Sustainability Book

2021

7-3 Nihonbashi Odenmacho, Chuo-ku, Tokyo, Japan
Phone: +81-3-5623-8101
URL: https://www.hulic.co.jp/en/

In the Medium- and Long-Term Management Plan (2020 -2029), which began in FY2020, we aim to implement managementthat emphasizes sustainable co-creation and co-existence with society as one of the basic strategies. With “driving innovation
and accelerating progress” as our motto, we are focusing on executing sustainability-conscious business operations and value
creation to help resolve social issues and to pursue initiatives that synchronize social value creation with corporate growth by
evolving flexibly in response to changes in the macro environment.

Materiality in sustainability and progress

Message from the Management

The starting point of Hulic's Sustainable Management is "For therealization of a society full of safety, peace of mind and trust, andfor the continuous improvement of corporate value".

We identified and selected issues of especially high materiality in terms of their importance to Hulic and to our stakeholders. We
will continue to review the materiality issues we have identified and implement effective initiatives and counteractions as well as
assess opportunities and risks. To steadily implement these initiatives, we also set KPIs and other targets so that we canquantitatively evaluate every materiality issue, while reviewing their status every year.

To all stakeholders
We fulfill the tasks and responsibilities demanded of us through corporate activities in the real estate business, aspiring tofurther grow as we create value to share with society, customers, local communities, shareholders, employees, and all otherstakeholders.
We look forward to the growth and evolution of Hulic, which has continued to change with the keywords “driving innovation
and accelerating progress,” and we sincerely ask for your continued support.
Chairman, Representative Director

President, Representative Director

Saburo Nihiura

Manabu Yoshidome
Social Initiatives

For more than half a century, Hulic has been operating a real estate leasing business focusing on a portfolio of officebuildings in central Tokyo. Our strength of having a solid business foundation, based on the prime locations of properties,
has allowed us to maintain continued growth of profits and dividends since our listing in 2008, without being affected bymarket conditions even in the face of adversity, including difficulties associated with the Financial Crisis and the Great
East Japan Earthquake. Hulic’s sustainable growth is supported by sustainability-conscious business operations and value
creation to solve social issues and pursue initiatives that combine social value creation with corporate growth. In our
corporate philosophy, we uphold the following values: “For the realization of a society full of safety, peace of mind andtrust, and for the continuous improvement of corporate value”. As part of our management strategy, we consider thattaking initiatives to address social issues will create business opportunities. We will further increase Hulic’s purpose byimplementing management that emphasizes sustainability.

Our Approach to Sustainability

Medium- and Long-Term Management Plan (2020 to 2029) and Sustainability

Environmental Initiatives

Initiatives

For the realization of a society fullof safety, peace of mind and trust,and for the continuous
improvement of corporate value

CONTENTS
Our Approach to Sustainability

Social Initiatives

Message from the Management

Initiatives for Customers ................................................................ 66
Collaboration with Business Partners ............................................ 70
Initiatives for Employees ................................................................ 71

Corporate Philosophy and Sustainability .......................................

2

Hulic Group’s Value Creation Process ............................................. 8
Materiality Assessment .................................................................. 10
Opportunities and Risks Related to Materiality and Our Actions .... 12
Non-financial Highlights ................................................................ 14
Key Performance Indicators (KPIs) /Targets and Results ............. 16

Environmental Initiatives
Basic Policy for Environment ......................................................... 18
Initiatives for Climate Change ....................................................... 28
Building a Recycling-oriented Society ........................................... 42
Initiatives for Biodiversity .............................................................. 50
Information Disclosure based on TCFD Recommendations ......... 52

Initiatives for Local Communities .................................................. 84

Corporate GovernanceCorporate Governance ................................................................... 92
External Directors and External Auditors ..................................... 100
Auditing Mechanism ...................................................................... 101
Internal Control System ................................................................. 104
Risk Management .......................................................................... 105
Compliance ..................................................................................... 108
Initiatives for Shareholders and Investors .................................... 113

Corporate Governance

Sustainability

External Evaluation

Editorial Policy
The "Sustainability Book 2021" was created with the aim of informing stakeholders about our various sustainability initiatives that link the creation ofsocial value and corporate growth, and creating new opportunities for dialogue.
Reporting Boundary
Hulic Co., Ltd. and its Group companies

Chairman,
Representative Director

Saburo Nihiura

President,
Representative Director

Manabu Yoshidome

Time of IssuanceAugust 2021

Reference Guidelines
GRI (Global Reporting Initiative)"The GRI Sustainability Reporting Standards""The Environmental Reporting Guidelines (2018)"
TCFD (Task Force on Climate-related Financial Disclosures )Final Report “Recommendations of the Task Force on Climate-related
Financial Disclosures”

Hulic Co., Ltd. Sustainability Book 2021

External Evaluation

Third-party Assurance .................................................................... 116
External Evaluations ....................................................................... 116

1

Corporate Philosophy

For the realization of a society full of safety,
peace of mind and trust,and for the continuous improvement of corporate value

Our Code of Conduct, which concretely describes our Basic Stance in an easy-to-understand manner from the viewpointof each employee, underlies actions our directors and employees should take.
1. R espect human rights and prohibit discrimination andharassment
2. Comply with laws and rules
3. C onduct business in a faithful and fair manner
4. Manage information appropriately
5. Adhere to insider trading regulations
6. A
 void involvement with anti-social forces

7. B
 e considerate of environmental conservation
8. Maintain and encourage the best communication
possible
9. Respect intellectual property rights
10. Prohibit bribery, and rules concerning gifts andentertainments
11. Ensure transparency and reasonableness of transactions

Sustainability Vision
We aim to pursue realization of a sustainable society and continued growth of Hulic by putting our Corporate
Philosophy into practice. We commit to take a faithful approach to all of stakeholders.
To this end, we pursue initiatives based on a three-point Vision.

Our Approach to Sustainability

Corporate Philosophy and Basic Stance

Our Code of Conduct

Environmental Initiatives

Corporate Philosophy and Sustainability◦ We create shared value with our society by actively engaging with the environmental issues through our corporate

Corporate
CultureWe always conduct business from a new viewpoint in an effort to increase ourcorporate value.

Stance to
Customers

We are committed to providing optimal products and services to customers, placing
customer satisfaction as our top priority.

Ideal
Employees

Each of Hulic's employees strives to provide high quality value as a professional.

Basic Principles of Corporate Conduct
The Basic Principles of Corporate Conduct, which concretely describes our Basic Stance in an easy-to-understand mannerfrom a company viewpoint, underlies our decision-making in business.

1.Awareness of Corporate Social Responsibility
Contribute to domestic and overseas economies and stable development of society by devoting ourselves to sound business based on
self-responsibility and fulfilling our social missions.

2.Practice of Customer-first Policy
Treat customers faithfully and kindly, listen to their requests with sincerity and provide sophisticated, efficient and high-quality services.

3.Faithful and Fair Conducts
Always act with sincerity and fairness in compliance with laws and regulations, their spirits, as well as social norms. Decisively confront
anti-social forces threatening the order and stability of a civil society.

◦ We lay the foundation for the future by providing peace of mind to our customers through offering our high value-

added products and services.
◦ We take compliance seriously, respect human rights and strive to perform transparent corporate activities based on

our high ethical standards.

Relationships between the Philosophical Framework and Medium- and Long-term Management Plan
Our corporate philosophy is to “For the realization of a society full of safety, peace of mind and trust,” which means
the purpose we exist is to create shared value with society through our corporate activities. Accordingly, our corporate
philosophy and our sustainability vision are on both aspects of social relationships. Based on our corporate philosophy andsustainability vision, we formulated our corporate strategies as well as the Medium- and Long-term Management Plans.
Corporate Philosophy
Clarifying what we value and why we exist as a company

Basic StanceShowing who we need to be to realize our corporate philosophy

Basic Principles of Corporate Conduct
Ethical standards to realize our corporate philosophy
and basic stance

Sustainability Vision
Creating shared value
with society through practicing
our corporate philosophy

Our Code of Conduct
A code of conduct for all to adhere

4.Contribution to and Harmony with the Society
Contribute to social development and improvement through the appropriate use of our fundamental functions. While being aware of
responsibilities as good corporate citizens, commit ourselves to corporate conducts in accordance with the social common sense andexpectations through close communication with society.

5.Respect for Humanity
Build an organizational culture full of respect for humanity and that values comfort and well-being, such that people can work withhigh motivation and an open-heart.

2

Hulic Co., Ltd. Sustainability Book 2021

Social Initiatives

We aim to be a company that grows each day by utilizing stable corporate
infrastructures.

Corporate Governance

Ideal
Company

activities.

Management Foundation

Corporate Strategies

Applicable Laws and Regulations

Medium－and Long－term Management Plan
(2020-2029)

Company Rules

Hulic Co., Ltd. Sustainability Book 2021

External Evaluation

Basic Stance3Outline of Medium- and Long-term Management Plan (2020-2029)

Participation in Initiatives

Target Profile in
10 years

Hulic takes part in a range of global and domestic initiatives aimed at creating a sustainable society as well as increasing our purpose
as a real estate company.

Strike a balance between P/L growth, profitability, B/S soundness, and productivity (efficiency)
at a high level and achieve further growth through dynamic transformation backed by
overwhelming speedy decision-making

Basic Strategies

WEB

Business
1 Further evolve the2business model andrestructure the leasing
portfolio

3

Strengthen
development
and value-added
businesses reate unique newCbusiness domains
and improve Group
strengths

Management Infrastructure4 Strengthen the management5 Implement management thatfoundation and implement stringent
risk management

WEB

In September 2015, the United Nations Summit unanimously adopted theSDGs as goals to be achieved by 2030. The SDGs consist of 17 goals insuch areas as sustainable energy, the creation of a robust infrastructure,climate change countermeasures, and high-quality education.
   Through our corporate activities, we address social issues and seek to find solutions. In concrete terms, we identify issues of great importance to us
and our stakeholders as materiality issues, then implement measures to navigate relevant opportunities and risks.

emphasizes sustainable co-creationand co-existence with society

New Medium- and Long-term Management Plan (2020-2029)
https://www.hulic.co.jp/en/ir/strategy/medium_term.html

Value Creation Process
https://hulic.s.digitaldesk.jp/en/sustainability/about/process/value.html

WEB

Paris Agreement and SBT
We intend to reduce CO2 emissions in line with the 2015 Paris Agreement adopted at the 21st Conference of
the Parties to the United Nations Framework Convention on Climate Change (COP21). To reach this goal, weplan to supply 100% of the electricity used by all leasing properties owned by the Company* with electricity
generated by Hulic-owned solar photovoltaic equipment that does not use the FIT system.* In this way, we
expect to achieve net zero CO2 emissions from electricity. Further, to steadily reduce CO2 emissions in line withthe 2015 Paris Agreement, we have committed to setting and working toward SBT targets* within two years.
*Excludes single-tenant lease properties, residential properties and unmanaged shared properties for which we do not manage energy, and real estate for sale.
*A feed-in tariff (FIT) system for electricity that requires utility companies to purchase electricity generated using renewable sources for a certain period of time at a pricespecified by the national government. FIT electricity is not considered renewable energy as a portion of the cost of the electricity purchased by a utility company is added to theconsumer’s bill so the tax payer must bear some of the costs. Therefore, achieving the 100% goal with FIT electricity is not considered RE100 by definition.
*Science-based targets are CO2 emission reduction targets in the next 5 to 15 years for the private sector that align with the Paris Agreement pathways. Paris Agreement: World
governments committed to limiting global temperature rise to well-below 2°C above pre-industrial levels and pursuing efforts to limit warming to 1.5°C at the 2015 United
Nations Climate Change Conference (COP 21).

Task Force on Climate-related Financial Disclosures (TCFD*)
Mindful of the importance of disclosing climate-related financial information, we announced our support for
the information disclosure framework recommended by the Task Force on Climate-related Financial Disclosures(TCFD*) in 2020 and started disclosing information in line with the recommendations after completing
analysis and responses on the recommended framework.
   We will continue providing to our stakeholders information regarding our initiatives on creating a sustainable society in an easy-to-understand way
and will work to further improve information disclosure.
* TCFD (Task Force on Climate-related Financial Disclosures) was established by the Financial Stability Board(FSB), an international organization that includes the central banks of major countries as well as financial
regulators. The TCFD proposes a framework for disclosing climate-related information to investors.

Results of FY2020 initiatives related our sustainability
Environment: To realize a “carbon-free and recycling-oriented society”
 eclared a commitment to act on building a carbon-free society, started initiatives to achieve net zero CO2 emissions by 2050*●D dvance the initiative to achieve RE100 by 2025*●A nnounced our support for the TCFD recommendations, conducted a series of actions including the scenario analysis of climate●Achange risks and opportunities in our businesses, etc.

WEB

Information Disclosure based on TCFD Recommendations
https://www.hulic.co.jp/en/sustainability/ecology/tcfd/

RE100
In 2019, we participated in RE100, an international initiative for member companies to aim to use 100%
renewable energy for the electric power required for business activities. We intend to use 100% renewableenergy by 2024, developing our own solar power generation facilities that don't apply the feed-in tariff (FIT*)
system to cover the power consumption of the Group.
*A feed-in tariff (FIT) system for electricity that requires utility companies to purchase electricity generated using renewablesources for a certain period of time at a price specified by the national government.
FIT electricity is not considered renewable energy as a portion of the cost of the electricity purchased by a utility company isadded to the consumer’s bill so the tax payer must bear some of the costs. Therefore, achieving the 100% goal with FIT electricity is not considered RE100 by definition.

● Implementing the reduction of waste disposal by applying longer-life designs as standard specifications

Challenge Zero

● Issuing Japan First Sustainability-Linked Bonds (Maturity: 10 years, Issue amount: JPY10 billion)

Challenge Zero (Challenge Net Zero Carbon Innovation), originated by the Japan Business Federation, is an
initiative that views the creation of a decarbonized society as an important management issue. Companies
participate if they are looking to develop innovative technologies early on and to implement them in society.
The goal is to realize a net zero greenhouse gas emission society as soon as possible, in line with the Paris
Agreement. Hulic plans developing power generation and heat supply systems that use food waste from commercial facilities and hotels. The system
will be used in buildings to convert waste to energy, to achieve zero emissions, and to save on labor during operations. We are also striving to set an
example for revitalizing forestry business by using wood biomass.

