi Estate Group
Human Rights Policy on April 1, 2018. Respect for human rights is part of the Mitsubishi Estate Group
Guidelines for Conduct, which all employees are expected to follow on a daily basis. These Guidelines
stress the importance of respect for human rights and diversity, which means that employees show
concern for human rights and the environment in the course of their business activities. The Human
Rights Policy is intended to ensure that we, as a good corporation, understand that internationallymandated human rights are a bare minimum that we must go beyond, that we reaffirm the importance of supporting, protecting and respecting human rights and that we work to respect the fundamental human rights of every single person involved in the Group’s businesses.

Information Disclosureand Stakeholder
Engagement

Protecting
Biodiversity
Regional
Redevelopment

GRAND FRONT OSAKA

Contributing to Local
Communities

Conservation of Water
Resources

Impact of JRE’s business

Recycling andConservation of
Resources

Very Strong

07

Please see the following for details of a discussion in which experts offered advice from their specialist standpoints on behalf of stakeholders for setting up JRE’s materiality.
https://jre-esg.com/en/pdf/discussion.pdf

Japan Real Estate Investment Corporation
Mitsubishi Estate Group Code of Corporate Conduct (excerpt)

Respecting Human Rights and Employee Diversity
We respect human rights and believe that diversity maximizes value.
1 We respect human rights at all times.
2 We reject discrimination and harassment in any form.
3 We strive to establish a creative and competitive organization that safeguards and respects the beliefs of theindividual as reflected in the diverse communities in which we work and live.
4 We foster an open corporate culture in which all employees are encouraged to speak freely.

| STEP 3 | Discussion, Confirmation of Appropriateness and Approval on the Management level
Having determined their priorities, we have discussed these issues at the Sustainability
Committee and officially positioned them as JRE’s Materiality based on the advice from two
ESG experts. Finally, JRE’s Materiality was approved at the Investment Management Councilof JRE-AM and was reported to the Board of Directors of JRE.

WEB

Reporting details, meeting frequency, and examination process:The Sustainability Committee meets four times a year in principle and executes the PDCA
cycle by examining and planning measures, reporting and evaluating the progress andanalysis results, and then examining and planning improvement actions, thereby making
improvements on a continual basis.
For the matters examined by the Sustainability Committee, JRE-AM makes decisions
and implements measures based on its decision making rules, and the results are reported
to JRE’s Board of Directors once a year.

Mitsubishi Estate Group Human Rights Policy (excerpt)

Naoki Umeda, Former President and CEO,Japan Real Estate Asset Management Co., Ltd.,and two ESG experts

We uphold and respect international standards related to human rights. These include the International Bill of
Human Rights, which sets out the fundamental human rights possessed by all the people of the world, and theInternational Labour Organization’s Declaration on Fundamental Principles and Rights at Work, which contains
requirements concerning fundamental rights in the workplace.
We help ensure that respect for human rights is actively practiced in all business activities, and that suchactivities do not infringe on the human rights of other people. If such activities nevertheless result in a violation of
the human rights of others, efforts shall be made to minimize the negative impact.
We carry out human rights due diligence in order to minimize any negative impact caused by human rights violations occurring as a result of the Group’s business activities. We maintain a framework for human rights due diligenceand make improvements to the framework on an ongoing basis or if problems arise in order to improve its efficacy.
Furthermore, in the event that the activities of a business partner or any other individual or organization affiliated with the Mitsubishi Estate Group directly have a negative impact on the human rights of others, even if wewere not directly involved in fostering such a negative impact, we shall endeavor to make improvements together
with stakeholders to ensure respect for human rights and eliminate all violations.

Toyosu Front

Japan Real Estate Investment Corporation

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Disclosure Policy and Signatory toInternational Initiatives

Joining RE100
Disclosure Policy, Signatory to International Initiatives, Evaluations from External Parties, and Certifications
JRE and JRE-AM attaches great importance to ESG-conscious investing in order to continuously improve the value of assets
under management, and is a signatory or participant in the following international initiatives, and will actively engage in initiatives and disclosure in line with these frameworks.
In addition, several of JRE-AM’s ESG initiatives have been evaluated highly by external organizations in Japan and overseas.
Going forward, we will maximize long-term returns by strengthening our environmental, social, and governance initiatives.

Information Disclosure Policy
JRE strives to disclose ESG-related information to its investors and other stakeholders.
As ESG garners more support globally, JRE also regards it as its social responsibility to improve its sustainability and disclose initiatives in pursuit of that goal, both of which are necessary to maximize its unitholder value. Accordingly, we will promote ESG initiatives andthe ESG information disclosure while fostering mutual communication with various stakeholders.
Specifically, we refer to the Global Reporting Initiative Standards (GRI Standards), an international sustainability framework for ESGrelated reporting, and standard for the real estate industry put forth by the Sustainability Accounting Standards Board (SASB) for thedisclosure of a wide range of ESG information on the JRE ESG website. We hope both this report and our ESG website will further deepen
understanding of JRE’s ESG activities.
Reporting scope and period
In principle, the reporting scope shall be JRE’s entire portfolio and the report will be made every year.
The current reporting period is the fiscal year that started on April 1, 2021 and ended on March 31, 2022 but the report for the year does
include some information outside this period.

RE100 is the global corporate initiative led by The Climate Group in partnership with CDP
which aims to procure 100% of electricity used in business activities from renewable energy.
JRE aims to make 90% of electricity used at our buildings renewable electricity by 2030
and 100% by 2050, and it joined RE100 as the first J-REIT in 2022.

Signatory to the Principles for Responsible Investment (PRI)
PRI comprises an international network of investor signatories that works to realize the Six
Principles established for the finance industry in 2006 under the leadership of the then United
Nations Secretary-General, Kofi Annan. This network is promoted through the United Nations
Environment Programme (UNEP) and the United Nations Global Compact (UNGC).
PRI encourages the incorporation of Environment, Social and Governance issues into
investment decision-making processes, with the aim to help companies enhance long-term
investment performance and better fulfill their fiduciary duty.
JRE-AM agreed with the basic approach of PRI and became a signatory in August 2018.

Participation in UNGC
UNGC is a voluntary, global initiative supporting a global framework for sustainable growththrough the demonstration of creative, responsible leadership by the respective corporations
and organizations as principled members of society.
First proposed in 1999 by the then United Nations Secretary-General Kofi Annan, it engages
in activities based on ten universally-accepted principles in the four areas of human rights,
labor, environment, and anti-corruption.
Mitsubishi Estate Co., Ltd. became a signatory of the UNGC and Mitsubishi Estate Groupwas registered as participants in April 2018. Along with this, JRE-AM has participated in thisinitiative as a member of Mitsubishi Estate Group.

International Initiatives
International Initiatives to which JRE-AM is Signatory or Participant
JRE and JRE-AM have become signatories to the following international initiatives and participated in UNGC based on the idea that asset
management considering ESG is essential to sustainable asset value growth.

Obtaining of SBTi Approval

Joining RE100

Signatory to PRIParticipation in UNGC

Toyosu Front

Obtaining of SBTi Approval
The SBTi is a global joint initiative by CDP, the United Nations Global Compact (UNGC), theWorld Resources Institute (WRI) and the World Wide Fund for Nature (WWF), established in2015. It promotes the validation and certification of science-based GHG emissions reduction
targets set by private companies to achieve the goal upheld at the Paris Treaty.*
JRE’s CO2 Emissions reduction targets were approved by the Science Based Targets initiative (SBTi) in 2022.
* limiting global warming due to climate change to below 2°C compared with pre-industrial levels

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Japan Real Estate Investment Corporation

Japan Real Estate Investment Corporation

10

Disclosure Policy,
External Evaluation, and Certifications

GRESB Real Estate Ratings

Inclusion in MSCI Japan ESG Select Leaders Index

In the 2022 GRESB Real Estate Assessment, JRE received the 5 Stars rating, which is the highest GRESB rating (five-level rating) basedon relative evaluation of overall scores, for the fifth consecutive years. It also received Green Star rating for the seventh consecutive year,
meaning that JRE has demonstrated an excellent ESG management system and performance record. In addition, JRE received the highest evaluations of A in the “GRESB Public Disclosure.”

JRE was selected as a constituent of the MSCI Japan ESG Select Leaders Index in 2022.

What is GRESB?
GRESB is an annual benchmarking assessment to measure ESG (Environmental, Social and Governance) integration of real estatecompanies 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).

Assessment Type

Content of the Assessment
Evaluates ESG performance in terms of“management & policy” and“asset portfolio performance”

GRESB Real Estate
Assessment

Relative assessment
based on the total score(GRESB Rating)Rating

Green Star

Highest rating
Obtained for the seventh consecutive year

Highest rating

5 Stars

About the MSCI Japan ESG Select Leaders Index
The MSCI Japan ESG Select Leaders Index is an index to represent companies
with high ESG performance selected based on the data from the MSCI Japan IMIIndex. The index has been selected by the Government Pension Investment Fund(“GPIF”) as one of their ESG indices for their passive investment strategy.

Disclaimer
THE INCLUSION OF JRE IN ANY MSCI INDEX,AND THE USE OF MSCI LOGOS, TRADEMARKS,SERVICE MARKS OR INDEX NAMES HEREIN, DO
NOT CONSTITUTE A SPONSORSHIP,
ENDORSEMENT OR PROMOTION OF JRE BY
MSCI OR ANY OF ITS AFFILIATES. THE MSCIINDEXES ARE THE EXCLUSIVE PROPERTY OF
MSCI. MSCI AND THE MSCI INDEX NAMES AND
LOGOS ARE TRADEMARKS OR SERVICE MARKSOF MSCI OR ITS AFFILIATES.

Achieved Institutional Shareholder Service (ISS) ESG Corporate Rating“Prime” Status
About the ISS ESG Corporate Rating
JRE achieved ISS ESG Corporate Rating Prime status in March 2020. ISS highly noted
JRE for eco efficiency, climate change strategy, and environmental management. Prime
status companies are regarded as sustainability leaders in their industry.

Obtained for the fifth consecutive year

Efforts to Acquire Environmental Certifications
GRESB Public
Disclosure

Evaluates the level of ESG disclosure

A

Highest rating
Obtained for the fifth consecutive year

PRI Assessment Result
 bout the PRI Assessment Result
A
PRI signatories are required to report annually on the status of their ESG integration practices for evaluation.
JRE-AM has received as shown at under in its 2021 assessment result.
ModuleNumber of Properties

DBJ Green Building
Certification(Highest rating)
CASBEE- Real Estate

CDP Score
JRE received an “A- score” and was recognized at the highest Leadership Level in the 2021
Carbon Disclosure Project (“CDP”) Climate Change Program. Leadership level scores (A, A-)
are given to companies that implement current best practice climate change initiatives.

Total

What is CDP?
CDP is a global non-profit charity that runs the world’s environmental disclosure system and assesses over 13,000 companies on
their environmental transparency and actions. An assessment questionnaire spanning topics such as governance, risk management, business strategy, and targets and performance is used to score companies among eight levels: Leadership (A/A-),Management (B/B-), Awareness (C/C-), and Disclosure (D/D-). JRE has participated in CDP Climate Change Program since 2018.

11

Japan Real Estate Investment Corporation

1

4,264.56

8299,203.31

26

716,239.07

建築物省エネルギー性能表⽰制度—

110,778.10
1,030,485.04

73.4%

S

1

10,545.11

0.8%

2

11,787.62

Subtotal

51 ％削減Portfolio coverage(Gross floor area of
owned building basis)

36

BELS

DISCLOSURE INSIGHT ACTION

Gross floor areaof owned building basis(m2)

Subtotal(ZEB)

Participation in the CDP’s Climate Change Program

この建物のエネルギー消費量

国⼟交通省告⽰に基づく第三者認証
2022年1⽉21⽇交付

As of the end of March 2022

Score

Investment & Stewardship Policy

Real Estate

JRE will continue to acquire various green building certifications, including DBJ Green
Building certifications, and CASBEE certifications.
As of the end of March 2022, 75.0% of our portfolio has been green certified, obtaining
one or more certifications out of DBJ Green Building certification, CASBEE certification,
as well as BELS certification. In addition, Daido Seimei Niigata Building became the second JRE property to acquire a ZEB Ready Certification based on the design and renovation plan for the building, assuming that the renovation will be carried out in the future.

2

35,728.13

4125,090.83

この建物のエネルギー消費量51％削減

2022年1⽉21⽇交付 国⼟交通省告⽰に基づく第三者認証—

8

124,298.05

16

296,904.63

21.2%

53*1*3

1,052,817.76*2*3

75.0%*2*3*1 Includes “DBJ Green Building” certification CASBEE certification and “BELS” certification. Total number ofproperties acquired.
*2 Excludes duplication of DBJ Green Building, CASBEE certification and BELS for the same property.
*3 Includes Harumi Center Building disposed on May 31, 2022.

Daido Seimei Niigata Building(Niigata City, Niigata)Japan Real Estate Investment Corporation

12

Setting New Targets for CO2 Emissions Reduction for 2030 and Declaration on Net-Zero by 2050
JRE revised its targets for CO2 emissions reduction as we expect to achieve the previous targets announced in 2020 ahead of schedule.
We have determined the new targets that we considered feasible and ambitious based on the external expert verification.
JRE will further promote initiatives to realize a decarbonized society by proactively introducing renewable electricity in addition torenovating its buildings and making efforts to own more ZEBs (net zero energy building).

Target year

CO2 emissions reduction target

Target year

Renewable energy rate

FY203080% reduction (vs FY2019)

FY203090%

FY2050Net zero

FY2050100%

Obtaining of SBTi Approval

Joining RE100

CO2 Total emission

80% reduction

FY2019Based on the Sustainability Policy items “1. Climate change initiative (promoting decarbonization and strengthening resilience)” and “2. Contribution toresource conservation including water and resource recycling,” JRE has set
reduction targets for greenhouse gas emissions in order to improve the environmental performance of its real estate portfolio.

14	Setting New Targets for CO2 Emissions Reduction for2030 and Declaration on Net-Zero by 2050
15 Environmental Measures
17 Climate Change
23 Green Finance

FY2030Net zero

FY2050FY2019(Base year)

FY2020

FY2021% change(vs FY2019)

102,942

93,37871,585-30.46%

Intensity (Scope1 + Scope2 + Scope3) (kg-CO2/m2)

77.7

69.1

52.2

-32.84%

Renewable Energy Rate (Scope2) (%)

1.6

2.0

16.5

—

Water Intensity (m3/m2)

0.669

0.485

0.471

-29.63%

Waste Recycling rate* (%)

56.1

55.5

55.1

—

Total CO2 emissions
Total (Scope1 + Scope2 + Scope3) (t-CO2)* Recycling / Total waste

13

Japan Real Estate Investment Corporation

Japan Real Estate Investment Corporation

14

Environment

Environmental Measures
Accelerated Use of Electricity Made from Renewable Energy (RE100 Compatible)

Contributions to the Environment through Real Estate Investment Management

Environment Management Systems (EMS)

Incorporating ESG Criteria for Property Acquisition

Grasping Accurate Data and Executing a PDCA Cycle
JRE measures and gains an understanding of the energy consumption, water use, and waste of each building on a monthly
basis. We outsource data calculation and data analysis to a company specializing in EMS to execute its PDCA cycle. If there is alarge difference in the aggregated data from the previous monthor year, we investigate the cause by conducting interviews withthe property management companies and ensuring accurate
data. We also constantly monitor the reduction effects of green
refurbishments such as LED and AC upgrades.
Aggregated data disclosed in “WEB information” on JRE’s
website has been given limited assurance in accordance with
ISAE 3000 and ISAE 3410 (International Standard on Assurance
Engagements / International Standard on Assurance
Engagements) by a third-party organization (Ernst & Young
ShinNihon LLC).

JRE has newly added the following factors to the assessment
criteria (such as location and building specifications) it applies
when acquiring properties.

 onthly Data Entry, Analysis, and Feedback
M
JRE-AM recognizes environmental data aggregated via EMS as
an important indicator, as well as performance data. Therefore,
the data and analysis of the various indicators are reported to
the Chief Sustainability Officer (President & CEO) on a monthly
basis. This is not a matter of simply circulating documents.
Instead, these indicators are reported and analyzed at meetings
and are an important part of decision-making for future asset
management and CAPEX investments.
PDCA Cycle for Environmental Data

Establish
reduction targets
Asset-level initiatives

Execute plans
and makemeasurements

ESG criteria to be incorporated
Green building certifications
Environmental performance including CO2 emissions

Process of Real Estate Investment
ESG Criteria

Valuation
Spec

EnergyEfficiency

ESG
Appraisal

Valuation

OthersAge

Acquisition

When acquiring real estate properties, JRE conducts on-site
inspections and also investigates on soil contamination and toxic
substances such as asbestos and PCBs by obtaining real estateappraisal reports and engineering reports in addition to receiving related disclosure materials from the sellers.

JRE’s Sustainability Policy stipulates that contribution to conserving biodiversity and the ecosystem. JRE gives consideration
to biodiversity in the operation of buildings by endeavoring to conserve andimprove the ecosystem onproperty premises and adjacent urban green areas andnatural areas.

Japan Real Estate Investment Corporation

Tenant A
Electricity
supply contract

Contributing to the reduction of
CO2 emissions and the realization ofa decarbonized society hand in handwith tenant companies

Tenant B

Tenant C

Introduction of Renewable Energy
JRE promotes the reduction of CO2 through the utilization of renewable energy in solar generation at some of the office buildings we own.

Environmental Risk Assessment at the Time of Acquisition

Consideration to Urban Greenery and Biodiversity

Aiming to make environmental contributions by collaboratingwith tenants, JRE has been gradually introducing Green Leases
in terms of both operational improvement and efficiency retrofits.
Moreover, JRE is conducting diverse sustainability initiatives
together with our tenants.

WIN-WIN

Scale

CO2

Environmental Contribution in Collaboration
with Tenants

CO2 reduction

Renewable electricity supply

Location

GB
Certifcation
GHG Intensity

Retailelectricity
companies

Renewable
electricity

JRE

Waste

Analyze andformulate plans

JRE’s Switch to Renewable Electricity (Outline)
CO2 reduction

In establishing the abovementioned framework, JRE has
obtained a second-party opinion from CSR Design Green
Investment Advisory, Co., Ltd.

Water

Monthly
monitoring15* RE100 is the global corporate renewable energy initiative bringing together hundreds of large and ambitious businesses committed to 100% renewable electricity.

Electricity

Monitoring by AM company

JRE accelerates the use of electricity made from renewable energy-derived electricity recognized by RE100* (“renewable electricity”).
Doing so reduces a building’s CO2 emissions to zero, including the CO2 emissions of tenant areas. JRE completed the switch to renewableelectricity at its properties of 100% operational control by September 2022. JRE proactively introduces renewable electricity into the buildings other than 100% operational control and further accelerates the reduction of CO2 emissions.

Toyosu Front

Otemachi Park Building

Green Procurement Policy
JRE-AM has set the Green Procurement Policy as one of the policies to implement the specific items put forth in the Sustainability
Policy. The Green Procurement Policy provides guidelines on theselection of products to be procured by JRE-AM as well as on theselection and evaluation of suppliers. JRE-AM promotes sustainability measures across its supply chain based on this policy.

PM Company Selection Criteria and Evaluation Measures
Otemachi Park Building

JRE has established selection criteria for property management(PM) companies to which it commissions the management ofproperties, and evaluates all of the PM companies once a year, inprinciple. In addition to the companies’ building management andmaintenance abilities, JRE evaluates the PM companies based on
their environmental friendliness in terms of operations,occupational health and safety measures for their employees, andunderstanding of and cooperation with the Sustainability Policy
set by JRE-AM. Moreover, JRE requests the PM companies tomake proposals to help JRE reduce environmental impacts, suchas energy efficiency measures in buildings. In this way, JRE
makes environmental improvement efforts in cooperation with
the PM companies.

Other Measures
JRE makes contracts with professional firms to conduct energy
assessment of a selection of our properties, and utilizes theresults to understand the current level of their energy performance and to formulate improvement plans for the future.

Japan Real Estate Investment Corporation

16

Environment

Scenario Analysis
Using scenarios published by international organizations and other entities that predict the impact of global warming and climate change andof the changes that may occur in the business environment as a result of long-term policy trends in relation to climate change, JRE has
examined how its businesses could be affected.

Climate Change

Global Outlook under the 4°C Scenario*
Climate Change Initiatives
JRE believes that climate change is more than an environmental
issue. We also believe that it bears a major influence on social andindustrial structures, and therefore greatly impacts our businessactivities. To maintain sustainable and stable earnings over thelong term and overcome the wave of oncoming changes stemmingfrom climate change, it is important that we evaluate the risks andopportunities that climate change presents, and reflect them inour operational policies and asset management accordingly.

Climate and Weather

Climate and Weather

Further intensification of typhoons and floods / Increased
severity of chronic rises in temperatures and sea levels

Increase in typhoons and floods / Advancement to a certain
degree of chronic climate change

Investors

Investors

Global Trends

Global Trends in Climate Action

Supporting the TCFD Recommendations

The Paris Agreement is an international framework adopted in2015 and signed by 197 countries, with the goal of limiting global
warming to well below 2°C above pre-industrial levels and pursuing efforts to limit it even further to 1.5°C. It also aims toachieve net zero greenhouse gas (GHG) emissions by the second
half of this century. To achieve these goals, efforts are being
made and regulations are being strengthened in many countries
and regions and in every industry, aimed at reducing emissions.
Furthermore, the possibility of even stronger regulations for
reducing emissions has been also discussed.
The fact of the matter is that climate change (global warming) was already underway in the latter half of the 20th century,
according to the Intergovernmental Panel on Climate Change(IPCC)*. This is starting to become apparent through a growing
frequency of heatwaves as well as heavy rain and other natural
disasters. We are expected to respond to these and other physical risks of climate change as a major issue, as they may bear astrong influence on business.

The Task Force on Climate-related Financial Disclosures (TCFD),
launched in 2016, has discussed and made recommendations on
how financial institutions and companies should disclose information pertaining to the impact that the above effects of climatechange will have on business. At present time, the TCFD recommendations have received worldwide support from a great number of financial institutions, companies, investors, andgovernments.
JRE-AM became a supporter of the TCFD in June 2019. As asupporter, JRE-AM is now evaluating the risks and opportunities
that climate change presents to all of our business and promoting
disclosure of climate-related information to our stakeholders.

Global Outlook under the 1.5°C Scenario

Assessment of status ofcompliance with laws
and regulations
Rise in importance of environmental certifications

Increase in the importanceof transition risk assessments and environmental
certification in making
investment decisions

Financial Institutions

Financial Institutions
Invigoration of green finance
Assessment of status of legal
and regulatory compliance inmaking investment decisions
Rise in importance of environmental certifications

Assessment of physicalrisks in making investment
decisions

Government
Government

JRE

Strengthening of laws andregulations regarding
disaster prevention andreduction

Compliance withdisaster-prevention related
laws and regulations

Portfolio
Expansion in scope of
response to physical risks(adaptation measures)

Tenants
Increase in demand forheatstroke countermeasures,
BCP, and other measures
Greater consideration for
health, well-being,and safety

Property and Building
Management Companies
Procurement of emergency
supplies, implementation ofevacuation drills, formulation of BCP

Tightening of laws andregulations on carbon emissions and energy consumption
Strengthening of ZEB
regulations and expansion ofsubsidies for acquiring ZEB
expansion in policies prioritizing renewable energy andenergy efficiency

JRE
Expansion in scope of legal
and regulatory compliance

Portfolio
Monitoring of environmental
performance
Implementation of medium- tolong-term refurbishment plans
Property and Building
Management Companies
Increase in legal
compliance

Tenants
Growth in preference forenvironmental performance
Increase in RE100 member
companies* The IPCC Special Report on Warming of 1.5°C, published by the IPCC in 2018.

Governance Related to Climate Change
JRE-AM convenes its Sustainability Committee, chaired by the President & CEO of JRE-AM. The committee determines risks and opportunities related to climate change and investigates and decides on strategies to address these risks and opportunities.

The 4°C scenario assumes that policy responses to climate change
will remain largely the same as current policies, with average global
temperatures rising 4°C by the end of the 21st century. The impact ofclimate change would result in weather and climate events becoming
more extreme and intense, including sea level rise (approximately 0.4
to 0.8 m) and an increase in the frequency and intensity of very heavy
rain and typhoons, leading to an increase in physical risks. Conversely,as this scenario assumes that laws and regulations would remain
largely unchanged, transition risks would be minimal.
(Reference Scenario: Intergovernmental Panel on Climate Change RCP8.5)

The 1.5°C scenario assumes that efforts to promote a decarbonizedsociety with the aim of achieving net zero greenhouse gas (GHG) emissions by around 2050 will restrict the rise in temperature to around
1.5°C. Under this scenario, the implementation of stringent laws andregulations and tax systems in conjunction with the promotion ofpolicies to achieve a decarbonized society and the development of
low-carbon technologies would result in a decrease in GHG emissions,
thereby restricting the rise in temperature. Accordingly, althoughphysical risks would be minimized, transition risks would increase as
this scenario assumes the implementation of major changes in thesocial structure aimed at achieving decarbonization.
(Reference Scenario: International Energy Agency “NZE2050”)

Impactrisks  

Impact opportunities* R eference material: Prediction for Japan by the Japan Meteorological Agency based on Representative Concentration Pathway (RCP) 8.5 (as at the end of the 21st century)

17

Japan Real Estate Investment Corporation

Climate change

Compared with the end of the 20th century

Climate change

Compared with the end of the 20th century

Annual average temperature

Rise of approx. 4.5°C

Sea-surface temperature

Rise of approx. 3.58°C

Typhoons

Increase in intensity

Occurrence of very heavy rain (200 mm per day) (days per year)

Approx. 2.3 times

Occurrence of violent showers (50 mm per hour) (times per year)

Approx. 2.3 times

Sea level

Rise of approx. 0.71 m

Source: Climate Change in Japan 2020 - Report on Observations and Projections Assessment on Atmosphere, Land, andOceans, Ministry of Education, Culture, sports, Science and technology (MEXT) and the Japan Meteorological
Agency (JMA)

Japan Real Estate Investment Corporation

18

Environment

Financial Impact

Examination of Financial Impact Based on Scenario Analysis

Risk and Opportunity
Factors

Category

JRE examined the magnitude of the financial impact of risks and opportunities that it identified for the aforementioned 4°C and 1.5°C scenarios. We have examined the impact of each scenario for 2030 (medium-term prospects) and 2050 (long-term prospects). The results are
outlined in the following table.