*We brought forward target years for each to 2030 and 2024, respectively in August 2021, and are accelerating implementation.

Society: providing value to the stakeholders● Continuing operation of a real estate business that emphasizes earthquake resistance and environmentally friendly measures trengthen relationships with local communities and other stakeholders●S● Implementing a wide range of social contribution activities (launching new Shogi championships for women (Hulic Cup Hakurei

Championships and women's rank-deciding competition), supporting para-badminton, supporting single-parent households,
donating books to a nearby elementary school, etc.).

Corporate governance: Promotion of balanced management
 aintaining sound corporate governance based on our Corporate Governance Guidelines●M etting additional nonfinancial KPIs (assessment of the effectiveness of the Board of Directors)●S

4

Opportunities and Risks related to Materiality and Our Actions
https://www.hulic.co.jp/en/sustainability/about/process/initiative.html

Environmental Initiatives

Basic Policy

Sustainable Development Goals (SDGs)

Hulic Co., Ltd. Sustainability Book 2021

Social Initiatives

macro environment

Keidanren Biodiversity Declaration Initiative
Biodiversity conservation, along with efforts to address climate change and realize a recycling-oriented society, constitute the main pillar of Hulic
environmental materiality issue. With the United Nations Decade on Biodiversity ended in 2020, Keidanren (Japan Business Federation) made a proposal
to continue this initiative in the Japanese business community with the Keidanren Biodiversity Declaration (revised edition) announced in June 2020.
Hulic endorses and participates in this Keidanren initiative, and as a member of the international community, we will collaborate and cooperate withvarious stakeholders to resolve social issues.

Corporate Governanceincrease our corporate value through evolving ourselves flexibly in response to changes inExternal Evaluation“Driving innovation and accelerating progress” as our motto, we continue to steadily

Our Approach to Sustainability

Our Approach to Sustainability

Support of the Japan Business Federation’s One Percent Club Initiative
We support the One Percent Club initiative, a move advocated by Keidanren (Japan Business Federation). We are committing to spend at least one
percent of ordinary income on social causes every year.

Hulic Co., Ltd. Sustainability Book 20215

Issuance of Integrated Report and the Sustainability Book

Activities of Sustainability Supporters

We have been issuing the Integrated Report since 2020. In the Integrated Report, we describe how our strengths have been used tocreate value for customers, society, and the Company. We also present financial information and outline the sustainability initiatives
which support our corporate growth in an easy-to-understand way for our stakeholders. The aim of the Integrated Report is to create
the opportunity for a new dialogue. The Integrated Report is reviewed by the Board of Directors prior to being issued. Further, Hulic
discontinued its CSR Report, published since 2008, and instead compiles sustainability initiatives aimed at realizing a society full of safety,
peace of mind and trust, and for the continuous improvement of corporate value in the Sustainability Book as well as on the Hulic website.

Approximately 20 employees are appointed from Hulic Group companies as sustainability supporters. During a one-year term assustainability supporters, they play a central role in social contribution activities that include hosting a summer festival, conducting
satoyama conservation activities and sorting used stamps. Additionally, sustainability supporters assist the Corporate Sustainability
Office in the promulgation and inculcation of the Hulic Sustainability Vision into the entire Group. At sustainability supporter meetings,
opinions are proactively exchanged and proposals submitted that contribute to sustainability initiatives and the formulation of actionplans.

WEB

Integrated Reporthttps://www.hulic.co.jp/en/ir/library/annual/

Environmental Initiatives

Organizational Structure
Establishment of the Sustainability Committee
Sorting used stamps

Social Initiatives

We have transformed the “CSR Committee” to “Sustainability Committee” (the Committee) upon establishing the Sustainability
Vision. The Committee will discuss and coordinate material management matters relating to strengthening of our long-termcompetitiveness and risk management reflecting discussions and developments associated with not only CSR but also ESG and SDGs
in Japan and around the world.
The President chairs the Committee as commitment of top management is of upmost importance in successful medium and long-term
engagements. Other members of the Committee include Vice President, Senior Executive Managing Officer, General Managers ofBusiness Planning and Management Department, Real Estate Planning Department, and Group company executives.
   Further, based on TCFD recommendations, we established a governance mechanism under which the Sustainability Committee
deliberates and coordinates matters related to climate change. The Committee evaluates the impact of climate change on business atleast once a year, formulates policies and strategies for mitigating identified risks and seizing opportunities, and discusses how to adapt
to climate change, including reflecting its impact in plans, budgets and targets. The Committee also sets KPIs related to sustainability,
including climate change, and evaluates progress by reviewing performance. The Sustainability Committee submits reports on the
deliberation of matters related to climate change at least once a year to the Board of Directors, which oversees the committee.

Our Approach to Sustainability

Our Approach to Sustainability

Organizational Structure
Board of Directors
ReportOversight

Sustainability Committee
Corporate GovernanceDiscuss and coordinate sustainability including the policy for sustainability activities reflecting
ESG/SDGs related developments both at home and around the world
Chairperson: President Members: Vice President, Senior Executive Managing Officer, GMs of Business Planning and Management Department, Real Estate
Planning Department and Technology and Environment Development Department

Corporate Sustainability Office, Business Planning and Management Department•

Planning and management of sustainability related matters

Sustainability Supporters
SocialCSR(Materiality)
・Enhance earthquake countermeasures in Hulic's
properties
・Advance health and productivity management
・Improve customer satisfaction
・Promote senior citizen-related business・Promote tourism-related business・Advance work-life balance
・Advance talent development
・Promote diversity and inclusion
・Increase employment of persons with disabilities
・Respect for human rights

Information disclosure(Examples of major activities)<Social Welfare>
Grant-type scholarship program
for training of welfare caretakerSupported single-parent
households<Community activities>
Opening of inhouse day-carenursery to the local community<Mécénat>
Supporting Shogi (Japanesechess)<Academic research>
Hosting of Student Idea
Competition<Education>
Supported environmental studies
at Kyoto University

External Evaluation

Environment(Materiality)
・Reduce CO2 emissions
・Use renewable energy and develop
new technologies
・Reduce waste disposal
・Implement longer life design
・Reduce water consumption
・Promote greening
・Implement environmentally friendly
management<Healthcare & sport>
Supporting Japan
Para-Badminton Federation

Communication

Stakeholders
Shareholders,
Investors

6

Hulic Co., Ltd. Sustainability Book 2021

Employees

Customers

Business Partners

Government andPublic Administration

Local Communities

Global Environment

Hulic Co., Ltd. Sustainability Book 2021

7

For the realization of a society full of safety,
peace of mind and trust,and for the continuous improvement ofcorporate value

Materiality identified from social issues
E Environment-related issues

S Social issues

G Corporate governance-related issues

Actions for climate change
Efficient use of resources
Promotion of the ecosystem
protection and restoration
Enhancement of environmental
management system

Provision of safe and secure lifestyles
Provision of healthy and comfortable lifestyles
Coexistence with business partners / local communities
Response to aging society
Response to increasing number of tourists
Striking a work-life balance and advancement of talent development
Advancement of diversity and inclusion and respect for human rights
Practicing sustainable agriculture

Corporate governance and compliance
Response to changes in financial and real estatemarkets
Business continuity plans (BCPs)

Growth Strategies and Business Activities

Strengths Created from Selection and Concentration*1

Achievements of Business Activities

Properties in prime locations

Financial achievements*2(Manufactured capital)• Approx. 250 properties owned or under management• Focus areas: Ginza, Shinjuku East Side, Shibuya / Aoyama,

Driving Innovation and Accelerating Progress

Asakusa(excluding residential and related properties)

Balanced Management•Approx. 80% of properties are within a 5-minute walkof a station (excluding residential and related property)

A small group of elite professionals

Strike a balance between P/L Growth, Profitability, B/SSoundness, and Productivity (efficiency) at a high level(Human capital)• E mployees (consolidated basis): 1,934

Business Activities(of which, 287 are in the real estate business) rdinary Income per employee (parent company basis):•O• O rdinary Income JPY95.6 billion• ROE

13.4%• Dividend Payout Ratio

37.8%• Dividends per share

JPY36.0• Net D/ E Ratio

JPY580 million

Initiatives in advanced technology development

Peace of mind and trust for society as a whole

Average rate of growth of Ordinary Income: 22.0%• Approx. 75% of Hulic’s properties are in Tokyo 23 wards

Leasing Business

Development Business(Intellectual capital and natural capital)• Debt /EBITDA• Formulation and implementation of the Hulic Guidelines

1.7 times*

3

achieving RE100*4■ Developing environmentally conscious and energy-savingbuildings■ Protecting the global environment by introducing

environmental technology

Peace of mind and trust for customers■ Buildings with particular emphasis on earthquakes and water

damage■ High energy-saving performance buildings■ Extending the lifespan of buildings■ Active development of businesses in response to demographic

change (aging) and social dynamics (increasing tourists)■ Workplace rich in diversity and inclusion

Non-financial achievements

systems that were developed with MIT

New and other
Businesses

Value-added BusinessStable financial base■ Workplace with work-life balance■ Providing career development support

Targets were achieved for;• CO emissions intensity• Technical measures applied to reduce
2(Financial capital)

A+ (positive)

construction waste(as of May 12, 2021)

ESG Initiatives

JPY486.4 billion
32.7%*3

Strong relationships with local communities,business partners(Social capital)• P ublic-private coordination in PPP business• C oordination and cooperation with management andconstruction companies• C orporate culture that fosters robust social contribution• Number of investments in renewable energy
facilities• Number of greening projects

to support business• Number of times the Sustainability Committee

Peace of mind and trust for investors■ Achieving stable financial growth■ Increased dividends every fiscal year since TSE First Section

listing■ Providing diverse forms of mutual communication

engaged in climate change monitoring

E

S

G

E (environmental)
initiatives

S (social) initiatives

G (governance)
initiatives

activities

External Evaluation• E quity:• E quity ratio:■ Achieving net zero CO2 emissions at Hulic’s properties, andPeace of mind and trust for employees• Introduction of natural ventilation and natural lighting• C redit rating:

SDGs contributed to

9.9 times*3

for Longer Life Building• Operational improvement using AI and IoT technologies

Value Created for Society

Social Initiatives

and for the continual improvement of corporate value

Corporate GovernanceFor the realization of a society full of safety, peace of mind, and trust,

Environmental Initiatives

Hulic Group’s Value Creation Process

Our Approach to Sustainability

Our Approach to Sustainability• Percentage of properties meeting Hulic's
earthquake-resistance standards• Usage rate of paid leaves• Ratio of female managers• Employment ratio of persons with disabilities• Number of BCP drills and inspections ofPeace of mind and trust for local
communities and business partners■ Contributing to positive long-term relationships■ Contributing to resolution of issues in local communities■ Providing broader social contribution activities

stockpiled food and goods*2 FY2020 results*1 As of December 31, 2020

Continue evolving for further progress*3 50% (JPY175 Bln) of all hybrid finance raised in 2018 and 2020combined (JPY350 Bln) was calculated as nominal equity.
*4 Renewable electricity 100%, or sourcing 100% of electricity needed forbusiness activities from renewable energy sources8

Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021

9

Materiality Assessment

Our major stakeholders and related materiality

Hulic has been providing properties with excellent safety, environmental features, and convenience that match the needs ofWe are committed to realizing a sustainable society by delivering environmental, social and economic value through interactive

the times and society.

communication with all stakeholders. Stakeholders who are particularly important for our sustainable growth and relevant materiality issues

As social issues and stakeholders' interests diversify, we will continue to address issues in society through assessing

are indicated below.

opportunities and risks in our businesses to achieve sustainable growth.
Classification

Major engagements(frequency in parentheses)

Key stakeholders

Materiality Assessment•

Identification of social
issues

Evaluation ofmateriality

Identification ofmateriality

Discussion and confirmationby the management

Analyze global social
issues* and ESG trends
to identify a wide range
of environmental, social,and economic issues

Quantify and evaluatesocial issues from theviewpoint of their impact
on stakeholders andHulic's management,
then prioritize

Assess and identify
materiality based on thetwo criteria: importanceto Hulic and to its
stakeholders

Identified materiality are
examined and confirmed
at management meeting

Tenants
Facility users

Customers

Building managementcompanies• Construction
companies• Building maintenancecontractors• Real estate agents• Financial Institutions•

Business
Partners

We will continue to review the identified materiality issues and implement effective initiatives and actions.

Regular meetings and businessinteraction (as required)• Disclosure of information in ourIntegrated Report and on our website(when appropriate)•

Disclosure of information through thecompany intranet (when appropriate)• President’s message (monthly)• Career development interviews (twice ayear or more)• President’s survey (twice a year)

Coexistence with business partners / local
communities• Response to changes in financial and realestate markets•

Materiality
relevant to all
stakeholders•

Materiality Identified•

We identified and selected issues of especially high materiality in terms

Identified materialityof their importance to Hulic and to our stakeholders.

Employees of the Hulic
Group

Employees

Striking a work-life balance andadvancement of talent development• Advancement of diversity and inclusion
and respect for human rights•

Actions for climatechange• Efficient use ofresources• Promotion of theecosystem protection
and restoration• Enhancement ofenvironmental
management system•

Actions for climate change

Materiality for our stakeholders

Relevance (high)E

Promotion of the ecosystem protection andrestoration••(classified by ESG)

Enhancement of environmental management system
Provision of safe and secure lifestyles

Local communities
NPOs and NGOs

Local
Communities•

Coexistence with business partners / local
communities

Provision of healthy and comfortable lifestyles
Coexistence with business partners / local
communities
Materiality for Hulic

S•

Response to aging society
Response to increasing number of tourists
Striking a work-life balance and advancement of
talent development

Promoting PPP business (whenappropriate)• National and local public• Initiatives for various awards andbodiesevaluations (when appropriate)• Payment of appropriate taxes (whenappropriate)

Administrative
Organizations

Advancement of diversity and inclusion and respectfor human rights•

Corporate governance and compliance
Response to changes in financial and real estatemarkets
Business continuity plans (BCPs)

Hulic Co., Ltd. Sustainability Book 2021

Briefings for individual investors andfor analysts and institutional investors(including overseas) (when appropriate)• Timely disclosure of information
through our website (whenappropriate)• Establishment of a contact point forinquiries (permanent)• Issuing a shareholder newsletter (twicea year)Coexistence with business partners / local
communities• Advancement of diversity and inclusion
and respect for human rights••

Practicing sustainable agricultureG* We are actively working
on environment-related
issues and business
continuity plans (BCPs),as they are materiality
issues that affect society
as a whole.

External Evaluation

Relevance (high)10Social contribution activities andvolunteer activities (when appropriate)• Participation in neighborhood
associations (when appropriate)• Engagement with communities inthe vicinity of our projects (whenappropriate)• Engagement with NPOs and NGOs
(when appropriate)•

Efficient use of resources

Identified
materiality

Environmental Initiatives

Step 4•

Shareholders,
Investors

Individual investors
Buy-and-hold investors

Social Initiatives

Step 3•

Corporate GovernanceStep 2•* SDGs, Global Risk Report
2019, etc.

Provision of safe and secure lifestyles
Provision of healthy and comfortable
lifestyles• Coexistence with business partners / local
communities• Response to aging society• Response to increasing number of tourists• Practicing sustainable agriculture•

Customer satisfaction survey (annually)• Disclosure of information in ourIntegrated Report and on our website(when appropriate)• Establishment of a contact point forinquiries (permanent)•

Step 1

Materiality of high relevance

Our Approach to Sustainability

Our Approach to Sustainability•

Corporate governance and compliance

Hulic Co., Ltd. Sustainability Book 2021

11

Opportunities and risks related to materiality and our actions
Major Opportunities and Risks (〇: opportunities, ●: risks)

Hulic’s Major Initiatives and Actions

SDGs contributed toInitiatives to achieve net zero CO2 emissions by 2030 and RE100 by 2024, and investment in renewable energy facilities
Information disclosure based on TCFD recommendations• Reducing CO emissions and promoting forest circulation by developing fireproof wooden buildings
2• Active adoption of environmentally friendly technologies (natural ventilation and natural lighting systems developed jointly with MIT, etc.)〇 Heightened need for buildings and properties equipped with higher energy efficiency and renewable energy● Need for additional measures to comply with environmental regulations. Increase of utility expenses due to a rise inenergy consumption for air conditioning•

Take actions for climatechangePromote efficient use ofresources〇 Heightened need for facilities utilizing resources effectively and recycling technologies● Risk that business activity may wane if resources were exhausted•

Promote the ecosystem
protection andrestoration〇 Heightened need for real estate development that is mindful of conserving local ecosystems● Residential environment may deteriorate if ecosystem in vicinity of property was damaged

Enhance environmental
management system〇 Creation of new business opportunities through taking actions against environmental issues as our core business● Risk of delayed action on environmental issues due to lack of environmental management system

Deliver safe and secure
lifestyles〇 Heightened need for properties that are safe and secure from natural disasters including earthquakes and flood damage● Rise of vacancy rate and decline of real estate value due to delayed actions on earthquake resistance techniques and
BCP preparedness

Deliver healthy andcomfortable lifestyles〇 Heightened need for comfortable, healthy and productive indoor environments● Reputational risk if health damage occurred in one of Hulic’s buildings

Coexistence withbusiness partners / local
communities〇 Better results are expected through synergies brought by aiming for mutual sustainable growth with our business
partners and local communities● Our reputation may suffer and relationships may deteriorate if we neglected local connections

Respond to aging society〇 Heightened need for nursing homes and hospitals with the aging of society and increase in number of healthier seniorcitizens● Hiring-related costs may rise and shortage of care workers may materialize as the population of young generation
declines

Respond to increasing
number of tourists〇 Expected rise in need for accommodation over the medium- to long-term● Risk of losing hotel guests if we failed to respond to diverse tourist needs

Strike a work-life balance
and advance talentdevelopment〇 Improvement of employee motivation and brand value in talent acquisition by enhancing workplace wellness featuresand enriching talent development program● Turnover rate may rise if support programs were insufficient for various work styles

Advance diversity andinclusion and respect forhuman rights〇 Improvement of operational quality and productivity can be achieved by respecting diversity and inclusion● Reputational risk may rise if we failed to respond to the need for diversity and inclusion•〇 Heightened need for low-cost, high-quality agricultural products at developing countries due to decline in Japan’s
farming population● Increase of investment costs in response to climate change and changing market conditions•

Practice sustainableagriculture

Further strengthen
corporate governanceand compliance〇 The effectiveness of operations is ensured and confidence in management improves when internal controls andcorporate governance work
● Non-compliance issue and deterioration of public confidence may occur due to lack of appropriate compliance culture
and system•

Adoption of longer life building design
3R (Reduce/Reuse/Recycle) initiative (adoption of PC construction method, reuse of construction materials, reduction of plastic waste)• Development and adoption of technologies to make effective use of resources (water-saving equipment, etc.)
•

•
•

•
•

Use of labelling systems including JHEP certification, etc.
Promotion of greening in development projects

Environmental Initiatives

Environment

Materiality

Our Approach to Sustainability

Our Approach to Sustainability

Oversight of the Board of Directors and setting up a corporate governance mechanism centered on the Sustainability Committee
Establishment and implementation of long-term vision for environment with targets for 2050

Develop and apply Hulic earthquake-resistance standards* to ensure the continuity of our tenants as well as the Company’s business
operations (Active adoption of earthquake-absorbing and earthquake-damping structures)• Comprehensive assessment of natural disaster risks at properties of all asset types•(Initiatives in business) Delivering a healthy and comfortable indoor environment, confirming specifications of facilities and interiormaterials in existing properties and those under development (use of interior finishes and equipment containing no hazardous
substances)• (Initiatives for employees) Promotion of health and productivity management (introduction of no-smoking hours, medical checkups on
par with examinations that exceed legal requirements, etc.)

Respond to changes infinancial and real estatemarkets〇 The Company's prompt response to market changes differentiates itself from competitors● Decline of real estate leasing revenue, rise of vacancy rate
● Higher funding costs

Enhance business
continuity plans (BCPs)〇 A sense of security for employees and their families may be delivered through taking stronger measures to ensure
safety in case of a disaster● Delayed resumption of business due to prolonged restoration of head office functions

Establishment of long-lasting good relationships through close and continuous mutual communications ((Tenants) Implementationof customer satisfaction surveys, delivering meticulous response to tenant needs (Business partners) Establishment of close
communications with management and construction companies (Local communities) Donating books to an elementary
school near the Hulic head office building, neighborhood cleanup activities, etc.)

Social Initiatives•(Initiatives in business) Promotion of senior citizen-related businesses (development of and investment in nursing homes)(Initiatives for talent acquisition) To secure a stable workforce, improve fringe benefits and rehire seniors who want to work
• (Social contribution) Establishment and operation of Hulic Scholarship Program for Training of Welfare Caretakers•••

Promotion of tourism-related business (owned/leased, or managed by the Company)
Responses to the diverse needs of tourists by offering a wide range of lodging options (owned/leased: a wide range of business-oriented
and luxury hotels in selected locations; Hulic-managed: primarily upscale hotels and luxury hot spring inns)

Corporate Governance•

Provision of supporting framework for employees during pregnancy, childcare and caring for the elderly, and raising awareness on related programs
Advancement of work style reform and thorough tracking of work hours as a corrective measure to change long working hour culture• Enhancement of support program for obtaining qualifications and in-house training program••

Raising awareness of diversity and inclusion, as well as developing various programs and systems
Initiatives to establish a talent management system that recognizes various work styles including work from home
• Employment of diverse human resources•

Promotion of agricultural business with a company in Vietnam
Strengthening of cooperation with and introduction of new technologies with domestic agricultural companies through investments• Information gathering on new crop varieties through joint ventures and implementation of trial cultivation of multiple varieties
throughout the year•

Appointment of external directors / auditors with knowledge in a variety of specialized fields
Establishment of a nomination committee and a compensation committee• Provision of compliance trainings for all employees / establishment of compliance hotlines••

External Evaluation

Corporate GovernanceSocial•(Real estate markets)
Maintenance and improvement of competitiveness through adding value to our properties by redevelopments, renovations, etc.
• Careful selection of investment projects / flexible rebalancing of portfolio mix(Financial markets)• Establishment of cooperative relationships with financial institutions, procurement policy (raise long-term funds at fixed rates)• Periodic analysis of market conditions, implementation of rigorous risk management through careful deliberation and reporting at in-house meetings•••

Formulation of BCP, implementation of drills once or more each year
Establishment of cooperative program with external parties to examine situations and implement response measures on Company
properties in times of disaster* Earthquake-resistance standards as specified by Hulic are where building performance can safeguard human life and enable continued use of the building with post-earthquake repair inthe event of an earthquake with a seismic intensity of seven.

12

Hulic Co., Ltd. Sustainability Book 2021

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13

Our Approach to Sustainability” have been assured by an independent assurance provider.

Major Non-Financial Information
CO2 Emissions, CO2 Emissions Intensity*1

95 TMT*-CO , 70.6 kg-CO /m2

Scope 2CO2 Emissions
Intensity

120
100

103

96.8
80

80

67

79.7

78.0

110

(kg-CO2/m2)(TJ)

Scope 1

140

3,500

Scope 2

120

3,000

95

100

2,500

80

2,000

60

60

1,500

40

40

1,000

20

500

0
2020 (FY)

0

20

115
blds

149
blds

161
blds

164
blds

2013

2017

2018

2019

0

156
blds

(Base year)*TMT: thousand metric tons

E

Total Energy(GJ/m2)
Consumption Intensity
2.0
1.7

1.5

2,192

1,587

1.8
1.6
1.2
600

0.6

611

149
blds

161
blds

164
blds

2013

2017

2018

2019

156
blds

0.2
0

0.0
2020 (FY)

7
blds

8
blds

9
blds

7
blds

6
blds

2016

2017

2018

2019

2020 (FY)% Properties Meeting Hulic's

S Earthquake-resistance Standards*3

420

100.0%
（%）

437

100.0

346

Ratio of Female Managers

S

100

100

100

100

100

23.9%
Target 20% by 2020

（%）
30.0

(Achieved in 2020)

23.9

25.0
20.2

80.0

18.5

20.0

300
200
100
0

S

51
blds

55
blds

58
blds

59
blds

55
blds

2016

2017

2018

2019

2020 (FY)

Usage Rate of Paid Leave

60.0

15.0

40.0

10.0

20.0

5.0

Target 70% or higher

80.0(Achieved in 2020)

78.3
71.6

77.0

78.5

12.3

0

0
2016

S

2017

2018

2019

2020 (FY)

2016

2017

2018

2019

2020 (FY)

Employment Ratio of
Persons with Disabilities

G in Board of Directors Meetings

2.34%

99%

Target 2.2% or higher

（%）
3.00

75.5

This page is intentionally left blank.
The Key Performance Indicators (KPIs) /Targets and Results start from the next page.

15.6

75.5%
（%）
100.0

502

524

300

0.4
115
blds

Target 100% (Achieved in 2020)

401

904

900

1.4

0.8

1,169

3

436

1,166

1,200

1.0

346thousand m
400

2,140

2,489

（metric ton）

(Base year)

Water Consumption(thousand m3)
500

1.6

1.6
1.7

70.6

72.1

502metric tons

Social Initiatives

Scope 1140

Waste Disposal*2

E(Achieved in 2020)

2.21

2.42

2.41

2.34

2.11

Participation Rate of Directors（%）Target
100

Corporate Governance(TMT-CO2)

G Governance

2,140TJ,1.6GJ/m2

2

2

S Social

80% or higher (Achieved in 2020)

96

97

98

99

99

2016

2017

2018

2019

2020 (FY)

80

2.00

60.0

60

40.0

40

1.00
20.0

20

0
2016

2017

2018

2019

2020 (FY)

0
2016

2017

2018

2019

2020 (FY)0External Evaluation

E

E Environment
Total Energy Consumption, Total
E Energy Consumption Intensity*1

Environmental Initiatives

Note: Figures marked with “

Our Approach to Sustainability

Non-financial Highlights*1 Until Integrated Report 2020, the boundary was: “office buildings with a total floor area of 3,000m or above (excluding buildings where bank branch is the sole tenant, as well as
sectional and shared ownership properties and real estate for sale).” From this year, we expanded the boundary to : “buildings in which the Company's ownership ratio of the total
floor area is 50% or more (excluding properties for residential use and real estate for sale).” This includes properties for which we do not have control of energy management. The
values for 2019 and years preceding were recalculated as reference values based on the new boundary. The target data is energy-related CO2 emissions. The unit calorific values and theCO2 emission factors are based on values in the Act on the Rational Use of Energy and the Act on Promotion of Global Warming Countermeasures. CO2 emissions intensity and energy
consumption intensity are calculated by dividing by the sum of the total floor area of the properties in the boundary. CO2 emissions and energy consumption of sectional and sharedownership properties are accounted according to Hulic’s share of ownership of the total floor area.
2*2 In FY2020, we calculated total waste disposal at certain properties in the boundary by using weight conversion factors based on actual measurements. As a result, we were able toimprove the precision of the weight of the total waste disposal by 169 metric tons compared with the weight calculated by using the conventional weight conversion factors.
*3 Hulic’s earthquake-resistance standards are where building performance can safeguard human life and enable continued use of the building with post-earthquake repair in the event ofan earthquake with a seismic intensity of 7.

14

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15

For financial information KPIs, please refer to the pages elaborating Medium- and Long-Term Management Plan (2020 to 2029).
Initiatives in the Medium- andClassified
Long-Term Management Plan,
by ESGby ESG

Hulic’s Materiality

Initiatives
Take actions for global warming
across the entire value chain of
Hulic's properties

Environment
SocialUnit(◎:achieved, ○:progressed,△:not progressed, ―:notsubject to assessment)

FY2016FY2017FY2018FY2019FY2020————70.6 /27%

kg-CO₂/m2／%

〇

0.5%

％

〇

property◎

metric ton

—

%

◎

thousand m3—

property◎

Electricity used in Hulic
Group business activities

—

—

—

—

Number of capital investments for renewable energy facilities: 3 or more each year

All completed properties
each year

3

4

6

4

Reduce waste at Hulic Group

Waste disposal: No numerical target (follow-up item)*4

6 buildings occupied by
the head offices of Hulicand its Group companies*5

524

611

1,166

904

Reduce waste in property
development

Percentage of technical measures (such as longer life design, etc.) *6 applied to reduce constructionwaste: 100% each year

All completed fixed assets
each year

—

—

—

—

Reduce water consumption at
Hulic’s properties

Water consumption (thousand m3): No numerical target (follow-up item) *4

55 major properties*7

401

436

420

437

Promote the ecosystem
protection and restoration

Promote greening

Number of greening projects*8: 1 or more each year

All completed properties
each year

1

5

9

3

Enhance environmental
management system

Implement environmentally friendly
management

Number of times the Sustainability Committee engaged in climate change monitoring: 1 or moreeach year

Hulic Co., Ltd.