Category

Risk and Opportunity
Factors

Introduction of CO2
emission regulations
Adoption of carbon
taxes

Policy and
LegalTransition
Risks and
Opportunities

Changes in Cash Flow

Increase in cost of complying with laws
and regulations (e.g., carbon taxes,
carbon credit purchases)

Rise in expense of acquiring environmental certification

Introduction of carbon
emission-related
regulations
Introduction of healthand well-being
Enhancement of property competitiveness thanks to complying with laws
regulations
and regulations
Strengthening ofenergy regulations

Spread of low-carbon
technology(Improvement of enviTechnology
ronmental performance of existing
properties)

Increase in costs incurred in procuring
ZEB properties and in conducting
research on converting properties to
ZEBs and installing new technology

Rise in retrofit costs associated withintroducing energy efficient equipment
and renewable energy and promoting
the carbon neutralization of real estate

4°C Scenario
1.5°C Scenario
Classification Medium- Long-Term Medium- Long-Term
Term 2030 2050 Term 2030 2050

risks

risks

opportunities

Rise in asset value
resulting from
improved green
performance

Rise in investment appetite of institutional investors thanks to attainmentof environmental certifications andacquisition of high ratings from global
ratings institutions

Increase in fund procurement costs
Market and Growth in importance stemming from a high climate riskoftransition
risks
Reputationassessment

19

Minor

Minor

Minor

Minor

Moderate

Minor

Moderate

Major

Minor

⋅Acquire environmental certifications and energy-efficiency
ratings based on a medium-to long-term GHG emissions
reduction plan

Major

⋅Set CO2 reduction target (80% reduction compared with
FY2019)⋅Reduce energy intensity in a planned manner⋅Proactively conduct resource efficiency-related capital
improvements using internal carbon pricing (in cooperation with external experts)⋅A cquire ZEB properties⋅Convert existing properties to ZEBs in a proactive andplanned manner⋅Manage energy consumption using our proprietary EMS⋅Introduce renewable energy⋅A cquire environmental certifications and energy-efficiency
ratings based on a medium-to long-term GHG emissions
reduction plan⋅A cquire ZEB properties

Moderate Moderate ⋅Convert existing properties to ZEBs in a proactive and

Minor

Minor

Minor

⋅Cooperate with external experts⋅Provide support for technical assessments and equipment, such as those for energy efficiency⋅Review lifecycle costs
Moderate⋅Formulate medium- to long-term refurbishment plans
based on achieving net zero emissions⋅Promote a switch to the use of power from renewableenergy sources

Minor

Minor

Moderate

Major

opportunities

Minor

Minor

Moderate Moderate ⋅Procure funds through sustainability-linked loans

opportunities

Minor

Minor

Moderate Moderate

risks

risks

Minor

⋅Issue green bonds

Minor

Minor

Moderate

Minor

Changes in tenants’environmental performance needs

Decrease in earnings resulting from
JRE properties becoming stranded
assets following a relative decline intheir environmental performance

Minor

Minor

⋅Implement planned equipment retrofitting at JRE-ownedbuildings⋅Proactively leverage green finance

Minor

Rise in property value and increase inaverage rents thanks to the acquisitionof environmental certification, such as opportunities
ZEB and DBJ Green Building
Certification
risks

planned manner

Minor

Rise in value ofenvironmental
performance

Japan Real Estate Investment Corporation

Minor⋅Set CO2 reduction target (80% reduction compared with
FY2019)⋅Reduce energy intensity in a planned manner⋅Proactively conduct resource efficiency-related capital
improvements using internal carbon pricing (in cooperation with external experts)⋅Replace existing properties with those with good environmental performance⋅Manage energy consumption using our proprietary EMS*
⋅Introduce renewable energy

Minor

risks

Reduction in utility costs thanks to ZEB
opportunities
conversion and green refurbishments

Changes in social
Decrease in fund procurement costs
values regarding envi- through use of green financeronmental performance

Minor⋅Disclose ESG-related initiatives via our ESG website⋅Disclose environmental performance data
⋅Proactively participate in various ESG evaluations (suchas GRESB, CDP, and MSCI)⋅Reduce portfolio energy intensity in a planned manner⋅Proactively conduct resource efficiency-related capital
improvements using internal carbon pricing (in cooperaModeratetion with external experts)⋅Replace existing properties with those with good environmental performance⋅A cquire environmental certifications and energy-efficiency
ratings based on a medium- to long-term GHG emissions
reduction plan
⋅Contribute to improving portfolio competitiveness byacquiring properties with good environmental performance through the adoption of ESG evaluation criteria
Moderate Moderate at the time of acquisition
Major

Acute

JRE Initiatives

JRE Initiatives

risks

Minor

Moderate

Minor

Minor

Loss of sales opportunities due toinundation of JRE-owned properties

risks

Minor

Moderate

Minor

Minor

Decrease in asset value of properties
with a high risk of inundation

risks

Minor

Minor

Minor

Minor

Increase in market competitiveness by
maintaining a highly resilient portfolio

opportunities

Minor

Moderate

Minor

Minor

Advancement of risein annual averagetemperatures

Rise in costs resulting from a growthin demand for air-conditioning

risks

Minor

Moderate

Minor

Minor

⋅Install highly efficient air-conditioning (implement as
an energy-saving measure)

Advancement of risein sea water levels

Increase in costs incurred for measures
to tackle rising sea levels

risks

Minor

Minor

Minor

Minor

⋅Implement hard (e.g., installation of water-stopping
plates) and soft (e.g., evacuation drills and formulationof BCP) disaster measures

Increase in typhoons,concentrated heavy
rains, floods, andbuilding inundation

Physical Risks
and
Opportunities

Chronic

4°C Scenario
1.5°C Scenario
Classification Medium- Long-Term Medium- Long-Term
Term 2030 2050 Term 2030 2050

Increase in the cost of refurbishments
and expense of up-front countermeasures and property insurance premiums
stemming from inundation of JREowned properties

Note: Approach to financial impact (minor/moderate/major): Quantitative and qualitative analysis carried out to assess the relative impact.
Financial Impact

Changes in Cash Flow⋅Perform inundation risk assessment in due diligenceprocess⋅Understand inundation risks by checking hazard maps,
including for properties already under JRE-ownership⋅Implement hard (e.g., installation of water-stopping
plates) and soft (e.g., evacuation drills and formulationof BCP) disaster measures* BCP: Business continuity planning; EMS: Environmental management system

Climate Change-Related Risks, Opportunities and JRE’s Response

Transition Risks Reduction of CO2 emissions:
To respond to the future possibility of even stronger regulations for
reducing emissions, such as obligation to reduce total emissions
or introduction of carbon taxes, JRE has set a reduction target for
its entire portfolio of 80% compared to fiscal 2019 by fiscal 2030.
 eduction of carbon intensity
R(CO2 emissions per unit floor area):
Rising awareness on climate change risks has been appearing in
not only the real estate industry but in every industry around theworld. Also, an increasing number of office building tenants havestarted to make efforts to address climate change as an important issue. JRE believes that properties with high CO2 emissions
will decrease in value while properties with high energy efficiency
will increase in value as this market trend continues.
By fiscal 2030, JRE aims to reduce the average carbon intensity of its entire portfolio to 12kg-CO2/m2 as well as own 5–10 net
zero energy buildings (ZEBs).
We believe improving energy efficiency of each asset will
prevent it from becoming a “stranded asset,” and increase its
value in the market. We will pursue higher profits by utilizing
ZEB properties and other highly competitive, high-performancegreen buildings to appeal to our tenants.

Physical Risks “Hard” Measures at Buildings to Address Natural Disasters(Typhoons, Heavy Rain)
To address flooding caused by typhoons and heavy rain, which
affect Japan due to geographical factors, we have taken “hard”

measures at buildings that include installing water-stopping
plates in building apertures, preparing sandbags and waterstopping sheets, and have installed waterproofed doors forunderground rooms with important equipment.
“Soft” Measures for When Disasters Occur
Disaster countermeasures and training appropriate to each typeof disaster are implemented by a top-class PM company inJapan. In addition, appropriate “soft” measures have been taken,
which include holding
disaster prevention council
meetings with tenants, distributing BCP manuals, andintroducing a system
between JRE-AM and PMs
to assess the damage in theevent of disaster.
 esilience of JRE Portfolio According to Past Cases ofR
Disasters and Data
Japan is a country that experiences numerous natural disasters.
Over the past 10 years, Japan has been struck by several catastrophic disasters, such as the 2011 Great East Japan Earthquake(earthquake and tsunami), the Heavy Rain Event of July 2018(heavy rain, inundation), the 2018 Hokkaido East Iburi Earthquake(earthquake, landslides, wide-ranging power outages), andTyphoon Faxai (strong winds, house damage, long-term power
outages) and Typhoon Hagibis (heavy rain, river collapse, inundation) in 2019.

Japan Real Estate Investment Corporation

20

Environment

JRE’s portfolio has not been exempt from these disasters
and several properties have been affected by these disasters insome way, but thanks to the resilience of the buildings and thestrong response from PM companies, damage to these buildings
has been limited. 1
Even when a disaster occurs, buildings are restored within
one week in almost all cases, with repairs costs under JPY 10.0
million. 2 3
In addition, there is only example of a building becoming
inoperable (closed, etc.) due to a disaster.
1

 ypes of Disasters that Have Caused Damage in the Past
T
(number of cases)*
As of March 2020

Extreme weather(hot and cold waves, etc.)

Time Required for Post-Disaster Building Repairs (%)
One week
to one month

1.4%

One day
to one weekNot
applicable

9.7%

41.7%

No problems
with facility

47.2%

3

Repair Costs (%)
 PY 10 million toJ
JPY 100 million
or lower

1

2.8%

23

Earthquakes
Inundation and river flooding
from heavy rain

2

8
25

Typhoons and tornadoes

Notapplicable

Under
JPY 10 million

54.2%

43.1%

* There are 32 properties that have never been affected by disasters.

JRE’s Approaches toward Climate Change Opportunities and JRE’s KPIWhile climate change presents business risks, it also provides opportunities for socioeconomic reform and new value
creation. JRE is driving the below strategies to increase value and to seize REIT growth opportunities in terms ofinternal growth, external growth, and financial strategy.
Internal Growth Opportunities
Effective CAPEX (capital expenditure) control/internal carbon pricing
1. Effective CAPEX Control
JRE-AM has a dedicated engineering team (Lifecycle Design
Office), which is engaged in efficiently controlling CAPEX andrefurbishment works of over 70 properties. Furthermore, we collaborate with the engineering team of Mitsubishi Jisho DisignInc., which is one of the leading architectural firms in Japan, toconduct technical assessments of our properties, review lifecycle costs of the existing properties, and control costs.
2. Internal Carbon Pricing
JRE develops a medium-term construction budget every year.
As for green refurbishments (air conditioning and LED upgrades,
toilet & washroom refurbishment for common areas, etc.), we
calculate how much we can have the energy and water reduction
effects from these works. The impacts we calculate are converted
into t-CO2 equivalent, which helps us know how much CO2 savedof the entire portfolio and how much it costs to reduce 1t-CO2.
Generally, introduction of renewable energy has been considered cost effective to reduce GHG emissions rather than renovation work. However, JRE has found that retrofitting existingbuildings will also reduce GHG emissions without significant
additional costs.
3. Roadmap for CO2 Emissions Reduction by FY2030
CO2 Emissions Reduction Pathway
JRE aims for 80% reduction compared to FY2019 of CO2 emissions by FY2030.
The breakdown of the reduction is shown in the bar chart
below. We expect 20,000t-CO2 reduction mainly from renovation
works of existing buildings and ZEBs.

The reduction through renovations and ZEB properties above
is supported by the engineering study conducted by Mitsubishi
Jisho Design Inc. We conducted theoretical scenario analysis
supported by the extensive track record of renovations ofMitsubishi Jisho Design Inc., as well as studies based on the onsite inspections. The study results are as follows (comparison of
the same property):

100,000

Approx.
20,000 t-CO2

80,000

Reduction from Grid decarbonization, Renewable energy,
New acquisition & disposition,
Operation at site, etc.

60,00040,000

Reduction from renovations, etc.
Renewable energy, etc
CO2 emissions

20,0000Reduction from Renovation,
ZEB (AC upgrade, LED, etc.)

FY2019FY2030(KPI)

Source: The Ministry of the Environment’s
ZEB Portal

Previous building
energy consumption

The theoretical scenario analysis supported by the Mitsubishi
Jisho Design Inc.
CO2 Reduction(t-CO2)Extra cost

WEB

Case I

Case II

Case III

21,944

26,66728,637

No additionalcost

JPY 1.1 billion

JPY 3.2 billion

Reduction of
50% or morethrough energy
efficiency

ZEBs consume

100%

50%
or less energy

The Mitsubishi Jisho Design CO2 Reduction Study
Report can be viewed here
https://jre-esg.com/en/environment/climate.html

Based on the results, JRE will work on the way between
Case II and Case III. When carrying out renovation work on individual property, not only will we simply refurbish aging facilities
and work on energy efficiency but we will also strive to further
improve profitability by increasing the total value of our property,
while considering the needs of tenants and customers.
Asset-level Renovation Projects and Value-add Approach
While improving the energy efficiency of individual buildings
serves as an advance response to the transition risk of reducing
GHG emissions, it also serves as an opportunity to improve profitability by increasing net operating income (NOI) via savings ofutility costs and raising appeal for environmentally conscious
tenants.
JRE is reducing utility costs by upgrading to LED lighting.
Furthermore, we are moving forward with asset-level green
refurbishment projects. These projects receive a green premium
after conferring with tenants comprising increased rent and payment into a cooperative green fund, resulting in lower emissions
and higher profitability.
Please refer to page 24 for more details.

(t-CO2)120,000

ZEB ReadyFuture ZEB Achievements in JRE’s Portfolio
JRE aims to own 5–10 ZEBs by 2030 (including ZEB Ready andZEB Oriented buildings). In collaboration with Mitsubishi Jisho
Design Inc., we have started to verify the future possibility tomake the existing properties to ZEBs through renovations. In 2021,
we acquired ZEB Ready Certification for JRE Higashi-Gotanda
1Chome Building and for Daido Seimei Niigata Building in 2022,
our second such certification. These are the acquisitions of
ZEB Ready Certification by application at the design stage basedon the assumption of renovation work in an existing building.
JRE will continue to promote its ZEB initiatives in order to achieve
its KPIs.

JRE Higashi-Gotanda 1Chome Building(Shinagawa-ku, Tokyo)

External Growth Opportunities
With the cooperation of JRE-AM’s sponsor, Mitsubishi EstateCo., Ltd, we continue to build a portfolio that balances profitability with adaptability to a decarbonized society by leveraging
property replacements and mutual trading to replace older
properties with newly constructed buildings with high energy
efficiency.
Example of Property Replacement with Sponsor:

Disposed

Shibuya Cross Tower(building section)

Acquired

CO2 emissions

Water usage–89.2%–83.4%

Front Place Nihonbashi
Actual yield after depreciation
2.2%

3.1%

Financial Strategy Opportunities
As the financial impact of climate change comes increasingly tolight, it is likely that financial institutions and investors will place
more focus on green financing. In order to obtain advantageous
funding opportunities as a green investment and lending target,
JRE is actively utilizing green finance as follows.
· Procurement of funds through sustainability-linked loans· Issuance of green bonds
To ensure that our green commitment can be objectively verified, we are making use of DBJ Green Building certification,
BELS certification, and other certifications, establishing a systemfor evaluating and measuring positive impacts on the environment and society, and also actively reporting to external parties.
Please refer to page 23 for more details.

21Japan Real Estate Investment Corporation

Japan Real Estate Investment Corporation

22

Environment

Green Finance
Sustainability-Linked Loans
JRE announced to borrow funds, and SLL has been implemented since then as described below, which will be procured
through sustainability-linked loans (the “SLLs”), the first sucharrangement in the J-REIT industry in January 2021.
Sustainability-linked loans are loan instruments that aim tofacilitate and support environmentally and socially sustainableeconomic activity and growth. In this loan scheme, the borrower
sets sustainability performance targets (“SPTs”) based on its
business management strategy, and the lender incentivizes theborrower’s achievement of those objectives by aligning loan
terms to the borrower’s performance against the relevant predetermined SPTs.

Green Bonds

In the SLLs, focus is placed on climate change risks, especially reduction of CO2 emissions. Among the JRE’s environmental KPIs for fiscal 2030, the following targets have been set as
the SPTs.
∙ CO2 emissions reduction targets∙ Own ZEBs (Includes Nearly ZEB, ZEB Ready, ZEB Oriented)
Moreover, the SLLs are designed in such a way that, based on
the above SPTs, achievement confirmation shall be made several
times and, if the predetermined levels are achieved upon eachconfirmation, the reduction in the interest rate will be offered.

Overview of the Borrowings
Loan 1
SPTs1:

Loan 2

Loan 3

Loan 4

Reduce CO2 emissions by 35%

Reduce CO2 emissions by 80%(Base year: FY2013 / Carbon intensity basis) (previous target)(Base year: FY2019 / Absolute CO2 emissions basis)

SPTs2:

Own five ZEBs (Includes Nearly ZEB, ZEB Ready, ZEB Oriented)

Lender:

The Norinchukin Bank

Loan amount:

JPY 5,000 million

Borrowing date:Principal repayment date:

JPY 5,000 million

January 29, 2021
July 31, 2031

January 30, 2032

JRE issued Green Bonds in order to further promote our sustainability initiatives. Going forward, we will promote energy conservation,
improve customer satisfaction, and encourage acquiring green building certifications through various measures such as refurbishment
work and other ESG investments that give consideration to the environment, and achieve Positive Impact* by doing so.
* “Positive Impact” is defined as “that which produces a positive impact on society or the environment and simultaneously ensures the market-level return”. It is advocated by the United Nations Environment Programme Finance Initiative (UNEP FI).

TOPICS
JRE Shiba 2Chome Daimon Building
Refurbishment work of JRE Shiba 2Chome Daimon Building has been planned basedon the concept of Positive Impact advocated by the United Nations Environment
Programme Finance Initiative (UNEP FI). Among the eligibility criteria for eligible green
projects, this project meets, “refurbishments with more than a 10% reduction in CO2

JPY 5,000 million

JPY 3,000 million

November 15, 2021

June 17, 2022

November 17, 2031

June 17, 2032

Model Cases in the Model Creation Projects by the Ministry of the Environment
The SLLs concluded on January 29, 2021 have been selected to the“Model Cases in the Model Creation Projects on Sustainability-Linked
Loans 2020” by the Ministry of the Environment of Japan, cited to serve as a model in terms of environmental awareness and represent a
pioneering fund procurement method.
Furthermore, the framework of the SLLs selected as the model case has been confirmed to conform to the Guidelines by Ministry of
the Environment and its contractors (Japan Credit Rating Agency, Ltd. and E & E Solutions Inc.).

emissions or energy consumption” and “3 Stars under the DBJ Green Building certification.” Additionally, as for DBJ Green Building certification, our efforts to contributetoward disaster prevention and BCP were highly evaluated, as were our efforts to
install highly efficient air conditioning and LED lighting inside the building.
Elevator hall after
renovation

Overview of the Refurbishment

Achieving Positive Impact

The refurbishment has been planned based on the concept of Positive

The impacts derived from the refurbishment were greater than initially

Impact advocated by the United Nations Environment Programme

expected. The results are as follows.

Finance Initiative (UNEP FI).

Enhanced convenience and security by replacing tenant doors and adopting card access security systems

Enhanced the property’s presence by innovatinginternal fittings of common areas to renew
impression

Japan Real Estate Investment Corporation

CO2*1
CO2

Reduced44.3%

Water*1

32.8%

Average rent per area
increased by%

Reduced

49.5%
17.5

Tenant Satisfaction
Level*3
Increased to80%*1 Comparison of annual results for 2020 and 2017
*2 Comparison between 31 Mar. 2021 (unofficially confirmed basis) and 31 Mar.
2018 (actual results)*3 In relation to offices, elevator hall, and restroom facilities after refurbishment

Overview of Refurbishments and Property
Project Name

JRE Shiba 2Chome Daimon Building Refurbishment Project

Project System

23

ReducedSwitched to individually controlled air-conditioning
and renovated rest rooms, etc., caring for tenant
employees’ health and comfort

In concluding the agreement for the SLLs, JRE has obtained a second-party opinion from Japan Credit Rating Agency, Ltd. (JCR) withregard to conformity with the SLLP and the rationality of the established SPTs.

For more information, please click below.
https://jre-esg.com/en/environment/greenbond.html

Energy*1

Adopted highly efficient air-conditioning units andLED lights to reduce environmental load

Second-party Opinion

WEB

Rest room after renovation

Design supervision:

Mitsubishi Jisho Design Inc.

PM company: okio Marine &T
Nichido Facilities, Inc.

Design andconstruction:

 BAYASHI CORPORATION andO
othersConstruction period:

April 2018–2021 (completion)

Property Overview
Name of property:

JRE Shiba 2Chome Daimon Building

Location:

2-3-3 Shiba, Minato-ku, Tokyo

Area:

Land: 2,820m2
Building: 16,235m2

Structure:

Steel-framed reinforced concrete
structure, 2 floors below ground, 8
floors above ground

Time of construction: March 1984
Type of ownership:

Land and building

Time of acquisition:

September 2001

IMPACT

JRE-AM supports activities aimed at
Positive Impact, which is advocated by
the United Nations Environment
Programme–Finance Initiative (UNEP FI).

Japan Real Estate Investment Corporation

24

Relationship Between JRE’s Real Estate Investments and Stakeholders
JRE makes investments based on its ESG Policy and conducts office building management and operations in order togenerate stable and sustainable profits. We are creating a system to improve property value and generate returns overthe medium-to-long term by both increasing stakeholder engagement and promoting environmental initiatives.
Sustainability Policy Please refer to page 05 for more details.
1. Climate change initiative (promoting decarbonization andstrengthening resilience)
2. Contribution to resource conservation including water andresource recycling
3. Contribution to conserving biodiversity and ecosystem
4. Enhancement of tenants’ health and well-being, and safety
5. Creating a workplace where a diverse workforce can thrive
6. Enhancement of governance systems
7. Stakeholder engagement through information disclosureand ESG evaluations

Investment andmanagement

Unitholders

JRE
Japan Real Estate
Investment Corporation
JRE-AM’s Responsibility

Contributing
toward increasing
the value of theentire portfolio

ESG disclosure,improving
evaluations fromexternal parties

JRE-AM promotes efforts to acquire anddevelop professional human resources
capable of conducting asset management and to improve the health and wellbeing of its employees, with the goal ofbeing an asset management company
with the trust of its stakeholders

Office Building
Investments

Employees

Promotion of
ESG-related
initiatives

Please refer to page
29-31 for more details.

PM Companies

Employees

Stakeholders

Based on its ESG Basic Policy, JRE-AM strives to improve the value of properties by promoting investment management of office buildings with consideration for the health and well-being of tenant workers. Similarly, JRE-AM
practices corporate management that enriches both JRE-AM and employees
through efforts to improve the physical and mental health of officers andemployees.
26 Relationship Between JRE’s Real Estate Investments and Stakeholders
27 Stakeholder Engagement
27 Tenants and Partners
28 Local Communities
29 Employees (Human Capital Development)
30 Well-being
31 Creating Fair Work Environments
32 Non-Financial Data Highlights

Tenants
Local
Communities

External Evaluation and Certifications
Please refer to page 11–12 for more details.

• GRESB• ZEB certification• DBJ Green Building certifications

Local Communities

Please refer topage 28 formore details.

25

Japan Real Estate Investment Corporation

Contribution to theenvironment and society
PM Companies

Working with PM companies, we
promote mutual communication
with local governments, residents, and facility users to promote develop­ment alongside
the local community.

Please refer topage 27 formore details.

Tenants

We are working with PM companies to improve the asset
value of each property, withconsideration given to reducing
the environmental impact ofbuilding operations.

Please refer topage 27 formore details.

We are making efforts toincrease tenant satisfaction andare committed to building
long-term trust relationships
between owner and tenant.

Japan Real Estate Investment Corporation

26

Society

Stakeholder Engagement
Tenants and Partners

Local Communities

Sustainability Program for Tenants
JRE is implementing various initiatives to increase the satisfaction and enhance the sustainability of tenants in each building.
Sustainability Guide to Promote Owner and Tenant Collaboration
JRE creates and distributes the Sustainability Guide as part of its
efforts to promote collaboration with tenants. The Sustainability
Guide introduces activities that we can do in the office, mainly
from the viewpoints of the “environment” and “tenant well-being.”

SUSTAINABILITYGUIDE“New Normal” Era
Waste Recycling

74.0%
56.2%

Percentage of Buildings Receiving Environmental
Data Feedback
61 buildings / 73buildings total 

83.6%
89.0%

VOL. 2(As of May, 2022)* The above percentages were calculated based on the number of buildings

MITSUBISHI ESTATE CO., LTD.

Japan Real Estate Investment Corporation

Theme 1 	Offices in the
Theme 2

Percentage of Buildings Conducting Survey
on Tenant Satisfaction
41 buildings / 73buildings totalPercentage of Buildings Receiving
Online Tenant Services
65 buildings / 73buildings total 

Sustainability Guide VOL.1
Theme Work Style Reform
Sustainability Guide VOL.2

Percentage of Buildings with Green Leases
54 buildings / 73buildings total 

Feedback on Sustainability to PMs

Society

Tenants/
Customers

Co-creation
EconomyBuilding
OwnersEnvironment

Our Thoughts
In 2020, the COVID-19 pandemic completelychanged the way we live.

The pandemic has prompted us to evolve into

a “non-contact” society where contact is avoided
to prevent infection from airborne droplets.

This transformation has resulted in a steep increasein the use of delivery and take-out services,which in turn has led to more plastic bottle andlunch box waste in homes and offices. Consequently,
the pandemic has had a significant impact
on the problem of waste.

What can we do to help create a sustainable society?

This Sustainability Guide mainly focuses on steps that,
as office workers, all of us can take to enhanceenvironmental and employee friendliness.
In partnership with our tenants,

Survey on Tenant Satisfaction
We carry out satisfaction surveys to achieve a high level ofcustomer satisfaction and realize sustainable buildings.
we will co-create a sustainable society.

2

Example of tenant satisfaction survey
In a bid to increase the asset value, JRE conducted the renovation work for common areas in JRE Shiba 2Chome Daimon
Building, including switching from central to individual air conditioning systems and upgrading themto more energy-saving ones, converting to LED lights in the building,and installing card access security
systems, which led to increased satisfaction of its tenants in a survey on
how they are satisfied with the building and its management.

Feedback of Environmental Data /Online Tenant Services on the Internet
We provide feedback to tenants including energy, water usage,
and waste-related data. In addition, we provide online feedback
and services using our proprietary system.

JRE conducts surveys for PMs for all properties in the portfolio
based on the GRESB-related questions, a global real estate sustainability certification. Based on the survey results, we analyze
sustainability efforts at each asset level.
As for the survey results and each property’s sustainability
efforts, we provide PM companies with opportunities to provide
feedback.
We believe that property managers who are connected withtenants and visitors to each building will improve the level ofsustainability of our entire portfolio by raising their sustainability-related knowledge and awareness.

JRE has been participating in a range of activities to contribute to local communities and local society. We also foster
mutual communication with various stakeholders, including local authorities, local residents, and visitors to our properties, through such activities.

Contribution to Community Development
JRE addresses issues related to community development, including urban redevelopment and revitalization as part of investing in andoperating office buildings located in major cities throughout Japan. JRE works to improve the long-term value of its portfolio by contributing to the sustainable development of cities through cooperation with local stakeholders, including local governments, regional councils,
tenants, and our sponsor that is a developer.

Local Contribution in the Event of a DisasterSupport for Local Events, Local GroupFor Akasaka Park Building and others, we have established a system to host stranded commuters in the event of a disaster, and for
Otemachi Financial City we have concluded an agreement with
Chiyoda ward to host stranded commuters in such an event. In
addition, we have installed a well on the premises of Kanazawa
Park Building and a regional warehouse on the premises ofHarumi Front for disaster control. We also participate in disaster
control drills held in Mitsubishi UFJ Trust and Banking Building
and other buildings. Through these activities, we strive to contribute to the community by offering places where they can turn to in
the event of disaster, thereby contributing to local communities.

Activities, and Artistic and Cultural Activities. For Shiodome
Building, we support the local summer festival by providing avenue and supplying human resources while holding local music
events in the open spaces and common areas of JRE Higashi
Nibancho Square and Tokyo Opera City Building on a regularbasis. Furthermore, we support a range of artistic and culturalactivities conducted in Tokyo Opera City Building, which comprises multiple cultural facilities. In these ways and others, JRE
has committed to promoting regional revitalization as well as
artistic and cultural activities by supporting a range of events.

ESG Seminars for Stakeholders
JRE offers ESG seminars for our business partners, master lessees, and property managers, among others, for the purpose ofraising stakeholder awareness. We invite ESG experts from outside JRE to cover global ESG trends and discuss specialized
fields such as GRESB and ZEB.
We believe that raising sustainability awareness not only
within JRE, but among all our stakeholders, will benefit sustainability efforts at each asset level.

TOPICS

Social Initiatives
https://jre-esg.com/en/society/society.html

Contribution to community development

GRAND FRONT OSAKA - Urban revitalization / urban redevelopment project
GRAND FRONT OSAKA which JRE acquired in October 2021 has

An ESG seminar held in May 2019.
The seminar was held online in
2022 with the participation ofnearly 200 stakeholders.

Furthermore, as a general incorpo-

built a “Knowledge Capital” where knowledge is created.

rated association “Grand Front Osaka“Knowledge Office Space,” consisting of knowledge work space (for

TMO” was established to operate theresearchers, creators, business owner) and educational functions

Grand Front Osaka integrated town, a par-and “Future Life Showroom” exhibiting new lifestyle delivered by

ticipatory type of “town” development is

the fusion of advanced technologies and sensibilities are repre-

promoted to grow the “town” along with its

sented. The “Knowledge Plaza” located at the center of the North

residents, workers and visitors, to bringWing is a symbol of the “town.” Events and presentations linked tobustle and vitality back to a place people

the Knowledge Capital are held here, bringing even more life andwill want to come to every day.

vitality to exchanges between people in the city.