—

—

—

—

1

time

◎

Number of Environmental Advisory Council meetings held: 1 or more each year

Hulic Co., Ltd.

—

—

—

1

1

time

◎

Deliver safe and secure
lifestyles

Enhance earthquake
Percentage of properties meeting Hulic's earthquake-resistance standards*9: 100% each year
countermeasures in Hulic’s properties

All completed properties
each year％◎

Deliver healthy andcomfortable lifestyles

Advance health and productivity
management

Percentage of employees who received medical checkup*10: 100% each year

Hulic Co., Ltd.

Number of customer satisfaction surveys: 1 or more each year

Promote efficient use ofresources

Use renewable energy and develop
new technologies

Respond to aging society

Promote senior citizen-related business Nursing homes Number of units: 5,000 in near future

Respond to increasing
number of tourists

Promote tourism-related business

Strike a work-life balance
and advance talentdevelopment

Enhance measures to support
nurturing the next generation

Further strengthen
corporate governance andcompliance

Accommodation facilities Number of rooms: 10,000 in near future

96.8

346
5 (8 properties inboundary)

100%

100%

100%

100%

％

◎

Hulic Group

1

1

1

1

1

time

◎

Hulic Group (including
properties sold/trusted to
REIT)

—

—

—

3,400

3,600

room

〇

—

—

—

8,200

8,000

room

〇

100％／
6 people100％／
0 people100％／
1 people100％／
7 people100％／
3 people％／ people◎◎

Hulic Co., Ltd.

Ratio of employees returning to work after childcare leaves: 100% per year

Hulic Co., Ltd.

100%

100%

100%

100%

100%

％

Hulic Co., Ltd.

71.6%

78.3%

77.0%

78.5%

75.5%

％

◎

Hulic Co., Ltd.

10

31

21

23

29

people—23.9%

Further increase programs foradvancing diversity and inclusion

Ratio of female managers: 2020; 20%, 2024; 25%, 2029; 30%

Hulic Co., Ltd.

12.3%

15.6%

18.5%

20.2%

Number of seminars provided by the Diversity Promotion Project Team: once each year

Hulic Co., Ltd.

1

1

1

1

Employment ratio of persons with disabilities: Maintaining the statutory employment ratio of 2.2%
or higher (The statutory employment ratio was 2.0% or higher in and before 2017, and 2.2% orhigher between 2018 to 2020.)

Hulic Group*13

2.21%

2.11%

2.41%

2.42%

Compliance

100% (8 properties
in boundary)100%

Number of additionally obtained qualifications by employees*12: No numerical target (follow-up item)

Corporate governance502

100% (2 properties 100% (6 properties 100% (11 properties 100％ (4 properties 100% (8 properties
in boundary)in boundary)in boundary)in boundary)in boundary)

Advance talent development

Increase employment of persons
with disabilities

3 (8 properties inboundary)

Usage rate of childcare leaves / Number of people: 100% of eligible female employees /1 male
employee or more each year

Encourage the planned use of paid leave Usage rate of paid leaves*11: 70% or higher each year

Practice sustainable agriculture Enhance agribusinessCorporate
Governance（FY2013)

Assessment

Results

Base Year

RE100 achievement rate*3: 4% in 2021, 30% in 2022, 35% in 2023, 70% in 2024, 100% in 2025

Promote diversity andinclusion and respect forhuman rights

Implement balanced managementwith attention to group governanceCoverage

156 major properties*2

Coexistence with business
Improve customer satisfaction
partners / local communities

Promote business operations withparticular emphasis on improving
earthquake resistance to build amore resilient society(If no fiscal year is given for a target, the target remains effective every year)

CO2 emission reduction target*1: Reduce CO2 emissions (The base year: 2013) 40% by 2025, 45％
by 2030, 100% by 2050

Take actions for climatechangePromote carbon-free society
initiatives through building
operations

KPIs / Short-term Targets, Medium- to Long-Term Targets

％

◎

time

◎

2.34％

％

◎

1※14

Production area (ha): 15ha by 2025

Hulic Group

ー

ー

ー

11

10

hectare〇Participation rate in Board of Directors meetings: 80% or higher each year

Hulic Co., Ltd.

96％

97％

98％

99％

99%

%

◎

Number of effectiveness assessment of the Board of Directors: once each year

Hulic Co., Ltd.

1

Number of compliance training conducted: Five times each year (4 times for employees and once for
Hulic Co., Ltd.
officers)―
5 (4 employees,
1 officer)―
5 (4 employees,
1 officer)―
5 (4 employees,
1 officer)

time

◎

5 (4 employees,
1 officer)―

5 (4 employees,
1 officer)

time

◎

Respond to changes in financial
Risk management
and real estate markets

Number of Risk Management Committee and Fund and ALM Committee meetings: 4 times each year,
respectively

Hulic Co., Ltd.

—

—

—

4／13

4／22

time

◎

Enhance business continuity
plans (BCPs)

Number of BCP drills and inspections of stockpiled food and goods: 1 or more each year

Hulic Group

1

1

1

1

1

time

◎

Risk management*1 Based on intensity (level) of CO2 emissions.
*2 The boundary of properties is the buildings in which the Company's ownership ratio of the total floor area is 50% or more (excluding properties for residential use and real estate for sale).
This includes properties for which we do not have control of energy management. Please refer to page 15 for the number of target properties.

*7 The boundary is properties with a total floor area of 3,000 m2 or more, excluding buildings where bank branch is the sole tenant, as well as sectional and shared ownership properties and realestate for sale. Please refer to page 15 for the number of target properties.
*8 The number of completed properties in each year among those imposed with greening obligation (excludes real estate for sale).

*3 The RE100 achievement rate is calculated by dividing the amount of power generated by Hulic-owned solar photovoltaic equipment for one year by the total amount of electricity used at the
Hulic head office building and on the floors occupied by Group companies in one year.

*9 Earthquake-resistance standards as specified by Hulic are where building performance can safeguard human life and enable continued use of the building with post-earthquake repair in theevent of an earthquake with a seismic intensity of 7.

*4 To be comprehensive when making calculations for waste disposal and water consumption, we are preparing basic data to change the boundaries for aggregation of this data. As 2020 is
the transition period for this change, we have not set any quantitative targets. In FY2020, we calculated total waste disposal at certain properties in the boundary by using weight conversion
factors based on actual measurements. As a result, we were able to improve the precision of the weight of the total waste disposal by 169 metric tons compared with the weight calculated
by using the conventional weight conversion factors.

*10 The executive officers, employees (including seconded staff) and full-time contract staff who were with the Company at the time of application of medical checkup and as of December 31,
2020 were counted (excluding personnel who were on leave).

*5 The boundary is Hulic’s head office building and buildings where the head offices of Group companies are located. Please refer to page 15 for the number of target properties.

*12 The counted qualifications were those which the Company recommends employees to obtain.

*6 The percentage of properties completed in the given year that used technologies and measures that contributed to a reduction in waste as well as raw materials and other resources based on
the Hulic Guidelines for Longer Life.

*13 Limited to Hulic Co., Ltd. and subsidiary companies that have been certified as special subsidiary companies under the Act on Employment Promotion etc. of Persons with Disabilities. The
employment ratio for persons with disabilities is as of June 1st of each year.

Environmental Initiatives

Non-financial information KPIs / targets and results, classified by ESG, were shown below.

Social Initiatives(KPIs) / targets, we are addressing to achieve both financial and non-financial aspects with the same amount of importance.

Figures marked with “ ” have been assured by an independent assurance provider. For FY2020 results, we received assurance from an independent assurance
provider concerning the following eight items: total energy consumption, CO2 emissions (aggregate of Scope 1 and Scope 2) and CO2 emissions intensity, numberof greening projects, water consumption, waste disposal, employment ratio of persons with disabilities, usage rate of paid leave, and percentage of employees
who received medical checkups. We will continue to disclose information on the progress of our sustainability initiatives to the stakeholders while strive to improvedisclosure quality using PDCA cycle.
Results for KPIs are shown from the year they were set as KPIs and indicated as a “– (dash)” for earlier years.

Corporate GovernanceWe aim to increase our corporate value and solve social issues simultaneously. Therefore, with respect to key performance indicators

External Evaluation

Key Performance Indicators (KPIs) /Targets and Results

Our Approach to Sustainability

Our Approach to Sustainability*11 The usage rate of paid leave is calculated by dividing the number of days of paid leave used in the year by the number of days of paid leave granted in the year. The number of days carriedover in the year are excluded.

*14 A video training session was held in lieu of in-person seminar session to prevent the spread of COVID-19.

16

Hulic Co., Ltd. Sustainability Book 2021

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17

ESG

Hulic contributes to achieving a sustainable society by
executing environmentally friendly management aswell as by addressing global environmental issues.

Our Approach to Sustainability

Environmental Initiatives

Collaboration with External Organizations
Hulic implements environmental initiatives focused on climatechange while actively collaborating with relevant government
agencies and industry groups and engaging in partnerships withNPOs and other private organizations.
There are no discrepancies or conflicts between each industry
group and policies or the direction of our environmental efforts.

Fuyo Kondankai Business Council

The Fuyo Kondankai Business Council holds regular meetings to introduce
environmental technologies, presents lectures by experts and engages in otherefforts aimed at creating and expanding environmental business opportunities.

Wood Change Network

Hulic engages in ongoing lumber promotion activities through participation in
Wood Change Network, a networking gathering sponsored by Japan’s Forestry
Agency to promote the use of lumber in residential and other construction
projects.

Japan Economic Research InstituteThis private research institute publishes data and makes recommendations
based on proprietary research into economics and management issues. Hulic
participates in the Carbon Neutral Committee, where we engage in pragmatic
discussions regarding private-sector support for the realization of carbon
neutrality in 2050 and requests for the government.

Japan Climate Leaders’ Partnership(JCLP)

Viewing preparations for the transition to a carbon-free society as an opportunity
for corporate development, this voluntary organization shares information on
the latest trends in Japan and overseas while recommending government policy
proposals and disseminating information throughout society from a corporate
perspective.

TCFD Consortium

Hulic announced support for the TCFD recommendations and began disclosing
information in line with them. We also participate in the TCFD Consortium
to promote the unified efforts of companies, financial institutions and otherorganizations that endorse the TCFD recommendations.

Hulic has formulated the Environmental Policy embodied in our Sustainability Vision and is executing environmentally friendly management

Consideration for Sustainability in Real Estate Development and Investment
Hulic is committed not only to sustainable real estate investment

impact on the surrounding living environment so that we can gainin accordance with the Corporate Philosophy and Sustainability

their understanding.

Vision, but has also formulated regulations on managing real estate

When outsourcing design and project management or orderingpurchases and development.

construction work, we generally hire companies with the solid

When conducting an investigation of the acquisition of real estate,technologies, credibility, and track records. In addition, when

Hulic always carries out statutory investigations and conduct

reconstructing and developing real estate, we issue instructions

studies on natural environment, specified hazardous substances,on environmentally friendly designs and check whether

and the presence of underground obstacles. In negotiations withenvironmentally friendly designs are adopted at the basic designingcommunities, we provide explanations to those who live nearby

stage, implemental designing stage, and completion stage.

after conducting sufficient investigations and simulations on the18

Hulic Co., Ltd. Sustainability Book 2021

Social Initiatives

The Real Estate Companies
Association of JapanThe Real Estate Companies Association of Japan (RECAJ) is an organization
comprising companies engaged in urban development and the creationof appealing cityscapes. RECAJ contributes to the SDGs and is engaged inenvironmental initiatives for the real estate industry. As a member of the RECAJ
Environmental Committee, Hulic regularly participates in initiatives related toeliminating environmental degradation.

Hulic Environmental Policy

to work towards solving various issues in the global environment. The following items are clearly stated in our Environmental Policy.

Activity Details

Corporate GovernanceGroup Name

External Evaluation

Fundamental
Approach

Hulic will implement environmentally friendly management based on the Hulic
Environmental Policy and work to resolve issues associated with conservation of the
global environment.

Environmental Initiatives

Basic Policy for Environment

Hulic Co., Ltd. Sustainability Book 2021

19

Environmental Initiatives

Long-term Vision for the Environment
2050.

Sustainability Vision and is executing environmentally friendly   We have decided to set the long-term vision for environment

management. We aim to continue sustainable growth throughat the center of our environment related initiatives consideringbusiness activities, with analyzing and evaluating climate change

the time frame referred to in the Paris Agreement which wasdeveloping solar photovoltaic equipment that does

mitigation and adaptation, and we are also implementing initiatives

adopted in 2015 at COP21 (The 21st Session of the Conference of

not use the FIT system and small hydroelectric plants.

to realize a carbon-free, recycling-oriented society envisioned in

the Parties to the United Nations (UN) Framework Convention on

Hulic's Long-term Vision for the Environment with targets for

Climate Change).

Our Approach to Sustainability

Example of Specific Initiatives for Achieving the Vision

Hulic has formulated the Environmental Policy embodied in our● A chieving net zero CO2 emissions and RE100 :Forwarded target years for each, respectively, and● Longer life design buildings : we are reducing waste

by making our longer life design of buildings that canaccommodate tenant needs flexibly and can be usedsafely over a 100 years as standard specifications inLong-term Vision for the Environment

Natural ventilation (HULIC Head Office Building)Natural lighting louvers and LED lighting(HULIC Head Office Building)all developments and reconstructions.
developing fire-resistant wooden buildings using

carbon-free and recycling-oriented society in 2050.

timber that requires less energy for manufacturing andprocessing as well as contributes in fixing carbon.

As a real estate developer, we believe that Hulic can offer value to society by putting our environmental effort into reducing CO2 emissions,● Environmentally friendly technologies : we havedeveloped unique natural ventilation and naturalusing resources efficiently, and reducing waste.

lighting systems (louvers) in collaboration with theRoadmap of Initiatives for Achieving the Vision

Massachusetts Institute of Technology. We have

To realize a carbon-free society, we are accelerating our initiatives to achieve net zero CO2 emissions and RE100 by bringing forward target

also obtained patents for and are commercializing

years for each, respectively.

photovoltaic panels, which were jointly developed

●

2021

2025

2030

1

A
 nnounce support for the TCFD* recommendations and start disclosing informationin line with them in 2021

General●Adoption of environmentally friendly technologies to properties ownedH armonization of business activities and environmental initiatives●

Join RE100

2050

(FY)

with another company, and a thin-layered wall
Japan's first 12-story
wooden fireproof
commercial building(Ginza, Tokyo) Photo
credit to the Kengo
Kuma and Associates

greening system, natural lighting films etc.

Realization of acarbon-free andrecycle-based society●

The solar photovoltaic equipment that does not use
the FIT system (Saitama Pref.)1 Years Ahead of Initial Plan
Achieve RE100*2 by 2024

Environmental Compliance

Decarbonization

●

●

KPIs

●

●

Achieve net zero CO2emissions by 2030

P romote energy conservation and utilize renewable and unused energy sources

Circulareconomy20 Years Ahead of
Initial PlanC
 omplete fireproof wooden buildingT ree planting

the subsequent formulation of environmental policies.

regulations related to the environment, including waste and

There were no

soil pollution, the Hulic Group communicates to all employees

violations of

information on the latest trends in environmental laws andenvironmental laws

regulations and legal systems, as well as our sustainability-

and regulations inrelated initiatives and actions including environment throughthe last five years

the intranet.

(2016 ~ 2020).

   We use opinions raised during the compliance training inT echnical measures to reduce waste and resource inputs (develop longer life buildings) and initiatives to save water

CO2 emission reduction
target (compared with 2013)

27% reduction

Reduce by 40%

Reduce by 45%

initial plans.
*1 TCFD is an abbreviation for The Task Force on Climate-related Financial Disclosures, which was created by the Financial Stability Board (FSB) at the request of the G20, and makes
recommendations on climate change-related disclosures to companies and other organizations.
*2 RE100 is an abbreviation of Renewable Electricity 100% and is an international initiative in which member companies aim to use 100% renewable sources for the energy required fortheir business activities.
*3 A feed-in tariff (FIT) system for electricity that requires utility companies to purchase electricity generated using renewable sources for a certain period of time at a price specified by thenational government.
FIT electricity is not considered renewable energy as a portion of the cost of the electricity purchased by a utility company is added to the consumer’s bill so the tax payer must bear someof the costs. Therefore, achieving the 100% goal with FIT electricity is not considered RE100 by definition.

Hulic Co., Ltd. Sustainability Book 2021

Major Environmental Laws and Regulations

Reduce by 100%

We are revising our related KPIs as we have brought forward the target years of net zero CO2 emissions and RE100, respectively from our20

With the aim of thoroughly complying with laws andCorporate GovernanceS tart to develop solar photovoltaic equipment that does not
use the FIT system*3, and start to supply renewable energy
sourced electricity to head office building and buildings
housing group companies●D eclared goal of net zero CO2 emissions by 2050
●S
 tart to develop small hydroelectric plants●•

Basic Environment Act•

Act on Promotion of Global Warming Countermeasures•

Act on the Rational Use of Energy (Energy Conservation Act)•

Construction Waste Recycling Act•

Air Pollution Control Act••

Noise Regulation Act•

Vibration Regulation Act

Act on Confirmation, etc. of Release Amounts of Specific Chemical
Substances in the Environment and Promotion of Improvements to
the Management Thereof•

Soil Contamination Countermeasures Act

Basic Law for Establishing the Recycling-based Society••

Waste Management and Public Cleaning Act

Industrial Safety and Health Act

•

•

•

Act on the Promotion of Effective Utilization of Resources

Act on Special Measures concerning the Proper Treatment of
Polychlorinated Biphenyl Waste, etc.

•

Act on the Promotion of Sorted Collection and Recycling ofContainers and Packaging (Containers/Packaging Recycling Act)

Hulic Co., Ltd. Sustainability Book 2021

External Evaluation

2020

Photovoltaic panels (HULIC Head Office Building)Social Initiatives

Hulic executes environmentally friendly management to realize an ideal society ofEnvironmental Initiatives●F ireproof hybrid wooden buildings : we have been

21

Environmental Management System（EMS）

Adoption of Energy-saving Technologies

The Group has established a unique environmental management

Hulic has actively worked on the promotion of energy savings,

new energy-saving technologies

use of renewable or unused energies, and greening promotion,and improvements of existing

etc. as part of measures for climate change in engaging in new

performance. In addition, Hulic

development and managing existing buildings owned by Hulic.

will conduct its own researchSpecifically, we use high-efficiency, air conditioning systems, total

and development on energy-

heat exchangers heat pump systems that use unused energy,saving technologies.

Environmental Management System (EMS)

strengthened our governance mechanism centered on Board of
Director oversight and the Sustainability Committee with regard toclimate change based on TCFD recommendations.

Plan

Board of Directors

Business Planning andManagement Department

・Oversee initiatives
・Instruct reviews andimprovements* There is no office that has obtained certification for an environmental management
system such as ISO 14001 or EMAS in the Group.

・Analyze and evaluate thecurrent status
・Formulate environmental
policies and measures
・Manage climate changerisks and opportunities
・Set KPIs

features of properties. In addition, we will proactively introduce

Measures to Enhance the Effectiveness of Energy Conservation Promotion Activities

Continual Improvement

Promoting the Visualization of Energy• Environmental risk mitigation and adaptation• Compliance with applicable laws and regulations• Energy and resource conservation• KPI management• Environmental reporting and communications

Check

Do

Sustainability Committee
Risk Management
Committee
Environmental
Advisory Council

Real Estate BusinessGroup companies Division

・Review and evaluate
initiatives regularly
・Evaluate climate change’s
impact on business andreflect in strategies
・Evaluate progress andperformance of KPIs

and cogeneration systems/storage batteries depending on the・Implement business plans
with consideration for the
global environment
・Adopt environmentallyfriendly and energy-saving
technologies
・Develop and use renewableenergy・Collaborate with business
partners, etc.
・Respond to environmental
emergencies (BCPs)

Hulic prepares a basic unit chart on the amount of energy usedconsumption for each individual year. The basic unit chart alsoannually per square meter at each of its company-owned leasecalculates and evaluates electricity, gas, heat (steam, hot water,buildings in order to analyze and understand energy sourced fromcold water) and water usage for each tenant and facility. Going

outside each building is being used. The basic unit chart contains

forward, measures will be considered for how to utilize this data

data for each year from fiscal year 2010, which makes it possible

in more energy efficiency renovations and improved building

to evaluate current conditions and carry out more evaluates the

management practices.

supply of electricity conservation efforts by measuring energy

Introduction of Energy-saving Measures in Cooperation with Tenants
Based on the building’s electricity consumption for one year,

through more efficient operations, and implement small-scale

adjustments will be made with each tenant, then we examine

renovations as needed.

equipment settings and propose utility cost reduction measures

Efforts to Reduce the Amount of Paper Use in Offices
PLAN: Planning and Promotion of Environmental Issues

Environmental Initiatives

Act

constantly improving it through a PDCA cycle. In 2020, we haveWith an eye to increase awareness of paper consumption reduction

Paper consumption per person (Hulic Head Office)inside the Company, we are calling on employees through theWe will formulate response policies and measures based on our recognition of current environmental conditions, including the impact ofcompany intranet to reduce paper consumption, promoting

climate change on Hulic's businesses. Further, we will set KPIs including but not limited to CO2 reduction targets and manage the results.

both-side printing and intensive printing, and implementing theSocial Initiatives

system (EMS)* based on the Hulic Environmental Policy and is

Our Approach to Sustainability

Environmental Initiatives

electronic circulation of documents and an electronic approvalsystem as required.

DO: Operations

Energy Conservation Promotion Activities for
Our Leased Buildings

efficiency, while transitioning to a paperless business flows in all

Corporate Governancecollaboration with the Group companies, business partners, etc.

Additionally, we are promoting digitalization to improve work

Organizational Diagram for Facility Management
on Energy Conservation

operations and meetings. We believe this will result in significantly
reduced paper usage going forward.

Activities to Promote Energy-saving Cooperation with
Building Management Companies
Hulic has created an energy management standard, which it shares

CHECK: Confirmation and Inspection

with property management companies in charge of its properties,

Confirmation and inspection of initiatives through monitoringin order to rigorously manage the progress of energy conservation

and assessment by both in-house and external parties in order for

activities. The energy management standard was created toconstant improvement of EMS.

promote more efficient energy saving activities at buildings, and it

WEB

Establishment of the Sustainability Committee
https://www.hulic.co.jp/en/sustainability/about/philosophy.html#anc9
Risk Management Structure
https://www.hulic.co.jp/en/sustainability/governance/risk_management.
html#anc1

Environmental Advisory Council
https://www.hulic.co.jp/en/sustainability/ecology/tcfd/governance.html#anc5

serves as a guideline for management, measurement, recording,maintenance, and inspections related to the rationalization ofenergy use based on building type and size. This standard applies
to all forms of energy, including electricity, gas, and water (waterand sewerage).

ACTION: Review and Improve
Continual improvements and oversight by the Board of Directors on environmental initiatives reflecting the results of in-house and external

External Evaluation

Execute business plans in line with CSR Procurement Policy inconfirmation and inspection.

22

Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021

23

Environmental Awareness and Education for Employees

Environmental Accounting

We work on environmental education and awareness activities in order to enable each employee to voluntarily act toward the improvement

We have introduced environmental accounting since 2011, andwhich we commit to execute environmentally friendly managementof environmental performance.

have been disclosing the result on our website in order to executeto realize an ideal society of carbon-free and recycling-oriented

efficient and effective environmental conservation activities bysociety. For promoting environmental initiatives efficiently andunderstanding the costs to protect the environment in business

effectively, Hulic strives to quantitatively evaluate effects andactivities, as well as the effects of these activities.

disclose costs for environmental conservation in business activities   Hulic has formulated Long-term Vision for the Environment inand results through these activities.

The Hulic Group participates every year in the Tokyo Green Ship

weeds and shrubs at the foots of mountains. These activities, with

Action, organized by the Bureau of Environment of the Tokyo

participation by many employees every year, provide them good

Metropolitan Government, to raise environmental awareness, andopportunities to learn about biodiversity.

engages in volunteer activities such as rice harvesting and trimming

Environmental Accounting Report for FY2020
Reporting Period
Scope

From January 1, 2020 to December 31, 2020
156 key buildings of Hulic Co., Ltd.

Calculation method

Standards for calculation

Calculated based on “Environmental Accounting Guidelines 2005 (the Ministry of Environment)”
Company expenditures on depreciable assets for the purpose of environmental conservation. “Cost amounts”
are portions of the Company's overall expenses and are the amounts used for the purpose of environmental
conservation. Cost amounts do not include depreciation costs.

Satoyama Conservation Activities: rice harvesting experience, trimming of shrubs and weeds

Environmental Initiatives

Environmental Education

Our Approach to Sustainability

Environmental Initiatives(unit: thousand yen)

Environmental Conservation Cost
development and environmental efforts such as fireproof wooden

joining the company includes detailed explanations regarding theconstruction initiatives, all in an effort to inculcate awareness ofdevelopment of renewable energy equipment, the introduction

the environment as soon as new employees are hired.

of longer life designs and eco-friendly technologies into building

3,973,502

13,114(1) Business area cost(1)-1 Pollution prevention cost0(1)-2 Global environmental
Breakdown
conservation cost

3,973,502(1)-3 Resource recycling cost0

Afforestation Training
Hulic's policy is to plant trees used for fireproof wooden buildings

Cost
Amounts

Contents of Major Activities

0 *1
Energy saving design introduced with reconstruction of
Hulic's buildings/Renovation of Hulic's buildings for energy
11,535conservation/Maintenance cost for renewable energy
generating equipment
1,580 Recycling documents(2) Upstream/downstream cost0(3) Administration cost

026,632

carbon-free society. To this end, Hulic conducts afforestation(4) R&D cost

0

13,658 Development of energy-saving systems

training so that employees experience the forest lifecycle. This

(5) Social activity cost0

1,000 Satoyama conservation activities, etc.

activity provides opportunities to think about environmental(6) Environmental remediation costprotection and communicate across the entire Company.

Total

as an initiative promoting forest regeneration to realize a recyclingoriented society and reductions in CO2 emissions targeting a(In FY2021, afforestation training was cancelled due to COVID-19.)

Social Initiatives

Training for newly hired recently graduated employees upon

Investment
Amounts

286 Cost for recycling toner cartridges

003,973,502

54,691

Plant/vegetation maintenance costs/Preparation of various
reports/ Ads related to Hulic's environmental efforts

Corporate GovernanceCategories*1 Pursuant to relevant laws and regulations, appropriate effluent treatment and measurement of gas emission were conducted, but costs were not calculated.

Environmental Load Index

Effects of Environmental Conservation
Contents of Effects

FY20202

FY2019Difference

Total energy consumption intensity (Scope 1, 2)(GJ/m )

1.6

1.6

0.0

CO2 emissions intensity (Scope 1, 2)(kg-CO2/m2)

70.6

72.1

-1.5

Water consumption intensity (m3/m2)

0.6

0.6

0.0

Waste disposal intensity (kg/m2)

10.1

9.5

0.6

3,258,582

3,033,813

224,769

Renewable energy generated by solar photovoltaic
equipment (kWh/p.a.)* Occupancy rate is not taken into account in the calculation of basic unit per floor area.

* The unit calorific values and the CO2 emission factors are based on values in the Act on the Rational Use of Energy and the Act on Promotion of Global Warming Countermeasures.
* The number of properties in the boundary were: Total energy consumption and CO2 emissions intensity; 2019; 164 and 2020; 156
Water consumption intensity: 2019; 59 and 2020; 55
Waste disposal intensity: Hulic head office building

24

Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021

External Evaluation

New Hire Training

25

Principles” (“SLB Principles”) published by The International   For the issuance of the Bonds, the Company applied for “theCapital Market Association (“ICMA”) (as of the date of thisPublic Offering for Model Cases in the Model Creation Projects onannouncement).