27

Japan Real Estate Investment Corporation

Japan Real Estate Investment Corporation

28

Society

Employees (Human Capital Development)

Well-being

Basic Policy
JRE is prohibited from having any employees under the Japanese
Act on Investment Trusts and Investment Corporations, and therefore commissions business operations to JRE-AM. As the asset
management company for JRE, JRE-AM believes that acquiring
and training top-level human resources is a very important aspectof maintaining top-level management. In addition, JRE-AM has

Employee Health and Well-being

highlighted efforts related to officers and employees as an important issue in its Sustainability Policy. To achieve these goals,
JRE-AM is promoting efforts to improve the health and well-beingof its employees by creating a system to acquire and develop professional human resources who can handle the responsibility ofasset management.

Talent Pipeline & Development Strategy
JRE-AM have access to professionals with extensive experienceand expertise in real estate investment and asset management
as seconded staff from our shareholder, Mitsubishi Estate Co.,
Ltd. and also recruit experienced, talented individuals, to acquirecompetent personnel on a timely basis.
We employ a human resources development strategy that
includes a support for acquiring various qualifications and specialized training after joining JRE-AM. In addition, we are developing an easy-to-work-in environment for employees that is
mindful of their health and well-being.

We continually host junior employees (with fewer than ten
yearsʼ experience) seconded from our sponsor who regularly
recruits new graduates. By creating a well-balanced, diverse
workforce consisting of both young and experienced professionals, we ensure that our specialized knowledge and skills in realestate asset management are shared and passed on within
JRE-AM, thereby enhancing the sustainability of the organization
as a whole.

Human Capital Development

Learning and Development for All Employees
We encourage all employees, including permanent, seconded,
contract, and temporary staff, to pursue self-development
and professional development. We conduct our own training
programs that increase knowledge of the REIT industry andawareness of compliance issues. Furthermore, we encourage
employees to actively participate in a variety of training programs
offered by our shareholder. By participating in such programs,
we expect each employee to develop as both a business person
and an industry professional.
Specialized Skills Training
We offer training programs led by external lecturers and expertsthat improve employees’ professional and practical skills, helping them become professionals in the fields of REITs and realestate asset management. Further, we encourage all employees
and officers to pursue educational opportunities outside thecompany by subsidizing relevant educational expenses such as
the costs of attending seminars and training programs offered byexternal organizations.
Advanced Leadership Development
At JRE-AM, managerial positions are given to those who display
management potential and show a willingness to acquire specialized knowledge from both inside and outside JRE-AM. After thesemanagers are appointed, we expect them to improve their management abilities on a voluntary basis. To support their participation in management seminars and symposiums, we bear thecosts of these activities. To ensure up-to-date knowledge of laws,
such as the Financial Instruments and Exchange Act and the Act
on Investment Trusts and Investment Corporations, we periodically invite external experts to lecture on these topics, and also
provide training for managers conducted by our shareholder.

We believe that the physical and mental health of employees and the creation of an accommodating work environment
are important management issues in terms of improving business performance. Based on this understanding, we implement various measures to promote the physical and mental health of employees, help them achieve a good work-life balance, and increase worker motivation.

Creating Productive and Employee-friendly Workplace
JRE-AM Office EnvironmentA work environment that enhances productivity through consideration for health and well-being
We have our new office at Otemachi Park Building since December
2017. Otemachi Park Building is a state-of-the-art building aiming
to offer an employee-friendly workplace that reforms working
styles and improves creativity and productivity of workers, featuring advanced energy efficient facilities, BCP functions, and facilities focused on coexistence with the environment. The building isequipped with a designated lounge space for tenants completewith a fitness room, nap room, shower room, etc., in addition toa nursery and a community plaza with natural greenery that isdesigned with consideration for biodiversity.
Office Design Promoting Internal Communication
In the current office, we have adopted a free seating system for
employees and have upgraded communication spaces within JRE-AM.
These spaces are aimed at invigorating in-Company communication andhave been set up to add a playful
touch to our office and promote
employees’ physical activities. In
addition, we are working to make ouroffices more comfortable places towork. For example, we installed new“blue sky” LED lighting that“blue sky” LED lighting

replicates blue sky and natural light to create a spacious feel in a
portion of our conference rooms. We believe that these offices
will facilitate employee work style reforms and lead to improved
productivity.

Promote Diverse Work Styles
We endeavor to provide a comfortable working environment byoffering various employee benefit programs and promoting a better
work-life balance so that no employee has to give up their employment for childbirth, childcare, nursing care, or other life events.
Introduction of a Fully Flextime System that Abolishes Core
Working Hours
We have introduced a flextime system for all employees. Under
this system, prescribed work hours are managed by the monthand not by the day, meaning that employees can measure theirwork obligations and private affairs and come up with a workstylethat takes into account a proper work-life balance.

communication spaces in office

Employee Voice
Improving Productivity through Flexible Workstyles and a Comfortable Office

Examples of training programs by external lecturers in FY2021 (22 programs were conducted in total): CASE 1 	Compliance training for those engaged in investment

management business (June 2021 and February 2022)

 CASE 2Internal Audit Training (June 2021)

 CASE 3

Anti-Money Laundering Training (July 2021)

 CASE 4

Sustainability Training (January 2022)

 CASE 5

Diversity Training (December 2021 and February 2022)

Fair Performance Evaluation and Remuneration
JRE-AM has introduced an evaluation system for all employees basedon performance and processes. At the beginning of the fiscal year,
each employee sets his or her own targets with advice from their
managers, and bonuses are paid based on the degree of achievementof those targets. Employees receive comprehensive feedback on theirperformance and specific contributions through the Semi-Annual
Follow-Up Meeting and the Final Appraisal Meeting.

29

Japan Real Estate Investment Corporation

Human resources
evaluation system
Performance evaluation
Process evaluation

Percentage of employees
who had performance
review meetings

100%

I feel that teleworking and flextime create flexible workstyles and help

As JRE-AM is open to experimenting at its own office, it recently

improve productivity. On days when I work at the office, I make a point

installed a new product (“blue sky” LED lighting) by way of a trial. Ifof having conversations with as many people as possible. As the officethe lighting proves popular,

has a free seating system, I am surrounded by different colleagues

we intend to begin using it

every time. Casual conversations allow me to hear about develop-

at our properties. Given thatments and difficulties in other departments and about matters outside

our business involves pro-my own area of expertise, which broadens my horizons. When tele-viding high-quality officeworking, I devote time to work that requires me to focus by myself.

space, I believe that creat-

Since I can have dinner with my family and have the opportunity to

ing and experiencing com-

watch my children grow by utilizing the flextime system to take part infortable workspaces of ourparental visitation days at their elementary school or in events at theirown is sure to help us cre-kindergarten, I am blessed to be in an environment that is conducive

ate outstanding proposals.

to achieving a good work–life balance.

Jun Kawamura
Real Estate Management Department
and Life Cycle Design Office,Japan Real Estate Asset Management
Co., Ltd.

Japan Real Estate Investment Corporation

30

Society

Non-Financial Data Highlights
Creating Fair Work Environments

Communication with Employees
We implement the following measures to foster an open and efficient communication environment among all employees.

Employee Satisfaction Survey

Support for promoting a strong team culture

At JRE-AM, we consider our employees to be our closest stakeholders, and we believe that improving their satisfaction isimportant for sustainable growth. For this reason, we regularly
conduct annual surveys of all employees on a wide range of topics, including the work environment, ease of working including
benefits, and educational support, in a way that prevents theidentification of individuals. Through this survey, we strive toactively collect honest opinions and frank views. The results ofthis survey are fed back to the President & CEO, and are used
for improvement activities. In addition, the HR department conducts interviews with employees to gather their opinions on how
to improve operational efficiency.

We provide a certain amount of subsidies for expenses related to
employee social gatherings, such as welcome parties and yearend parties, to support building and maintaining a strong teamculture among employees. We believe it helps not only with creating a comfortable work environment but also strengthening
JRE-AM’s competitiveness through open communication.

Employee satisfaction survey

FY2021

Employee satisfaction level (5-point scale)

4.4

Response rate100%

Anti-harassment
We conduct anti-power harassment and anti-sexual harassment
training regularly to raise awareness, and provide employeeswith the tools and guidance they need to identify, prevent andremove sexual/power harassment from the workplace.
Furthermore, we keep everyone informed about the existence ofthe compliance hotline.

For the purpose of empowering staff, uncovering risks/problems, and increasing workplace satisfaction, all employees canconsult with either the GM of the Compliance Department, alegal advisory firm, or an external specialist organization onsuch matters as work problems, grievances, improvement
requests, and whistleblowing on illegal/unethical behavior by
officers and employees. Consultations can be made anonymously, and whistleblowers are given protection under the
Whistleblower Protection Act in accordance with JRE-AM’s
internal regulations. When it receives a consultation, JRE-AM
conducts an investigation and takes the measures necessary toresolve the issue while taking into consideration the protectionof the whistleblower.

Consideration for Employees

Consideration for Tenants

We are conducting operations while staying mindful of work-lifebalance in an effort to prevent infection. Therefore, we haveestablished rules for adopting teleworking and are promoting
staggered commuting. We have clarified work priority and promote the use of IT through online meetings and other means, andhave set up a system that allows work to be carried out smoothly
even when working from home. In the office, we are careful toapply disinfectants and wear masks to prevent infection. JRE-AM
also provides PCR testing as a benefit.
Moreover, JRE-AM has entered into an advisory contract withan industrial physician in consideration for the physical and mental health of employees. JRE-AM’s employees can receive healthconsultations based on this contract. These consultations can be
conducted online if requested and they will continue to be used asa measure to support the mental health of employees amid
COVID-19.

We have installed cameras for measuring temperature at somebuildings to monitor visitors’ health condition in real time.
In addition, we are thoroughly implementing the provision of alcohol-based sanitizers and the disinfection of handrails and othersurfaces in common areas, and placing markings on floors toindicate standing positions in places where people line up, suchas elevator lobbies. We are
striving to offer safety andpeace of mind for tenants
by restricting as required
the use of lounges, smoking rooms, and other areas,
as well as the number of
Temperature measurement withpeople who can use thema non-contact thermometerat the same time.

Training Hours per Employee

Number of Employees(persons)

Male

46

43

41

37

Female(hours per year)

42

23.0

14

18

21

24

20

23

23

22

22

22

22.2
17.1

15.3
9.6

2017

2018

2019

2020

2021

2017

(FY)

2018

2019

2020

Female Employee Ratio

Training Expenses per Employee(%)(JPY per year)

37.8

43.9

48.8

52.2

47.6

34,64739,7282021(FY)

35,442

31,88017,6052017

Amid the ongoing impact of COVID-19, we are making a variety of efforts to protect the health of JRE-AM’s employees andour tenants and to provide a safe working environment. We will continue keep an eye on social trends and respond torequests from the government in a flexible manner.

Japan Real Estate Investment Corporation* Source: “Corporate awareness survey on promoting the participation of women in their workforce” conducted in July 2021 and released by Teikoku
Databank Ltd

Employee hotlines & grievance reporting

Policies and Initiatives amid COVID-19

31

Employee-related data is listed below. Particularly notable is data related to the active participation of
women, as the proportion of female employees at JRE-AM has increased far exceeding the average forJapanese companies of 26.5%.* In addition, results from the reporting period below show a 100% returnand retention rate for employees 12 months after taking childcare leave.

2018

2019

2020

(FY)

2021

2017

2018

Annual Paid Leave per Person

Monthly Average Overtime(Days)(Hours per Month)

2019

2020

(FY)

2021

11.3
14.1

13.9

11.3

8.5

12.1
4.1

2018
2018

2019
2019

2020
2020

XXXX

Promote Diverse Workforce

(FY)

2021

2017

2.3

2.4

2018

2019

2020

(FY)

2021

XXXX

FY2017FY2018FY2019FY2020

FY2021

Number of employees

37

41

43

46

42

Foreign employees

0

0

1

2

2

Of which female senior management

1

2

2

3

2

Of which female directors

1

1

0

0

1

Japan Real Estate Investment Corporation

32

Management System
JRE entered into an entrustment contract for asset investments with JRE-AM. JRE has also entered into business consignment contracts with various trust banks for custodial business related to assets and general business outsourcing.
Under the management structure below, JRE-AM conducts asset investments such as acquisition and transfer of properties and leasing spaces to tenants.
Asset Custody Company

Investment Corporation

Asset Custody
Entrustment

Mitsubishi UFJ Trust andBanking Corporation
Administrative AgentJapan Real Estate
Investment Corporation

Asset Manager
Japan Real Estate
Asset Management Co., Ltd.

Asset Management
Entrustment

Administration
Entrustment

Mitsubishi UFJ Trust andBanking Corporation, etc

General Meeting of shareholder
Auditors
Board of Directors
Compliance Committee

Investment Management Council
President & CEO

Compliance Department

Planning
Department

WEB

Our basic policy as an investment corporation and asset managementcompany is not only to comply with laws and regulations, but to meet social
demands as well. Taking care to have each employee perform his or her
duties with high ethical standards and strict self-discipline raises our
reputation among investors and garners the trust of the wider society.

34 Management System
Governance Structure of JRE
35 Risk Management
37 Compliance System

33

Japan Real Estate Investment Corporation

Finance &Accounting
Department

Real Estate
Investment
Department

Real EstateManagement
Department

Corporate
Administration
Department

Risk
Management
Department

For details, please refer to the securities report (Part 2. Details of JRE, Section 4. Status of affiliates, 1. Outline of JRE-AM,(2) Operation system (available only in Japanese).
https://www.j-re.co.jp/ja_cms/ir/library.html

Governance Structure of JRE
Status of Executive Director and Supervisory Directors
Candidates for investment corporation directors shall be elected at a general unitholders’ meeting on the proviso thatthey do not fall under any of the grounds for disqualification stipulated in the Act on Investment Trusts and Investment
Corporations and other applicable laws and regulations. The attendance rates of Executive Director and Supervisory
Directors at the board of directors’ meetings of the investment corporation (from April 2021 to March 2022) are as follows:
Title

Name

Attendance at Board of Directors Meetings

Executive Director

Yutaka Yanagisawa

100% (8 times / 8 times)

Supervisory Director

Tomohiro Okanoya

100% (8 times / 8 times)

Supervisory Director

Hiroaki Takano

100% (8 times / 8 times)

Japan Real Estate Investment Corporation34

GovernanceRisk Management
In order to gain an understanding of risk inherent in operations and manage them in appropriate fashion, JRE-AM has formulated a Basic
Risk Management Policy, Risk Management Regulations, and Risk Management Rules, and has established the Risk Management
Department, which handles risk management for JRE and reports the status of risk management for JRE to the Board of Directors.

Risk Assessment Process

1

Recognize the external and internal environment
Recognize changes in the external environment (market trends, regulatory and institutional trends, etc.) and internal environment (organizations, processes, systems, etc.) and reflect them in the following processes

2

Identify risks and review
Identify risks comprehensively according to the operational processes and sub-processes of each department and review themusing benchmarks such as supervisory guidelines and case studies

3

Assess specific risks
Assess specific risks based on “impact” and “frequency of occurrence”

4

Assess controls
Assess controls based on “impact” and “ability to control frequency of occurrence”

5

Assess residual risks
Assess residual risks based on the results of assessing (3) and (4)1 Basic Risk Management Policy
This policy defines JRE’s basic policy regarding risk management. This policy stipulates: 1) the classification and definition of risks andmanagement in line with the characteristics of each risk; 2) risk identification, assessment, and analysis; 3) activities to mitigate risks
based on assessment and the means to monitor these activities; and 4) implementation of measures when risks become apparent. This
policy also lays out provisions for an organizational structure regarding risk management and for reporting to the Board of Directors.
2 Risk Management Regulations
Under the Basic Risk Management Policy, the Risk Management Regulations clarify the types of risks related to JRE’s business operations and where they may occur, and determines management methods and systems to mitigate these risks.
Types of Risk
1. Asset management risks• Real estate investment risks (risks related to volatility
in the real estate market, real estate credit risks, etc.)• Other asset management risks (market risks, credit risks,
operational risks, etc.)

2. Other risks•C ompanywide risks (risks caused by inadequate organizational
structure, corporate governance, and internal control systems)• Disclosure risks (risks caused by failure to disclose informat
ion in a timely and appropriate manner)• Reputation risks (risks caused by the spread of negative infor
mation or perception)• Event risks (risks caused by unpredictable external factors
such as earthquakes and other natural disasters)

Risk Management System
The Board of Directors determines the Basic Risk Management Policy and supervises the development of an appropriate risk management system. In addition, the Risk Management Department has been established as the department responsible for handling risk management, and risk management managers have been assigned to each department to promote appropriate risk management.
Furthermore, the status of risk management is reported to the Board of Directors.

Compliance Risk Management through Three Lines Model
Each department of JRE-AM is proactively and autonomously working on compliance risk management. The following is a summary
based on the “Three Lines Model” concept.

1st Line
Self-Control by
Front Divisions

3 Risk Management Rules
In accordance with the Risk Management Regulations, the Risk Management Rules stipulate that each department is to clarify the risks
to be managed, that each department is to recognize and address these risks, and that the Risk Management Department will monitor
these efforts. As a general rule, once every fiscal year, each department uses a “Risk Assessment Table” to revise their list of risks, reassess their approach, and review countermeasures. The Risk Management Department monitors these actions and reports their findings
to the Board of Directors.

Basic Risk Management Policy
Determine basic policy
related to JRE's
risk management

Risk Management Regulations
Clarify the types of risks, where
they may occur, and determine
management methods andsystems to mitigate these risks.

Risk Management Rules
Establish risk management procedures
such as risk recognition and responses
for each department, monitoringby the Risk Management Department,
and reporting results of monitoring
to the Board of Directors.

35

Japan Real Estate Investment Corporation

 risk management manager is appointed in each department to promote efforts such as reviewing the “RiskA
Assessment Table,” gaining an understanding of the types of risks inherent to work under the jurisdiction of eachdepartment in order to ensure that these risks are managed appropriately.
A compliance program has been developed as a concrete implementation plan aimed at achieving proper compliance.
 he Compliance Department drafts general compliance plans, practices compliance, and inspects, checks, and works
T
to improve the level of compliance in each department.

2nd Line
Control by Risk
Management andCompliance
DivisionsIn addition to planning and promoting the Basic Risk Management Policy, the Risk Management Department monitors
the status of risk management in each department and provides direction based on the “Risk Assessment Table.” Compliance Committee has been set up to examine, deliberate over, and make decisions on compliance-related conA
cerns and pressing matters such as important transactions that involve key related parties. Independent external
experts also serve in the committee as members.
 variety of compliance training is conducted to ensure an understanding of the laws and regulations to be compliedAwith, and to ensure that officers and employees can engage in activities while maintaining thorough compliance.

3rd Line

4 Efforts Related to Risk Management
Based on the Risk Management Rules, the “Risk Assessment Table” created by each department is reviewed every year in principle
according to the following process in order to properly manage various types of risks and confirm the status of risk management.

 compliance manager has been appointed in each department to promote compliance, which includes daily compliA
ance checks and assessments, formulation and implementation of compliance programs, and formulation andimplementation of rules and manuals under jurisdiction of each department.

Review
by Audit Divisions

Internal audits are conducted every year to inspect and verify the appropriateness and effectiveness of legal compliance, internal management, risk management, crisis management, and other systems from the perspective ofensuring investor protection and fair market formation as an asset management company.

Japan Real Estate Investment Corporation36GovernancePreventing Fraud and Corruption at the Asset Management Company
The Mitsubishi Estate Group has declared that it will carry out equitable, transparent corporate activities with a primary emphasis on
earning trust. The Group’s Guidelines for Conduct forbid not justactions that could be construed as collusion with government officials or other actions considered illegal, but also entertainment andgift-giving that goes beyond the bounds of social convention.
When providing support related to the activities of politicalgroups, the Group ensures it is appropriate in accordance with relevant laws and regulations such as the Political Funds Control Act
and the Public Offices Election Act, as well as internal regulations
such at the Mitsubishi Estate Group Guidelines for Conduct.
Moreover, in 2013, the Group established the Mitsubishi EstateGroup Basic Regulations on the Prevention of Corruption to put inplace a system to prevent corruption across the organization. In
2018, the Group established and published the Mitsubishi EstateGroup Anti-Corruption Guidelines. The Guidelines document expectations of business partners with the aim of ensuring compliancethroughout the supply chain based on the cooperation of all of theGroup’s business partners. The Group provides training on corruption prevention to officers and employees and obtains pledges on
the Guidelines on the Prevention of Corruption from officers andemployees. The Group also holds annual lectures on corruption prevention, particularly for departments and Group companies engaged
in international business.
In 2017, an external organization assessed the Mitsubishi EstateGroup’s corruption prevention system as a whole. The Group has
been working to further strengthen the corruption prevention system by responding to the issues identified through the assessment.

WEB

For Mitsubishi Estate Group Guidelines for Conduct, please click here.
https://www.mec.co.jp/e/company/charter/index.html

Compliance System

Basic Principle of Compliance for the Investment
Corporation (JRE)
JRE’s basic principle of compliance is to thoroughly observe legal
and other relevant norms in regard to the business operation as
well as to respond to the requirements from society. This meansthat the investment corporation administers and oversees the outsourcing companies from the same standpoint, while complying
with legal and other relevant norms in its decision-making.

37

Japan Real Estate Investment Corporation

anonymously, and whistleblowers are given protection under
the Whistleblower Protection Act in accordance with JRE-AM’s
internal regulations. When it receives a consultation, JRE-AM
conducts an investigation and takes the measures necessary
to resolve the issue while taking into consideration the protection of the whistleblower.

For Mitsubishi Estate Group Anti-Corruption Guideline, please click here.
https://mec.disclosure.site/e/sustainability/activities/governance/compliance/pdf/anti_corruption_guideline_201903.pdf

1

Ensuring thorough compliance is one of its top priority issues, since JRE-AM understands that any insufficiency in compliance would affect even its management base.

2

 s an asset management company, JRE-AM recognizes that it bears the responsibility for realizing the values that areArequired by society in its business operation, and makes proactive and continuous efforts for full compliance to enhancethe value of its business operation both qualitatively and quantitatively.

3

JRE-AM is determined to achieve a reputation for quality among its investors by promoting compliance activities, andthereby gains the trust of a wide spectrum of society.

Conflict of Interest Policy of JRE-AM
JRE-AM recognizes the importance that its business of investing the assets of the investment corporation (JRE) is to manage the funds ofthe unitholders of the investment corporation, and makes it a principle that JRE-AM always gives the first priority to the interest of theinvestment corporation, which entrusts the asset investment to JRE-AM, and performs the asset management services in a loyal, fair,sincere, and equitable way. JRE-AM acts in the best interest of the investment corporation, and discharges the fiduciary duties as an
asset management company, and makes a fair deal at all times.
Decision-making structure in internal control system
In a case where a transaction is made with an interested party and above a certain amount

Consideration, Selection, Draft
by Department in Charge<The first compliance check>

Preliminary Verification
by Compliance Department<The second compliance check>
Reject and refer backEmployee hotlines & grievance reporting
For the purpose of empowering staff, uncovering risks/problems, and increasing workplace satisfaction, all employees
can consult with either the GM of the Compliance Department,a legal advisory firm, or an external specialist organization onsuch matters as work problems, grievances, improvement
requests, and whistleblowing on illegal/unethical behavior by
officers and employees. Consultations can be madeJRE-AM observes the Mitsubishi Estate Group Basic Regulations
on the Prevention of Corruption and the Mitsubishi Estate Group
Anti-Corruption Guidelines, of which it is a part, and works towards
preventing bribery when entertaining clients or giving gifts.
Specifically, Rules for Entertainment and Gifts of JRE-AM provides, with regard to receipt or provision of entertainment or gifts
from or to business partners, “JRE-AM’s officers and employees
shall not request, provide, or receive entertainment or gifts incompatible with sound business practices or common sense” and “Thegiving or receiving of cash as a business gift is prohibited except for
congratulatory or condolence expenses at weddings, funerals, or
ceremonial occasions.” JRE-AM strictly implements the Group
Guidelines for Conduct, for instance, detailed reporting and documentation of the details of entertainment or goods provided or
received by its officers and employees.
Moreover, with a high regard for the “Guideline to Prevent
Bribery of Foreign Public Officials,” formulated by the Ministry of
Economy, Trade and Industry, JRE-AM has established the Rules forEntertainment and Gifts and conducts specific internal processes
when dealing with public officials such as entertaining, giving gifts,
inviting, donating, and utilizing their agencies, etc. The said Rules
for Entertainment and Gifts of JRE-AM provides “Entertainment andgift-giving to public officials and others are prohibited. When entertainment or gift-giving is required for business purposes, regardlessof the amount, prior approval must be obtained from the head of thedepartment and the Director of Compliance Department, and after
expenditure, approval for settlement must be obtained from thehead of the department.”

Basic Principle of Compliance for the Asset Management Company (JRE-AM)

Deliberation and Approval
by Compliance Committee<The third compliance check>

Approval by Board of Directorsof Investment Corporation<The fourth compliance check>

Deliberation and Decision
by Investment Management Council<The fifth compliance check>

Report to JRE-AM’s Board of Directors,
Executive Director and Board of
Directors of Investment Corporation

WEB

The department in charge consults a third-party expert as appropriate, and especiallyregarding transactions with an interested party, drafts a proposal after confirmationthat there is no issue on compliance from the perspective of conflict of interest,
among other things.

The said proposal is verified preliminary by the compliance department head. In theevent of an issue on compliance, it is referred back to the department in charge.

The said proposal is approved by the majority vote of the compliance committee members and all of the votes of the external compliance committee members present.
As needed, the committee orders its halt or alternation.

Subject to the attendance of the majority of the executive and supervisory directors,
the said proposal is approved by the majority vote of the directors present.

Subject to the attendance of the CEO and the majority of the executive officers of
JRE-AM, the said proposal is decided by the CEO’s vote and the majority vote of
the officers present.

JRE-AM reports the decision to the boards of directors of JRE-AM and the investment
corporation.

For details, please refer to the report on the management systems of the issuers of real estate investment trust securities (2. Management
systems of investment corporations and asset management companies, (3) Measures for transactions that constitute conflicts of interest)(available only in Japanese).
https://www.j-re.co.jp/ja_cms/ir/library.html

Japan Real Estate Investment Corporation

38

GRI Content Index

GRI STANDARDS Content Index : General-Disclosures
GRI Index
102
GeneralDisclosures
2016

102-1
Name of the organization

2022.04• Overview of JRE• Corporate Data

102
GeneralDisclosures2016

102-18Governance structure

Location on the Company’s web site
• Basic Policy on ESG / Management Structure• Sustainability Committee• Governance Structure of JRE• Governance Structure of JRE• Management System• Management System102-19Delegating authority• Basic Policy on ESG / Management Structure• Sustainability Committee• Management System• Management System

102-20Executive-level responsibility foreconomic, environmental, andsocial topics• Basic Policy on ESG / Management Structure• Sustainability Committee• Compliance System• Compliance System

102-21
Consulting stakeholders on
economic, environmental, andsocial topics• Environmental Initiatives• Contributions to the Environment throughReal Estate Investment Management• Collaboration with Suppliers• Social Initiatives• Stakeholder Engagement• Relationship with Local Communities• Employee Initiatives• IR Library• Annual Report

102-2
Activities, brands, products, andservices• Portfolio List (Portfolio Overview)• Portfolio List (Portfolio Overview)• IR Library• Annual Report

102-3
Location of headquarters• Overview of JRE• Corporate Data

• IR Library• Annual Report

102-4
Location of operations• Overview of JRE• Corporate Data

• IR Library• Annual Report

102-5
Ownership and legal form

• Organizational Structure• Organizational Structure• IR Library• Annual Report

102-6
Ownership and legal form

• Portfolio List (Portfolio Overview)• Portfolio List

• “JRE-AM website”>Employee Initiatives• IR Library• Annual Report

Initiatives for stakeholder engagements are included in the matters under the jurisdiction of Sustainability
Committee and periodically reported to JRE’s board of directors’ meeting.