Sustainability Linked Loans 2020” launched by the Ministry of the   In February 2021, we received the silver prize as well as theEnvironment (the “Public Offering”) and the Bonds were highly

Minister of the Environment award in the issuer category of theevaluated for the modeling and pioneering features and selected

second ESG Finance Award Japan hosted by the Ministry of theas the first model case in the Public Offering.

Environment for this bond issuance.

   The Bonds are the world’s first publicly offered Sustainability-

Third-party verification
The compliance of the bonds with the Ministry of Environment
Guidelines and SLB Principles has been confirmed by the Ministryof Environment and its contractors (JCR, E&ES).

WEB

Post-Issuance Verification Report (Japanese, issued in August 2021)
https://www.hulic.co.jp/sustainability/ecology/management/pdf/report_202108.pdf

10th series unsecured subordinated bonds(with an inter-bond pari passu clause, Sustainability-Linked Bonds)

Issue amount
SPTs linked with theissue terms

Interest rate

Start ofgeneration

Location

October 2020

Kazo City 1, Saitama Prefecture

January 2021

Omiya Town, Wakaba Ward, Chiba Prefecture

April 2021

Gotomaki, Tamura City, Fukushima Prefecture

April 2021

Meishizawa, Tamura City, Fukushima Prefecture

June 2021

Kikutamachi, Koriyama City, Fukushima Prefecture

June 2021

Kazo City 2, Saitama Prefecture

June 2021

Amimachi, Inashiki, Ibaraki Prefecture

Solar power generation results and RE100 rate ofprogress
Solar power generation results

RE100 rate of progress(as of the end of December 2020)(as of the end of December 2020)*

283.75MWh

0.9%* RE100 rate of progress is reported to CDP, and the calculation method is as follows.
the amount of power generated by Hulic-owned solar photovoltaic equipment for one
year ÷ the total amount of electricity used at the Hulic head office building and on thefloors occupied by Group companies in one year

Total power generation capacity of solar photovoltaic equipment that started generating power in FY2020:1.3MW
Pre-issuance report (Japanese)
https://www.hulic.co.jp/sustainability/ecology/management/pdf/report_202008.pdf

Overview of the Bonds

Maturity

List of solar photovoltaic equipment developed by
the Company

2. Completion of Japan's first 12-story fire-resistant wooden commercial facility in the Ginza
8-chome Development Plan
Since 2018, Hulic has been developing fire-resistant wooden

planting new trees after cutting down old trees to use as buildingbuildings using timber that requires less energy for manufacturing

materials. This initiative for fire-resistant wooden buildings helps

and processing, in response to Japan Forestry Agency’s effort topromote forest circulation, which in turn leads to reduction in CO2.

expand use of wood under a series of initiatives to reduce overall

Hulic is developing Japan’s first 12-story, fire-resistant wooden

CO2 emissions. Trees absorb CO2 in the air and provide a carbon

commercial facility (hybrid construction combining mainly domestic

10 years

dioxide fixing solution as they grow, so an abundance of trees inwooden and steel structures) in Ginza, one of its focus areas.

10 billion yen

the nation’s land can help cut down CO2 levels. Considering trees

The facility is scheduled forare losing ability to absorb CO2 as they get older, it is possible

completion in October 2021.

①Achievement of RE100 by 2025
②Completion of Japan's first 12-story fire-resistant wooden commercial facility in the Ginza 8-chome Development Plan by 2025

to maintain a certain number of young, CO2 absorbing trees by

An interest rate of 0.44% per annum will be applied during the period from the day immediately following October 15, 2020
through October 15, 2026.
A coupon step-up of 0.10% is triggered if any of the SPTs linked with the issue terms has not been achieved as of August 31, 2026

Forest Circulation

Progress against the target

Under Construction※The Bonds set out additional SPTs subject to monitoring

Pricing date

October 9, 2020

Issue date

October 15, 2020

Maturity date

October 15, 2030

Credit rating

A+ (Japan Credit Rating Agency Ltd., “JCR”)

As of August 2021

Ginza 8-chome Development Plan
(fire-resistant commercial building)

SPTs Progress against targets
1. Achieving the RE100 Goal
Having launched the solar power generation business in 2012,

make Hulic Japan’s first company to entirely cover its power usage

Hulic started developing photovoltaic equipment that does notby this self-supply initiative, ensuring it achieves the goal set out

apply the feed-in tariff (FIT) system in 2020. Hulic had been aiming

for RE100 companies. Under this initiative, Hulic expects to be able

to achieve 100% renewable energy (the goal of RE100) by 2025

to use renewable energy at a price equivalent to that of electricity

by developing solar power generation system that covers thegenerated by fossil fuels. Success in achieving the RE100 goal

power consumption of the Group, including its subsidiaries, but

through the development of the non-FIT solar power generation

The list of investors that have committed to investing in the Bonds

now we are aiming to achieve it ahead of schedule by 2024. The

will contribute extensively to Hulic’s CO2 reduction plan as well as

is included in the press release.

electricity generated by the solar equipment will be supplied toensure that Hulic is taking a step forward to realize a sustainableeach building through Hulic Property Solution Co., Ltd., a Groupsociety (carbon-free and recycling-oriented society) under its long-company, which acts as a power producer and supplier. This willterm vision for the environment.

Asset type

Commercial facility

Location

Ginza 8-chome (four-minute walkfrom Shinbashi Station)

Structure

Hybrid construction combining
wooden and steel structure

No. of floors

12 floors above ground, 1 below

Site area

251.98m2(plan)

Total floor area

2,456.54m2(plan)

Design andconstruction

Takenaka Corporation

Exterior design
supervisor

Kengo Kuma and Associates

Completion

October 2021 (plan)

List of investors that have committed to investing in the Bonds
WEB

Press release (English)
https://hulic.s.digitaldesk.jp/en/sustainability/ecology/management/pdf/
release_en_20201009.pdf

Received the silver prize in the second ESG Finance Award JapanIn February 2021, we received the silver prize as well as the Minister of the Environment award in the issuer category of the second ESG
Finance Award Japan hosted by the Ministry of the Environment for this bond issuance.

26

Hulic Co., Ltd. Sustainability Book 2021

Social Initiatives

Linked Bonds that align with the “Sustainability Linked Bond

Bonds”) in October 15,2020.

Corporate Governance

Hulic has issued Japan’s first Sustainability-Linked Bonds (“theEnvironmental Initiatives

Progress against the target

Hulic Co., Ltd. Sustainability Book 2021

External Evaluation

Sustainability-Linked Bonds

Our Approach to Sustainability

Environmental Initiatives

27

Environmental Initiatives

power sources).

amount of power generated fluctuates depending on the weather,

Note that small hydroelectric plants will not be used as renewable

Vision for the Environment, we act to combat climate change by pursuing initiatives

we are developing and operating our own small hydroelectric

power sources as at 2030 since they use the FIT system. We plan toincluding net zero CO2 emissions by 2030 and achieving RE100 by 2024.

plants that can generate electricity both day and night regardless

supply renewable energy to its properties after the FIT period hasof the weather from long-term perspective with the goal ofended (20 years hence).

developing energy resilience (a stable power supply from varied

CO2 emission reduction target*1 Excludes single-tenant lease properties, residential properties and unmanaged shared properties for which we do not manage energy, and real estate for sale.
*2 A feed-in tariff (FIT) system for electricity that requires utility companies to purchase electricity generated using renewable sources for a certain period of time at a price specified by thenational government.
FIT electricity is not considered renewable energy as a portion of the cost of the electricity purchased by a utility company is added to the consumer’s bill so the tax payer must bear someof the costs. Therefore, achieving the 100% goal with FIT electricity is not considered RE100 by definition.

For CO2 emission reduction plans and results, refer to page 20 for the long-term environmental vision.

*3 A long-term contract scheme under which a business agrees to purchase electricity directly from an energy generator.

Setting Specific Climate Change Targets (KPIs)

Mechanism facilitating stable energy supplies utilizing multiple power sources (image)issue (materiality).

The 21st session of the Conference of the Parties to the UnitedEnvironmental Initiatives

Fundamental
Approach

As solar power does not generate electricity at night and theTargeting to realize a carbon-free society which is envisioned in Hulic’s Long-term

Nations Framework Convention on Climate Change (COP21), heldin December 2015 in Paris, adopted the Paris Agreement as a new

KPIs are shown below.

international framework for reducing greenhouse gas emissions• CO2emission reduction target*1: Reduce CO2emissions (The baseafter 2020. The conditions surrounding climate change are time

year: 2013) 40% by 2025, 45% by 2030, 100% by 2050
• RE100 achievement rate* : 4% in 2021, 30% in 2022, 35% in
2sensitive and we need to act now. As a real estate company, we
recognize that it is our responsibility to reduce CO2 emitted by the2023, 70% in 2024, 100% in 2025
• Number of capital investments for renewable energy facilities: 3

Hulic Group and our properties. To this end, we set KPIs and areengaged in concrete climate change countermeasures as a priority

Our Approach to Sustainability

Initiatives for Climate Change

or more each year

We are revising our related KPIs as we have brought forward the target years of net zero CO2 emissions and RE100, respectively from ourinitial plans.
*2 RE100 is an abbreviation of Renewable Electricity 100% and is an international initiative in which member companies aim to use 100% renewable sources for the energy required fortheir business activities.

WEB

Proprietary Complete Corporate PPA Model for in-house development and ownership of non-FIT
renewable energy power generation equipment

RE100

In line with our Long-term Vision for the Environment, we havederived electricity from Hulic and selling to Hulic-owned properties.

Having joined RE100 in 2019, Hulic will convert electricity used inElectricity-derived CO2 emissions for tenants in our properties will

been implementing net zero CO2 emissions by 2050 and RE100

In this way, we have established a market-independent electricity

Group company business activities to renewable energy by 2024

become net zero when converting electricity used by all Hulic-by 2025 as part of our medium- to long-term initiatives related

trading mechanism.

to realize RE100. To ensure we will achieve this target, we will

owned properties to renewable energy is completed by 2030.

to climate change. We emphasize “additionality” perspective of   Furthermore, it was determined that we could move themonitor progress using achievement rates for each year until 2024

renewable energy and we develop and own proprietary renewabletarget years ahead as a result of revisiting our development plan,

as KPIs.

energy equipment to increase the total amount of renewableso we brought the achievement of net zero CO2 emissions forward

2025; 45% by 2030; 100% by 2050

energy. We plan to use electricity derived from renewable energy

20 years, from 2050 to 2030. Along with this move, we moved theResult of FY2020 : 27% reduction

supplied from our proprietary and owned solar photovoltaic

achievement of RE100 forward by one year, with 2024 as the new

We are revising our related KPIs as we have brought forward theequipment that do not use the FIT*2 system as well as small

target year. We estimate to invest approximately JPY60 billion totarget years of net zero CO2 emissions and RE100, respectivelyhydroelectric plants at all Hulic-owned properties*1.

develop solar photovoltaic equipment with a generating capacityfrom our initial plans.

   Hulic Property Solutions, a Group company, serves as a powerof 310 GWh/p.a. (equivalent of our estimated electricity usage inproducer and supplier (PPS) in order to create complete proprietary2030).

Group corporate PPA*3 model by purchasing renewable energy

Achieve Net Zero CO2 Emissions

CO2 emission reduction targets (The base year: 2013): 40% by
Corporate Governance

Our Initiatives for Achieving the Targets

Effective Use of Renewable Energy
https://www.hulic.co.jp/en/sustainability/ecology/warming/energy.html

Social Initiatives*1 Based on intensity (level) of CO2 emissions.

KPI: 4% in 2021, 30% in 2022, 35% in 2023, 70% in 2024 and100% in 2025
Result at the end of FY2020: 0.5%

Additionality

target years of net zero CO2 emissions and RE100, respectively
from our initial plans.

non-FIT solar photovoltaic
equipment

Energyresiliencesmall hydroelectric
plantsSolar photovoltaic equipment andsmall hydroelectric plants

28

Hulic Co., Ltd. Sustainability Book 2021

procure fromrenewableenergy sources

Hulic Property Solution (PPS)(electric grid owned bypower line companies)

Retail electricity supplier(Power Producer and Supplier or PPS)

supply renewableenergy sourced
electricity

Leasing properties
subject to RE100

The solar photovoltaic equipment (Chiba Pref.)Leasing properties
not subject to RE100

External Evaluation

We are revising our related KPIs as we have brought forward the

Newly developed

Hulic

Hulic Co., Ltd. Sustainability Book 2021

29

Status of Greenhouse Gas Emissions
Total Energy Consumption and CO2 emissions
load by adopting optimization control including high-efficiency

Total energy consumption and CO2 emissions are shown below.

• P roperties requiring maintenance/renovation, or properties to be

air conditioning system, total heat exchangers, and CO2 sensor,

We are making steady progress toward our CO2 emission reduction targets (short-, mid- and long-term) with a 27% reduction in FY2020.

newly purchased: Reduce energy consumption by an average ofillumination control devices such as LED lighting sensors and

5% by implementing facility renovation (increasing value), utilizing

human detection sensors, and use cogeneration/fuel cells, unused

green leasing* and operational arrangements.

energy, and heat interchange systems, etc.

•A
 ll buildings: Endeavor to reduce energy consumption withcooperation from tenants by taking measures such as visualizing
the energy consumption of each building.
•B uildings: Improve building envelope performance (improvewindow specifications and enhance heat insulation capacity, etc.),
introduce natural ventilation/lighting systems, and adopt greening*A green lease is where building owners and tenants collaborate to reach voluntaryagreements with regards to energy saving and other environmental burdens of realestate as well as improvements of indoor environments through contracts, etc., andimplement actions agreed.

WEB

Initiatives for Energy Conservation
https://www.hulic.co.jp/en/sustainability/ecology/warming/efficiency.html

of rooftops/walls, etc.

CO2 Emissions Reduction Plan
https://www.hulic.co.jp/en/sustainability/ecology/warming/roadmap.html

WEBE

Total Energy ConsumptionE2,140TJ（TJ）

Scope 1

1.6GJ/m²（GJ/m2）

Scope 2

2,192

0

1.6

1.6

2019

2020 (FY)

1.4

2,140

1.2

1,587

1.0
0.8

1,169

0.6

1,000

Natural Ventilation System (Hulic Head Office Building)

1.7
1.5

1.6

2,489

2,000

500

1.7

1.8

2,500

1,500

Total Energy Consumption Intensity

2.0

3,500
3,000

Natural Lighting System (Hulic Head Office Building)

Total Energy Consumption Intensity*1

0.4
115
blds

149
blds

161
blds

164
blds

156
blds

2013
(Base year)

2017

2018

2019

2020 (FY)

0.2
0.0

2013
(Base year)

2017

2018

Utilization of Unused Energy
Unused energy is a generic term for energy that can be utilized
effectively but has not been used, such as heat discarded fromWEB

Utilization of Unused Energy
https://www.hulic.co.jp/en/sustainability/ecology/warming/unused.html

E

CO2 Emissions

Eoutside air and rivers, groundwater, and sewage. We are working
conditions, asset type, and the characteristics of development
projects.

CO2 Emissions Intensity*1

95TMT-CO2

buildings and factories, and temperature differences between
on the utilization of unused energy according to location

Scope 1

(TMT-CO2)

70.6kg-CO2/m²(kg-CO2/m2)

Scope 2

120
103

110

100

120

95

80

100

67

60

40

40

0

115
blds

149
blds

161
blds

164
blds

156
blds

2013
(Base year)

2017

2018

2019

2020 (FY)

Note: Figures marked with “

96.8

80

60

20

CO2 Emissions Intensity

140

140

80

78.0

79.7

2017

2018

72.1

70.6

20
0

2013
(Base year)20192020 (FY)” have been assured by an independent assurance provider.

*1 From this year, we expanded the boundary to : “buildings in which the Company's ownership ratio of the total floor area is 50% or more (excluding properties for residential use andreal estate for sale).” This includes properties for which we do not have control of energy management. The values for 2019 and years preceding were recalculated as reference values
based on the new boundary. The target data is energy-related CO2 emissions. The unit calorific values and the CO2 emission factors are based on values in the Act on the Rational Useof Energy and the Act on Promotion of Global Warming Countermeasures. CO2 emissions intensity and energy consumption intensity are calculated by dividing by the sum of the total
floor area of the properties in the boundary. CO2 emissions and energy consumption of sectional and shared ownership properties are accounted according to Hulic’s share of ownershipof the total floor area.

30

Hulic Co., Ltd. Sustainability Book 2021

Environmental Initiatives

average of 25% by implementing various energy-saving measures.

Social Initiatives•H igh-efficiency devices/systems: Work to reduce the outdoor air

Corporate Governance

Energy Conservation Initiatives• P roperties for reconstruction: Reduce energy consumption by an

Hulic Co., Ltd. Sustainability Book 2021

External Evaluation

Adoption of Energy-saving Technologies, etc.

Our Approach to Sustainability

Environmental Initiatives

31

Initiatives for Environmentally Friendly Technologies

Promoting Initiatives Across the Entire Value Chain

Introducing CO2 Reduction Technologies at the Hulic Head Office Building

The Hulic Group promotes environmentally friendly processes

emissions (Scope 1 and Scope 2), but also indirect emissions related

across the entire value chain which covers from acquisition,

to its business activities (Scope 3) to broadly understand and lower

development, reconstruction, and leasing to management andgreenhouse gas emissions across the entire value chain.

maintenance of properties.

Hulic has committed SBTi* in June 2021 and is engaged in effort   In addition, the Hulic Group calculates not only its own

to conform with the standardized CO2 emissions calculations.

Photovoltaic power generation panels are installed on the rooftop, and rainwater is used for flush toilets. LED lighting systems are adopted in
the entire building including office rooms. Brightness is adjusted with daylight detecting sensors. To improve heat insulation performance of
exterior walls, Low-E pair glasses and wood blinds are used.

Category

Main target for calculation

Purchased goods and services

Consumables, office goods (Hulic Co., Ltd.),
water and sewerage (59 key buildings)

Fuel- and energy-related activities(not included in scope 1 or scope 2)

Electricity use (59 key buildings)

Upstream transportation and distribution Shipping parcels and letters (Hulic Co., Ltd.)

2016
351.0

2017

2018

2019

385.1

371.9

388.3

2,348.0 2,830.6 2,860.3 3,235.3
30.8

32.3

31.4

36.7

Waste generated from operations

7 buildings occupied by the head offices of Hulicand its Group companies

42.7

46.9

67.9

34.0

Business travel

Travel by train, bus or airplane, etc. (Hulic Co., Ltd.)

58.4

71.3

98.7

90.5

Employee commuting

Employee commuting by train or bus, etc. (Hulic
Co., Ltd.)

40.8

45.3

44.6

42.0

Scope 3 total emissions

Environmental Initiatives

Unit: t-CO2

Our Approach to Sustainability

Environmental Initiatives

2,871.7 3,431.5 3,474.8 3,826.8

Note: We have calculated greenhouse gas emissions, including those from the entire value chain, based on the Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout
the Supply Chain Ver. 2.3 published by the Ministry of the Environment.

Social Initiatives*Science-based targets are greenhouse gas emission reduction targets set by companies focusing 5 -15 years ahead, which meets standards required by the Paris Agreement.

Green Procurement Initiatives
Hulic is working to reduce environmental impacts throughout allof our operations, and we ask our business partners, including
suppliers, to cooperate with the following green procurement
policy:1. To engage in energy-saving activities and reduce GHG emissions;
2. To reduce the amount of water consumption as much as

4. To fully prevent environmental pollution; and5. To make efforts to save resources and reduce the amount ofwaste.

Natural Ventilation and Natural Lighting System Developed through Joint Research with the
Massachusetts Institute of Technology (MIT)Natural Ventilation System

Cross-Sectional View of Natural Ventilation

If the load from air conditioning can be lessened

Corporate Governancepossible;
3. To carry out a biodiversity-friendly business;by making the maximum use of natural energy
to curb energy consumption, CO2 emissions
can be reduced significantly. To introduce anatural ventilation system, joint research with
MIT was conducted, in which the flow of air andExternal Evaluation

other factors were meticulously simulated. The
natural ventilation used in the Hulic Head Office
Building is not simply an auxiliary system formechanical air conditioning. It was actually used
to successfully cool the entire building duringseasonal intervals. A silencer chamber is also
used for the intake opening, which worked torealize the use of a natural ventilation system ina dense urban area with high-level noise.

32

Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021

33

Environmental Initiatives

Image of natural lighting

Photovoltaic panels (patent awarded)

Our natural lighting system uses specially shaped natural

The special feature of Hulic’s photovoltaic panels co-developed

lighting anidolic louvers co-developed with MIT towith Taiyo Kogyo Corporation and Gifu Plastic Industry Co., Ltd.

capture constantly changing sunlight on the ceiling ofis that they are lightweight, freely designable, and easy to install.

rooms during changing seasons and times (elevation and

We realized a lightweight photovoltaic panel with high strengthorientation) without the use of power. Highly reflective

by using aluminum board and plastic-based honeycomb-panel

metal panels are used for interior ceilings, which supply amaterial. Its weight is about half that of a conventional solar panel.

consistent amount of pleasant natural light to the top of

The panel can be freely designed through customization and canoffice desks. This system has been installed at the Hulic

be made in various shapes. Equipped with a sliding mechanism

Head Office Building as well as at the Hulic Shinjuku

using a special metal fitting, it can be relatively easily installed.

Building and other buildings.

Thus, it can be installed even in a building with strict loading

Our Approach to Sustainability

Natural Lighting System

Environmental Initiatives

conditions such as in repairing works.
[Summary of patent]
Name of invention: Photovoltaic generation system and assembly

Photovoltaic panels (patent awarded)

methodEffects of CO2 Reduction

Registration No.: 6018856

Calculations at the Hulic Head Office Building

Registration date: October 7, 2016

CO2 can be effectively reduced by introducing such top-level environmental technologies. In CASBEE (Comprehensive Assessment System forCommercialization of thin-layer wall greening system (patent awarded)

Built Environment Efficiency), BEE scored 3.3, corresponding to rank S.

As a part of environmental business, Hulic jointly has developedwith TOHO LEO CO., Ltd. and Daito Techno Green CO., Ltd. a wall2

= 225 MJ/year m … Standard value of officebuildings minus 25%

ERR(*)= 35% … The highest class in the energy-saving
performance standard of Tokyo metropolitan
government

greening system (thin-layer wall greening system) that can be easily
installed in existing buildings. We completed development of theSocial Initiatives

PAL(*)

product and obtained a joint patent for it with three companies.
[Summary of patent]

CO2= 40% reduction compared to an average
emissions office building in the Tokyo Metropolitan
reduction Government's energy efficiency performancestandards.
= CO2 emissions throughout the building's entire
life cycle were reduced by 30％

Name of invention: Greening device and its method
Registration No.: 6460942
Registration date: January 11, 2019

Commercialization of thin-layer wall greening system* PAL= An assessment indicator for the energy efficiency of building plans and envelope(exterior walls and roof, etc.)

Corporate GovernanceInitiatives for Energy Conservation* ERR= Shows the percentage by which primary energy consumption has been reduced in
facilities and systems

Introduction of LED Lighting and Illumination Control Devices
Commercialization of environmental technologies

Hulic has realized a significant level of reduction

Natural lighting system (patent awarded)

in CO2 emissions by introducing lighting systems

The natural lighting system was developed as a result of a three-previously unattainable, and also that it has a simple, maintenance-with high energy-saving performance such as LED

year research/development project that Hulic engaged in with thefree structure even though it comes with a fixed type.

lighting and illumination control devices including

Massachusetts Institute of Technology. With a specially designed[Summary of patent]

amount of sunlight to the ceiling surface of a room without

Name of invention: Lighting louver unit

using electricity in accordance with different seasons and times

Registration No.: 6021103

of day. The greatest features of this system are that it realizes a

Registration date: October 14, 2016

External Evaluation

sensors to detect people and daylight.

natural lighting louver (anidolic louvers), it can take in a certain

comfortable level of illuminance with natural light, which was34

Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021

35

Hulic promotes the use of renewable energy power generation

at three investments or more in each year. Results in FY2020 were

Use of LED lighting, which is brighter than incandescent lamps andand effectively use resources. In princple, all Hulic’s development

equipment through proprietary development and ownership, as anthree.

fluorescents and uses less electricity, helps to significantly reduce

projects use LED lighting. We are also sequentially switching overalternative main power source for reducing CO2 emissions.

power consumption and CO2 emissions. Furthermore, as LED

to high-efficiency lighting and LED lighting at our existing buildings   Additionally, we are installing renewable energy equipment aslighting is long lasting, it is possible to not only save the trouble

as part of energy efficiency renovation work.

supplemental power supplies at our properties, and have set theof maintenance such as changing bulbs, but also reduce waste

WEB

Long-term Vision for the Environment
https://www.hulic.co.jp/en/sustainability/ecology/management/vision.html

CO2 Emissions Reduction Plan
https://www.hulic.co.jp/en/sustainability/ecology/warming/roadmap.html

target for the number of capital investments on renewable energy

Proprietary Complete Corporate PPA*4 Model for in-house development and ownership of
non-FIT renewable energy power generation equipment
Hulic entered the photovoltaic business using the FIT system*1 in
2012. In 2020, we started developing and using solar photovoltaic

we aim to achieve net zero CO2 emissions from all Hulic-owned

equipment that does not use the FIT system (non-FIT). Electricity

properties*3 in 2030.

derived from renewable energy generated by non-FIT power sources

Space with LED lighting system (Hulic Ginza Sukiyabashi Building)will be supplied to our properties by Hulic Property Solution, a Group

Introducing Low Energy Consumption, CO2 Emissions-reducing Facilities to Nursing Homes
We have been actively installing low energy consumption and CO2

bulbs for energy-saving purposes. Other facilities we are keen on

emissions-reducing facilities to our nursing homes. Many of ourinstalling include natural ventilation system, panel heating andnursing homes including Trust Garden Ogikubo, Charm Premiercooling system, highly efficient water heater, to name a few.

PPS). In this way, we aim to achieve RE100*2 by 2024. Further,WEB

Our Initiatives for Achieving the Targets
https://www.hulic.co.jp/en/sustainability/ecology/warming/roadmap.
html#anc4

company retail electricity supplier (Power Producer and Supplier or*1 A feed-in tariff (FIT) system for electricity that requires utility companies to purchase electricity generated using renewable sources for a certain period of time at a price specified by thenational government.
FIT electricity is not considered renewable energy as a portion of the cost of the electricity purchased by a utility company is added to the consumer’s bill so the tax payer must bearsome of the costs. Therefore, achieving the 100% goal with FIT electricity is not considered RE100 by definition.

Environmental Initiatives

Effective Use of Renewable Energy

Introduction of LED Lighting

Our Approach to Sustainability

Environmental Initiatives*2 RE100 is an abbreviation of “Renewable Electricity 100%” and is an international initiative in which member companies aim to use 100% renewable energy of the energy required fortheir business activities.
*3 Excludes single-tenant lease properties, residential properties and unmanaged shared properties for which we do not manage energy, and real estate for sale.

Yamatecho and Hospitalment Bunkyo Yayoi are equipped with

*4 A long-term contract scheme under which a business agrees to purchase electricity directly from an energy generator.

photovoltaic panels on their rooftops to provide electricSocial Initiatives

power to the common areas. The natural lighting system
is installed on the top floor of Granda Inamuragasaki
Kamakura Aoitei with a skylight. Furthermore, all of ournursing homes completed in 2019 adopted LED light

Atrium which installed natural ventilation system(Hospitalment Musashino)

Photovoltaic panels on the rooftop(Kamakura Aoitei)

The Hulic Group has begun rolling out a visualization system that

Corporate GovernanceUse of Systems that Make it Easier for Tenants to Conserve Energy
Solar photovoltaic equipment that does not use the FIT system (Saitama Prefecture)

freely controls air conditioning use in order to provide a better
understanding of a building's use of energy. This system enables
tenants to set the optimal working environment temperature
for their business and makes it easier to implement energy
conservation measures.