102-7
Scale of the organization• Overview of JRE• Corporate Data102-22Composition of the highest
governance body and its committees• Basic Policy on ESG / Management Structure• Sustainability Committee• Governance Structure of JRE• Governance Structure of JRE• Compliance System• Compliance System

102-23Chair of the highest
governance body• History/Directors’ Profile• Directors’ Profile• “JRE-AM website”>About JRE-AM• Corporate Data102-24
Nominating and selecting thehighest governance body• IR Library• ARTICLES OF INCORPORATION

102-25
Conflicts of interest• Compliance System• Conflict of Interest Policy of Asset Management
Company102-26
Role of highest governance bodyin setting purpose, values, andstrategy• Basic Policy on ESG / Management Structure• Sustainability Committee• Financial Highlights• Trend of Financial Results• IR Library• Annual Report

102-8
Information on employees andother workers• “JRE-AM website”>Employee Initiatives• Basic Employee Data

102-9
Supply chain• IR Library

102-11
Precautionary Principle orapproach• Environmental Initiatives• Contributions to the Environment throughReal Estate Investment Management• Climate Change Initiatives• Climate Change-Related Risks and JRE’s
Response

102-12External initiatives• International Initiatives• Signatory to PRI• Participation in UNGC

102-27
Collective knowledge of highest
governance body• Basic Policy on ESG / Management Structure• Sustainability Committee• External Evaluations and Certifications• Commitment to GRESB• PRI Assessment Result• Participation in the CDP’s Climate Change
Program102-29Identifying and managing
economic, environmental, andsocial impacts• Basic Policy on ESG / Management Structure• Sustainability Committee• Management System• Risk Management• Global Trends (Supporting the TCFD
Recommendations)102-30Effectiveness of risk management
processes• Basic Policy on ESG / Management Structure• Sustainability Committee• Management System• Risk Management102-31
Review of economic, environmental,
and social topics• Basic Policy on ESG / Management Structure• Sustainability Committee

102-32Highest governance body’s role insustainability reporting• Basic Policy on ESG / Management Structure• Sustainability Committee

102-33
Communicating critical concerns• Basic Policy on ESG / Management Structure• Sustainability Committee• Management System• Risk Management• Compliance System• Conflict of Interest Policy of Asset Management
Company

JRE has no employees and outsources all asset management operations to the asset managementcompany (JRE-AM), so we disclose the employees of the asset management company here.

• Climate Change Initiatives• Annual Report102-13
Membership of associations• “JRE-AM website”>About JRE-AM• Memberships

102-14
Statement from seniordecision-maker• JRE Information• Message from Executive Director• About JRE’s ESG Measures• Message from Our President

102-15Key impacts, risks, andopportunities• Basic Policy on ESG / Management Structure• Sustainability Policy• Materiality• About JRE’s ESG Measures• Message from Our President• Climate Change Initiatives• Climate Change-Related Risks and JRE’s Response• Basic Policy on ESG / Management Structure• Basic Policy on ESG / Management Structure• “The website of Mitsubishi Estate Co., Ltd.”HOME>CORPORATE INFORMATION:
PROFILE OF MITSUBISHI ESTATE>CODE OF CONDUCT• The Mission of Mitsubishi Estate Group• Mitsubishi Estate Group Code of Conduct• Mitsubishi Estate Group Guidelines for Conduct• Compliance System• Basic Principle of Compliance for the AssetManagement Company (JRE-AM)

102-16
Values, principles, standards, andnorms of behavior

39

GRI Index

Location on the Company’s web site

Japan Real Estate Investment Corporation

102-34Nature and total number of criticalconcerns

No siginificant concerns are reported during the reporting period.

102-35
Remuneration policies• Governance Structure of JRE• Governance Structure of JRE

102-36
Process for determining
remuneration• Governance Structure of JRE• Governance Structure of JRE

Japan Real Estate Investment Corporation

40

GRI Content Index

GRI 103: Universal Standards
GRI Index
102
GeneralDisclosures
2016

Location on the Company’s web site102-41
Collective bargaining agreements

Not applicable as JRE does not have employees.

102-43
Approach to stakeholder
engagement• Environmental Initiatives

102-47
List of material topics

102-48
Restatements of information

201
Economic
Performance2016• Contributions to the Environment throughReal Estate Investment Managemen• Collaboration with Suppliers

GRI Index
103
Management
Approach 2016

• “JRE-AM website”>Employee Initiatives• Employee Initiatives

103-2
The management approach andits components• Basic Policy on ESG / Management Structure• Sustainability Policy• Materiality• Environmental Initiatives• Environmental Performance• Contributions to the Environment throughReal Estate Investment Management• Collaboration with Suppliers• Sustainability Policy• Materiality• “JRE-AM website”>Employee Initiatives• Employee Initiatives• Basic Policy on ESG / Management Structure• Sustainability Policy• Materiality• Climate Change Initiatives• Disclosure of ESG-Related Information• GRI STANDARDS Content Index• SASB Framework (GRI Standard Content Index)• Climate Change-Related Risks and JRE’s
Response• Social Initiatives• Relationship with Local Communities• Improving Tenant Satisfaction• External Evaluations and Certifications• Sustainability Certification• Green Finance• Sustainability-Linked Loans• Green Bonds• “JRE-AM website”>Employee Initiatives• Employee Initiatives• “JRE-AM website”>Complaint Handling and
Dispute Resolution• Complaint Handling and Dispute Resolution• Basic Policy on ESG / Management Structure• Sustainability Committee• Climate Change Initiatives• Governance• External Evaluations and Certifications• Commitment to GRESB

Not applicableNot applicable

102-50
Reporting period• Disclosure of ESG-Related Information

102-51
Date of most recent report

2021/4/19

102-52
Reporting cycle• Disclosure of ESG-Related Information• Reporting scope and period

103-3
Evaluation of the management
approach• Reporting scope and period

102-53
Contact point for questions
regarding the report• Disclosure of ESG-Related Information• Inquiries

102-55
GRI content index• Disclosure of ESG-Related Information• GRI STANDARDS Content Index

102-56External assurance• Environmental Initiatives• Environmental Performance

201-2
Financial implications andother risks and opportunities due
toclimate change• Climate Change Initiatives• Climate Change-Related Risks and JRE’s
Response

GRI 300: Emvironmental Standards
Energy “Climate change initiative (promoting decarbonization and strengthening resilience)”
GRI Index
302
Energy 2016

Materiality

GRI Material Topics

1. Climate change initiative(promoting decarbonization andstrengthening resilience)• Climate Change Initiative• Environmental Considerationof Portfolio“302: Energy” / “305: Emissions”

2. Contribution to resource conservation including water and resource
recycling including water• Conservation of Water Resources• Recycling and Conservationof Resources• Environmental Considerationof Portfolio“303: Water and Effluents” / “306: Waste”

3. Contribution to conserving
biodiversity and ecosystem• Environmental Considerationof Portfolio“304: Biodiversity”

4. Enhancement of tenants’ healthand well-being, and safety• Tenant Engagement“308: Supplier Environmental Assessment” / “403: Occupational Health and Safety”“413: Local Communities” / “414: Supplier Social Assessment” /“416: Customer Health and Safety”“Customer Satisfaction (G4 Construction and Real Estate Sector Disclosures PR5)”

5. Creating a workplace where adiverse workforce can thrive• Human Resources Development
and Diversity Promotion• Employee Health and Well-being at
JRE-AM“401: Employment” / “404: Training and Education”“405: Diversity and Equal Opportunity”“412: Human Rights Assessment”

6. Enhancement of governancesystems• Enhancing Governance Systems at
Both JRE and JRE-AM“102: General Disclosures”

7. Stakeholder engagement throughinformation disclosure and ESG
evaluations• Information Disclosure andStakeholder Engagement“102: General Disclosures”“Sustainability Certification(G4 Construction and Real Estate Sector Disclosures CRE8)”

Japan Real Estate Investment Corporation• Basic Policy on ESG / Management Structure• Stakeholder Engagement• Improving Tenant Satisfaction• Relationship with Local Communities

List of Material Topics

41

103-1
Explanation of the material topic
and its Boundary• Social Initiatives

102-49Changes in reporting

Sustainability Policy

Location on the Company’s web site

Location on the Company’s web site

302-1
Energy consumption within theorganization• Environmental Initiatives

302-2
Energy consumption outside of theorganization

Energy consumption outside of the organization is not subject to reporting, therefore it is
not applicable.

302-3
Energy intensity• Environmental Initiatives• Environmental Performance

302-4
Reduction of energy consumption• Environmental Initiatives• Environmental Performance

302-5
Reductions in energy requirements of products and services• Environmental Initiatives• Environmental Performance*1

303
Water andEffluents 2018

*1
*1

• Contributions to the Environment throughReal Estate Investment Management• Environmental Performance*1• Contributions to the Environment throughReal Estate Investment Management

Water “Contribution to resource conservation including water and resource recycling including water”
GRI Index

Reviewed by athrird-party
organization

Reviewed bya thrird-party
organization

Location on the Company’s web site

303-3
Water withdrawal by source• Environmental Initiatives• Environmental Performance

303-5
Water consumption• Environmental Initiatives• Environmental Performance*1*1*1 Ernst & Yong ShinNihon LLC was engaged to provide independent limited assurance on the Environmental Performance Data on the company’s website.
*2 CSR Design Green Investment Advisory, Co., Ltd. reviewed accuracy of JRE’s ESG performance.

Japan Real Estate Investment Corporation

42

GRI Content Index

GRI 400: Social Standards
Biodiversity “Contribution to conserving biodiversity and ecosystem”
GRI Index
304
Biodiversity
2016

304-3
Habitats protected or restored• Environmental Initiatives

305
Emissions2016• Environmental Initiatives

305-2
Energy indirect (Scope 2)
GHG emissions• Environmental Initiatives

305-3
Other indirect (Scope 3)
GHG emissions• Environmental Initiatives

305-4
GHG emissions intensity• Environmental Initiatives

GRI Index

Location on the Company’s web site

401-1
New employee hires and employee turnover• “JRE-AM website”>
Employee Initiatives• Employee Initiatives

401-2
Benefits provided to full-time employeesthat are not provided to temporary or parttime employees• “JRE-AM website”>
Employee Initiatives• Employee Initiatives

401-3
Parental leave• “JRE-AM website”>
Employee Initiatives• Employee Initiatives*1

Occupational Health and Safety “Enhancement of tenants’ health and well-being, and safety”• Environmental Performance*1• Environmental Performance*1

GRI Index
403-6
Promotion of worker health403
Occupational Health and
Safety 2018

Location on the Company’s web site
• Improving Tenant
Satisfaction*2• “JRE-AM website”>
Employee Initiatives• Employee Health andWell-being*2• Environmental Performance*1

GRI Index
404
Training and Education 2016
Reviewed bya thrird-party
organization

306-5
Waste directed to disposal• Environmental Initiatives• Environmental Performance>
WEB information*1• Environmental Performance>
WEB information*1

Reviewed bya thrird-party
organization

Training and Education “Creating a workplace where a diverse workforce can thrive”

Location on the Company’s web site
• Environmental Initiatives

Location on the Company’s web site

404-1
Average hours of training per year per
employee• “JRE-AM website”>
Employee Initiatives• Employee Initiatives

404-2
Programs for upgrading employee skills
and transition assistance programs• “JRE-AM website”>
Employee Initiatives• Employee Initiatives

404-3
Percentage of employees receiving regularperformance and career development
reviews• “JRE-AM website”>
Employee Initiatives• Employee Initiatives

*2

*2

*2

Diversity and Equal Opportunity “Creating a workplace where a diverse workforce can thrive”
Supplier Environmental Assessment “Enhancement of tenants’ health and well-being, and safety”
GRI Index
308
Supplier
Environmental
Assessment
2016

43

Location on the Company’s web site308-1
New suppliers that were screenedusing environmental criteria

Supplier applicable of environmental criteria was not newly hired.

308-2
Negative environmental impacts inthe supply chain and actions taken

No specific supplier with significantly negative environmental impact was determined
during the recent period.

Japan Real Estate Investment Corporation

Reviewed bya thrird-party
organization• Environmental Performance• Contributions to the Environment throughReal Estate Investment Management

306-3
Waste generated*2• Social Initiatives*1• Environmental Initiatives*2*2• Environmental Performance

Waste “Contribution to resource conservation including water and resource recycling including water”

306
Waste 2020

Reviewed bya thrird-party
organization

Location on the Company’s web site

305-1
Direct (Scope 1)
GHG emissions

305-5
Reduction of GHG emissions

401
Employment 2016

• Contributions to the Environment throughReal Estate Investment Management

Reviewed bya thrird-party
organization

Employment “Creating a workplace where a diverse workforce can thrive”
GRI Index

Location on the Company’s web site

Emmisions “Climate change initiative (promoting decarbonization and strengthening resilience)”
GRI Index

Reviewed bya thrird-party
organization

Reviewed bya thrird-party
organization

GRI Index
405
Diversity and Equal
Opportunity 2016

Reviewed bya thrird-party
organization

Location on the Company’s web site

405-1
Diversity of governance bodies andemployees• “JRE-AM website”>
Employee Initiatives

405-2
Ratio of basic salary and remuneration of
women to men

There is no gender pay gap according to our Salary Regulations.

• Employee Initiatives*2*1 Ernst & Yong ShinNihon LLC was engaged to provide independent limited assurance on the Environmental Performance Data on the company’s website.
*2 CSR Design Green Investment Advisory, Co., Ltd. reviewed accuracy of JRE’s ESG performance.

Japan Real Estate Investment Corporation

44

GRI Content Index

Other
Human Rights Assessment “Creating a workplace where a diverse workforce can thrive”
GRI Index
412-2
Employee training on human rights policies
or procedures

412
Human Rights Assessment
2016

GRI Index
413-1
Operations with local community
engagement, impact assessments, anddevelopment programs

413-2
Operations with significant actual andpotential negative impacts on local
communities

GRI Index*2

Note: Properties owned by JRE is referred as “Office” in therequirement of this item taking into account the generalmeaning of the report. Please see “Portfolio List” of JRE’s
website regarding properties held by JRE.

45

Type and number of sustainability
certification, rating and labeling schemes
for new construction, management,
occupation and redevelopment.

*2

Location on the Company’s web site
• External Evaluations andCertifications• Sustainability Certification*2

Reviewed bya thrird-party
organization

Customer Satisfaction “Enhancement of tenants’ health and well-being, and safety”

Results of surveys measuring customer
Customer Satisfaction
sutisfaction(G4 Construction and Real
Estate Sector Disclosures PR5)

Reviewed bya thrird-party
organization

Location on the Company’s web site
• Social Initiatives• Improving Tenant Satisfaction*2*1 Ernst & Yong ShinNihon LLC was engaged to provide independent limited assurance on the Environmental Performance Data on the company’s website.
*2 CSR Design Green Investment Advisory, Co., Ltd. reviewed accuracy of JRE’s ESG performance.

No specific office with siginificantly negative impact on local communities was determined during the reporting period.

Reviewed bya thrird-party
organization

Location on the Company’s web site
Supplier applicable of environmental criteria was not newly hired.

414-2
Negative social impacts in the supply chain
and actions taken

No specific supplier with significantly negative environmental
impact was determined during the recent period.

Reviewed bya thrird-party
organization

Location on the Company’s web site

416-1
Assessment of the health and safety
impacts of product and service categories• Social Initiatives

416-2
Incidents of non-compliance concerning
the health and safety impacts of products
and services• Social Initiatives

Japan Real Estate Investment Corporation

Sustainability Certifications(G4 Construction andReal Estate Sector
Disclosures CRE8)GRI Index• Relationship with Local
Communities

414-1
New suppliers that were screened usingsocial criteria

GRI Index

Reviewed bya thrird-party
organization

Location on the Company’s web site
• Social Initiatives

Customer Health and Safety “Enhancement of tenants’ health and well-being, and safety”

416
Customer Health and Safety
2016

GRI Index• Employee Initiatives

Supplier Social Assessment “Enhancement of tenants’ health and well-being, and safety”

414
Supplier Social Assessment
2016

Sustainability Certifications “Stakeholder engagement through information disclosure and ESG evaluations”

Location on the Company’s web site
• “JRE-AM website”>
Employee Initiatives

Local Communities “Enhancement of tenants’ health and well-being, and safety”

413
Local Communities 2016

Reviewed bya thrird-party
organization• Improving Tenant
Satisfaction*2• Improving Tenant
Satisfaction

JRE sets “Adaptation to new earthquake-resistant standards orequivalent structure/strength” as one of its acqusition criteria.
All properties in the current portfolio held by JRE also meet thesame criteria.

*2Japan Real Estate Investment Corporation

46

SASB Framework

Activity Metrics
SASB Disclosure CodeDisclosure MetricFiscal 2019

Fiscal 2020

Fiscal 2021

Unit

IF-RE-000.A

Number of assets

73

72

75

assets

IF-RE-000.B

Leasable floor area

871,326

873,873

907,231m2

IF-RE-000.C

Percentage of indirectly managed assets

1.0

1.0

1.0

%

IF-RE-000.D

Average occupancy rate

99.7

97.9

97.0

%

SASB Disclosure CodeIF-RE-130a.5

Note: Fiscal years refer to the period starting from April 1 and ending at March 31 of the following year. Fiscal 2021 represents the 40thand 41st fiscal year.The number of assets and the leasable area are the figures for the entire year and include properties soldduring each fiscal period. Accordingly, they differ from the figures at the end of fiscal periods (excluding leasehold land assets).
The average occupancy rate is the portfolio average of the year-end occupancy rate at the end of each fiscal year.

Disclosure Topic: Energy Management
SASB Disclosure CodeDisclosure MetricFiscal 2019

Fiscal 2020

Fiscal 2021

Unit

100

100

100

Percentage (%)
by floor area

IF-RE-130a.1

Energy consumption data coverage

IF-RE-130a.2

Total energy consumed by portfolio areawith data coverage

246,064

231,097

226,078

MWh

Percentage grid electricity

78.50

77.02

77.29

%

Percentage renewable electricity

1.27

1.77

17.00

%

Like-for-like percentage change in energy
consumption for the portfolio area withdata coverage

–3.14

–7.90

–3.64

%

93.64

91.00

94.70

Percentage (%)
by floor area

20.69

21.34

21.16

Percentage (%)
by floor area

IF-RE-130a.3

Percentage of area with data coverage

IF-RE-130a.4

Percentage of eligible portfolio that has anenergy rating

Percentage of eligible portfolio that is certified to ENERGY STAR
Not applicable as the ENERGY STAR Program does not cover real estate in Japan
Reference
information

Percentage of eligible portfolio with Green
Building certification

74.30

75.65

IF-RE-130a.5

 escription of how building energy management considerations are integrated into property investment analysis and operD
ational strategy (Please refer to the “Environment” section of this report beginning on page 13 for more information)
Based on the Sustainability Policy items “1. Climate change initiative (promoting decarbonization and strengthening resilience)” and “2. Contribution to resource conservation including water, and resource recycling”, JRE has set reduction targets
for greenhouse gas emissions in order to improve the environmental performance of its real estate portfolio.In order toachieve these targets, JRE’s asset management company, JRE-AM implements measures to improve the operational performance of buildings, conduct energy efficiency retrofits, and engage tenants on energy efficiency based on its “Energy
Conservation Policy”, which stipulates operational policies for improving energy efficiency of the real estate portfolio, and its“GHG Emissions Reduction Policy”, which aims to create a decarbonation society.
In light of growing worldwide concern in recent years over the risks from climate change, JRE recognizes the importance of
implementing an appropriate response, which includes reduction of GHG emissions is an important management issue inregard to our business strategy for ensuring the sustainability of business activities. Although we have been working to
reduce energy and GHG emissions, and are at a lower level than in the past, in fiscal 2019, we verified the possibility of reducing CO2 emissions from over 70 of our properties and established reduction targets for 2030. Subsequently, as we proactively
advanced the introduction of electricity made from renewable energy and it became clear that we could expect to achieve ourprevious emissions targets ahead of schedule, we updated them to even more ambitious targets. Going forward, JRE will contribute to a shift to a decarbonized society through the reduction of GHG emissions while securing its preparedness to natural
disasters and other phenomena arising from climate change.

47

Japan Real Estate Investment Corporation

SASB Disclosure CodeIF-RE-140a.1

Fiscal 2020

Fiscal 2021

Unit

JRE is steadily implementing equipment retrofitting that includes switching to LED lighting and installing more energy efficient air conditioning units to reduce its environmental impact based on its sustainability plan.
JRE measures and gains an understanding of the energy consumption, water use, and waste of each building on a monthly
basis, outsourcing data calculation and data analysis to a company specializing in EMS to execute its PDCA cycle. If there is alarge difference in the aggregated data from the previous month or year, we investigate the cause by
conducting interviews with the property manager and ensuring accurate data. We also constantly monitor the reduction
effects of green refurbishments such as LED and AC upgrades.
JRE has established selection criteria for PM companies to which it commissions the management of properties, and evaluates all of the PM companies once a year, in principle. In addition to the companies’ building management and maintenanceabilities, JRE evaluates the PM companies by their environmental friendliness in terms of operations, occupational healthand safety measures for their employees, and understanding of and cooperation with the Sustainability Policy set by JRE-AM.
Moreover, JRE requests the PM companies to make proposals to help JRE reduce environmental impacts, such as measures
to reduce energy consumption as part of their management duties. In this way, JRE makes environmental improvement
efforts in cooperation with the PM companies.
JRE makes contracts with professional firms to conduct energy assessments of a selection of its properties, and utilizes
the results to understand the current level of their energy performance and to formulate future policies.
JRE has determined “Environmental Consideration of Portfolio” as one of its key ESG issues (materiality) and established
the acquisition of environmental certifications (including green building certifications and energy-efficiency ratings) as a KPI.
JRE will ensure that more than 70% of its properties obtain environmental certifications and work to continuously operate
office buildings that are the tenants’ first choice.

Disclosure Metric
Water withdrawal data coverage asa percentage of total floor area

Fiscal 2019

Fiscal 2020

Fiscal 2021

Unit

100

100

100

Percentage (%)
by floor area

Water withdrawal data coverage as a percentage of floor area in regions with high or extremely high baseline water stress
At this time, there are no properties located in regions with high or extremely high baseline water stress.
IF-RE-140a.2

Percentage (%)
by floor area

Notes: Properties that have obtained BELS certification have been included.
Reference information: Percentage of eligible portfolio that has DBJ Green Building certification or CASBEE certification.
Percentage of properties to have acquired environmental certifications (green building certification andenergy rating) is 75.0% based on gross floor area.

Fiscal 2019

Disclosure Topic: Water Management

IF-RE-140a.3
74.19

Disclosure Metric

IF-RE-140a.4

Total water withdrawn by portfolio area withdata coverage

886,256

655,641645,751

m3

As Percentage of water withdrawal inregions with high or extremely high baselinewater stress

0

0

0

%

Like-for-life percentage change in water
withdrawn for portfolio area with data
coverage–5.70–26.89–2.35%

Percentage of area with data coverage

93.64

91.00

94.70

Percentage (%)
by floor areaDescription of water management risks and discussion of strategies and practices to mitigate those risks
At this time, there is no region in Japan where water stress has been deemed high or extremely high, so JRE’s portfolio issubject to low risk of water shortage. However, as a general rule, public water and sewerage services are purchased for properties within JRE portfolio, and if the usage prices are raised, the overall operating costs for the portfolio may increase.
Conversely, if we can reduce consumption by improving the efficiency of water usage in buildings, there will be a corresponding reduction in operating costs
For this reason, JRE has “2. Contribution to resource conservation including water and resource recycling” in its Sustainability
Policy, In keeping with this policy, JRE engages in efficient usage and management of water resources for its portfolio. In fiscal
2020, we set a target of 20% reduction in water consumption intensity relative to fiscal 2013 as a long-term policy for reducing
consumption for fiscal 2030. In fiscal 2021, together with the revision of the base year for CO2 emissions reduction targets, werevised the base year for water usage targets.
At JRE, we are employing the following strategies for managing water consumption in our portfolio:• Implementation of technical evaluations (water-saving diagnoses) on the water-saving potential of buildings• Active introduction of water-saving equipment such as water-saving toilets and devices upon retrofit• Introduction of on-location water drainage equipment and equipment for water reuse• Renewal of irrigation equipment for exterior planting and adoption of landscapings that are easy to manage, with lesswater consumption• Thorough compliance with environmental laws and regulations, monitoring of water consumption, and timely improvement through the implementation of an in-house EMS PDCA cycle

Japan Real Estate Investment Corporation

48

SASB Framework

Disclosure Topic: Management of Tenant Sustainability Impact
SASB Disclosure CodeIF-RE-410a.1

Reference
information

Disclosure Metric

Disclosure Topic: Climate Change Adaptation
Fiscal 2019

Fiscal 2020

Fiscal 2021

Unit

Percentage of new leases that containa cost recovery clause for resource
efficiency-related capital improvements

—

—

66.7

Percentage (%)
by floor area

Associated leased floor area——

134,037m2

Percentage of total leasable floor area forbuildings leased under a green leaseagreement

42.3

67.9

75.0

Percentage (%)
by floor area

Of which, floor area percentage for buildings leased under a green lease agreementthat contains a cost recovery clause

54.9

53.1

58.4

Percentage (%)
by floor area

SASB Disclosure CodeIF-RE-450a.1

Disclosure Metric
Area of properties located in 100-year
flood zones

Fiscal 2019

Fiscal 2020

Fiscal 2021

Unit

551,331

676,024

691,570

m2

Amount recorded refers to the total floor area of properties located in areas where inundation of more than 0 m indepth is expected based on hazard maps (primarily the maximum expected scale) issued by local governments.
Japanese hazard maps (maximum estimated scale) are developed for areas with an annual exceedance probability of
1 in 1,000 for flood damage. We have integrated risk evaluations since fiscal 2021 based on the maximum expected scale.
IF-RE-450a.2

 escription of climate change risk exposure analysis, degree of systematic portfolio exposure, and strategies
Dfor mitigating risks
Please refer to the ESG website “Climate Change Initiatives” page.
https://jre-esg.com/en/environment/climate.html

Note: “Green lease agreements” in the reference information above refers to provisions in leasing contracts
related to both refurbishments and arrangements for environmentally conscious building operations.
IF-RE-410a.2

IF-RE-410a.3

Percentage of tenants that are separately
metered or submetered for grid electricity
consumption

100

100

100

Percentage (%)
by floor area

Percentage of tenants that are separately
metered or submetered for water
withdrawals

90.7

91.7

92.9

Percentage (%)
by floor areaDiscussionof approach to measuring, incentivizing, and improving sustainability impacts of tenants(Please refer to the “Tenants & Partners” section of this report beginning on page 27 for more information)
Aiming to make environmental contributions by collaborating with tenants, JRE has been gradually introducing green leases
that incorporate both operational improvements and efficiency retrofits.Moreover, JRE is conducting diverse sustainability initiatives together with our tenants.
Sustainability Guide to Promote Owner and Tenant Collaboration:
JRE has created the Sustainability Guide and distributes them to its tenants aiming to promote close collaboration with them.
The Sustainability Guide provides tenants various tips on what they can do in the office, mainly from the viewpoints ofthe“environment” and “tenant well-being,” supplemented with real-life case studies.
VOL.1 Work Style Reform

VOL.2 Offices in the“New Normal” Era, Waste Recycling• Toward a Sustainable Society• Case1: Offices in the “New Normal”• Our Thoughts• Case2: Waste Recycling• Case1: Example of a Large-Scale Office• What We Can Do Now• Case2: Example of Small- and Medium-Sized Offices• Case3: Creating New Spaces in the Current Office• What We Can Do Now
In addition to the guide, we have the following engagements with our tenants:• Introductio of an online system that enables tenants to check their energy use• Holding Global Warming Prevention Committee meetings open to tenant participation• Participation in the energy conservation month campaign and other activities to promote energy efficiency
In many buildings, tenants enter into leasing contracts in which JRE bills the tenants for utility costs based on actual consumption of energy, water, etc. for which the tenant is obligated to pay the actual cost. This scheme therefore provides tenants with incentives to reduce actual consumption. Tenants are also able to reap the repair-related benefits of green leases,
with these costs being shared with the property owner.

49

Japan Real Estate Investment Corporation

Japan Real Estate Investment Corporation50

100-0004
Otemachi Park Building 1-1-1 Otemachi,
Chiyoda-ku, Tokyo 100-0004, Japan
URL : https://www.j-re.co.jp/en/

Printed in Japan