External Evaluation

Visualization system(Hulic Asakusabashi Building)36

Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021

37

Photovoltaic Generation System

As solar power does not generate electricity at night and thePrefecture. Mindful of the location and conditions, a range ofWe have been making effort to reduce CO2 emissions by installing

amount of power generated fluctuates depending on the weather,autonomous, electrification, and remote technologies werea photovoltaic cell module on the rooftop of buildings and

we are developing and operating our own small hydroelectric

introduced. These initiatives have resulted in a state-of-the-art

use solar power as a supplemental energy source. Among theplants that can generate electricity both day and night regardless

power plant expected to operate at higher operating rates thancompleted buildings in 2020, Rissei Garden Hulic Kyoto(powerof the weather from long-term perspective with the goal of

conventional small hydroelectric power plants.

generating capacity 5.5kW) and Hulic Ryogoku River Center(dittodeveloping energy resilience (a stable power supply from varied   From the perspective of the energy mix, Hulic plans to

5.0kW) are equipped with photovoltaic panels.

power sources).

continue developing and using small hydroelectric power   In May 2021, Hulic’s first small hydroelectric was completed

generators.

Actual power generation in FY2020
Property Name

Amount of power
generated [kWh/Year]

Hulic Kaminarimon Building

86,583

Hulic Shimurasakaue

10,915

Hulic Head Office Building

10,751

Hulic Osaka Building

9,596

Hulic Kojimachi Building

6,519

Hulic Hachioji Building

5,751

Hulic Fuchu Building

5,703

Hulic Ginza Building

4,820• Water source: Usune River in Kawabamura, Gunma Prefecture

Hulic Aoyama Building

4,391• Overall length: 1.65 km

Kyoto Shijotakakura Central Building

4,013• Height difference: Approximately 120m

Other

16,730

Total

165,773and began operations in Kawabamura, Tone-gun, Gunma*1 Small-scale hydroelectric power generation with an output of 1,000 kW or less. As it generates electricity stably day and night, it is considered to be a stable power supply with relatively
high operating rates among renewable energy facilities.
Note that small hydroelectric plans will not be used as renewable power sources as at 2030 since they use the FIT system. We plan to supply renewable energy to its properties after the
FIT period has ended (20 years hence).

Kawabadani small hydroelectric plant overview• Power generation scale: 199kW• Annual power generation: Approximately 1.3GWh (equivalent to

Phtovoltaic panels installed on the roof top of Hulic Ryogoku River Center

Environmental Initiatives

Small Hydroelectric Plants

Our Approach to Sustainability

Environmental Initiatives

360 households in terms of annual power consumed by ordinary

Kawabadani small hydroelectric plant water intake

period has ended (20 years hence)

Installation of Solar Heat Panels
Social Initiatives

households)• Hulic plans to supply electricity to its properties after the FIT

Hulic's hotels, multi-unit apartments and buildings that requirelarge amounts of hot water adopt a solar water heating system,

Small Hydroelectric Plant Construction (Image)which uses solar panels to collect the sun's heat. Hot water createdusing this system is supplied to residential units, dormitories andkitchens, among other facilities inside a building.
At HULIC SQUARE TOKYO, the solar heat collection panels arelocated on the rooftop as a supplemental heating source for hot
water system of THE GATE HOTEL TOKYO by HULIC and has been

Corporate Governancecontributing in decreasing CO2 emissions.

Solar heat collection panels (HULIC SQUARE TOKYO)

Installation of Photovoltaic Panels on an Exterior Wall
The Hulic Ogikubo Building is open to a major arterial road on
its south side, providing ideal conditions for sunlight exposure.
Capitalizing on this, we used a unique and ex tremely thinphotovoltaic panel that is sandwiched between glass panes to createa building material for the facade (front of the building). The panels

External Evaluation

form part of a 4.8 kW system capable of generating 2,600 kWh ofelectricity annually.

The exterior wall with photovoltaic panels (Hulic Ogikubo Building)38

Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021

39

Environmental Initiatives

Hulic Residence Soka installed a hybrid power generator. Thispower generator also uses wind power (wind speed to start
generating power = 1.2m/sec) and solar power. Supplying
electricity to street lights, which illuminate the street along the eastside of the river during the night, the generated power contributes
to the surrounding area.

Fundamental
ApproachHybrid street lights

Effective Use of Unused Energies
Effective Use of Unused Energies

We formulated our Long-term Vision for the Environment which states that we
execute environmentally friendly management to realize an ideal society of carbonfree and recycling-oriented society in 2050. As a real estate developer, we believe that
Hulic can offer value to society by putting our environmental effort into reducing CO2
emissions, using resources efficiently, and reducing waste.
We are actively working to reduce waste disposal and water consumption incooperation with our customers (tenants) and business partners for realization ofrecycling society. When developing and reconstructing buildings, we endeavor to
reduce environmental impacts by promoting the 3R (reduce, reuse, and recycle)
through the adoption of Longer Life Building designs that enable to reduce waste
significantly and use resources effectively.

《Results in FY2020》 P ercentage of technical measures (such as longer life design, etc.)* applied to reduce constructionwaste: 100 % each year

Unused energies are generic term of energies that have not been

ground water, or sewage water. To help realize a carbon-free

used in the past despite the fact that they could be used effectively

society, we are working on the advanced utilization of unused*The percentage of properties completed in the given year that used technologies and measures that contributed to a reduction in waste as well as raw

which include heat disposed from buildings and factories, andenergy according to location conditions, asset type, and thematerials and other resources based on the Hulic Guidelines for Longer Life.

difference in temperature between outside air and river water,

characteristics of development projects.

WEB

Environmental Initiatives

Realization of a Recycling-oriented Society

Wind-power Generation System

Our Approach to Sustainability

Building a Recycling-oriented Society

Roadmap of Initiatives for Achieving the Visionhttps://www.hulic.co.jp/en/sustainability/ecology/management/vision.html#anc3

Case Study1
Use of exhaust heat of hot springs at FUFU KawaguchikoLonger Life Buildings
Standardization of 100 Year Buildings
The Company formulated the Hulic Guidelines for Longer Lifeas standard specifications in all development and reconstruction

Building (the Guidelines) in 2011 to standardize specifications

completed or under development since formulating the Guidelines

for development and reconstruction projects. The Guidelines

in 2011.

Social Initiatives

At FUFU Kawaguchiko, our ryokan (a Japanese style luxury inn),the exhaust heat of flowing hot spring water which had been
disposed in the past is collected by highly efficient heat pumpand introduced as a hot spring exhaust heat utilization system
which is used as a supplemental heating source for the water
heater of ryokan. The effect of introducing this system resulted
in an approximately 30% decline in water heating energy
consumption. The system received subsidy from the Ministry of
Economy, Trade and Industry as the FY2017 and FY2018 subsidy
on business that promote local production for local consumption
by making use of local features.

are composed of three ideas, 1) high earthquake resistance andhigh durability; 2) smoother updating and renewal; and 3) highExterior of FUFU Kawaguchikoserviceability. We use only high-grade building frames that ensure
the buildings are durable and used safely for over 100 years as well40

exteriors. Furthermore, longer life buildings reduce waste generation

In the HULIC RYOGOKU RIVER CENTER (a PPP project),indoor space, such as household air conditioners, this enables
which was completed in 2020, we focused on the Sumida
facilities to be air conditioned with less energy consumption.
River adjacent to the site of the property and installed an airIt is estimated that this project will reduce the annual energy
conditioning system that utilizes energy from the difference in
consumption for air conditioning in the target area bytemperature with the river water. Praised for its advanced nature,
approximately 12%.
the project was selected by Cool Net Tokyo(Tokyo Metropolitan Center for Climate
Air conditioning
Change Actions) as a “project to expand
system making use of
the introduction of renewable energy on
river water (image)a local production for local consumption
basis.” The River Water Temperature
Difference Energy Utilization Equipment
uses a purpose-built heat pump to provide
air conditioning in the facility by extracting
heat from or releasing heat to the riverwater, within a range that does not affectthe environment, as the temperature of theriver water is cooler than the outside air insummer and warmer in winter. Comparedwith air-source heat pumps that transfer
heat absorbed from the outside air to anlife cycle CO2 by 6% compared to the cases where buildings are

Hulic Co., Ltd. Sustainability Book 2021

Corporate Governance

fit with diversifying work styles in the future and reform building

An air-conditioning system that utilizes energy from the difference in temperature with the river water in the HULIC RYOGOKU
RIVER CENTER

and resources used for reconstruction by 50% or more, and reduce
conventionally reconstructed every 40 years (standard plans).
Based on this evaluation, we have introduced longer life designs

Environmental Advantages of Longer Life Buildings

External Evaluation

Case Study2

as make it possible to modify layout or change of intended use to

Hulic Co., Ltd. Sustainability Book 2021

41

Hulic Guidelines for Longer Life Building

Wooden Construction and Conversion Initiatives
We have been developing fireproof wooden buildings using timbercan help cut down CO2 levels. Furthermore, trees that are ready to

1 High earthquake-resistance and high durability

that requires less energy for manufacturing and processing with

be cut for timber have a reduced ability to absorb CO2, so while

Structural frames shall be strong and solid so they can be safely used over 100 years.

lower CO2 emissions since 2018 to realize a sustainable society in

we cut down trees as building materials, we also plant new trees• We apply our internal earthquake-resistance standards where building performance can safeguard human life and enable continued use of

response to the Forestry Agency's promotion of expanded use of

to replace them. In this way, we are contributing in maintaining

the building with post-earthquake repair in the event of an earthquake with a seismic intensity of seven to all asset types of properties wewood in a series of initiatives to reduce overall CO2 emissions.

the proportion of young trees that absorb CO2 well at a certain

develop or construct   We also engage in activities to cut, plant, and remove

level. Through this initiative for fireproof wooden buildings, weundergrowth by the same amount as the standing timber used as

are promoting forest circulation by using, planting, growing, and• Thoroughly control the quality of works by designating details of design conditions for concrete and construction materials

the source of building materials for our fireproof wooden buildings.

cutting down trees, which in turn reduces CO2 emissions and leads

2 Smoother updating and renewal

Trees absorb CO2 in the air and provide a carbon dioxide fixing

to efforts to conserve biodiversity.

We adopt a design capable of responding flexibly to future needs, and establish plans of updating and renewal without the need to makesolution as they grow, so an abundance of trees in the nation’s land
Environmental Initiatives

tenants move out.

Our Approach to Sustainability

Environmental Initiatives• Flexibly respond to future changes in use purposes and layout, with spare ceiling height room and floor loading capacity, as well as a flexible
partition wall and a system ceiling.
• Ensure the space to install spare pipes and equipment, etc. so as to continue business even during the period of works for updating andrenewal.
• Especially in commercial buildings, adopt the interchangeable facade system capable to meet the needs of the time, in order to avoid thebuilding exterior to become obsolete.

3 Ease of maintenanceWe formulate plans enabling timely and meticulous maintenance in order to keep sophisticated building specifications and optimal building
functions constantly.
• Use gondola for maintenance, including inspections of the building exterior.
Social Initiatives• Install an elevator reaching the rooftop to carry in materials there.

POINT1
Responding to future changes in purpose of use and layout
From a viewpoint of a long-term use for 100 years, it can be expected that the use of building

Basic Policy for Promoting Wooden Buildings

respond easily to future changes in use purposes and layout, as well as for renewal.
Ceiling height:

2.8m or higher

Loading capacity:

500kg/m2 in general, 800kg/m2~1t/m2 in heavy duty zone

System ceiling:

Responding to needs for smoother updating of facilities in the ceiling, ease ofmaintenance, and changeability of partitions between tenants.

POINT2
Replaceable facade systems

To Spreadseparated from the main structure to update the exterior design without any
legal restraints. Hulic Ginza Sukiyabashi Building located in Ginza, a major

Joined the Wood Change Network
We have joined the Wood Change Network, a networking gathering sponsored by the Forestry Agency which aims topromote the use of timber in the private sector buildings.

To UseGinza 8-chome Development Plan
We are developing Japan’s first 12-story wooden fireproof commercial building (hybrid construction combining wooden
and steel structures) in Ginza.

To Plant

Execution of environmental afforestation
We execute planting trees in addition to use them in building construction so that we can promote circulation offorests.

Especially for commercial buildings, the exterior appearance is important. This is because a stylish appearance at the forefrontof the age would attract customers. Therefore, we have adopted a system in which the facade (front exterior of building) can be

Organized Wooden Architecture Symposium 2019
We held the Wooden Architecture Symposium 2019 with the aim of raising awareness on the possibilities of woodenbuildings and to increase demand for timber in urban areas.

commercial area in Japan, has adopted the characteristic facade design
expressing the scenery of a waterfront with willow trees. The two-tier facadewith casted aluminum in curved shape installed on the curtain wall is separate
from the main body of the building.
As for office buildings, we intend to adopt a simple and calm design with

Corporate Governance

By providing spare ceiling height room and floor loading capacity in advance, it is possible toExternal Evaluation

will largely change, for example, from an office building to a store or from a store to a restaurant.

an exterior appearance that can become harmonious with the surrounding
landscape as time passes.

42

Hulic Co., Ltd. Sustainability Book 2021

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43

Example of Spread 1: Organized Wooden Architecture Symposium 2019

We are developing Japan’s first 12-story wooden fireproof commercial building (hybrid construction combining wooden and steel structures)

We held the Wooden Architecture Symposium 2019 with the aim

than 800 participated the event and deepened understanding on

in Ginza, one of our focus areas, which is scheduled for completion in October 2021.

of raising awareness on the possibilities of wooden buildings,

possibilities and challenges of wooden buildings through listening

helping to reduce CO2 emissions and protecting forests. Moreto the key note speech and panel discussions.

Special Features
New technologies
・ Japan’s first 12-story wooden fireproof commercial building. The
first case of leasing buildings higher than 11-story. (As of 2019)

Environmental benefits
・ Promotes fixation of CO2 emissions
Reduces CO2 by increasing the amount of wood used, leading
to forest regeneration (forest health)・ Reinvigorates forestry (regional revitalization)
・ Reduces CO2 emissions from construction
Eliminates CO2 emissions during structural member
manufacturing (eliminates CO2 that would have been
emitted during iron manufacturing, iron processing, concrete
manufacturing and other processes)

・ Facilitates simplified foundations
Lightweight superstructure (above-ground frame section)
eliminates the need for piles, etc.
・ Shortens time required for construction
Superstructure construction is simplified as no fireproof coating
is required when columns and beams are lightweight andfireproof when manufactured at the factory.

BCP responses
・ Installed supplemental elevated water tank and sewage tankso that both drinking water and flush water for lavatories areready for 72 hours in emergency.
・ Installed emergency generator that lasts for 72 hours.
・ Considering the site is in Giza area, we plan to locate high tide
response devices on upper floors and make it possible to countertide up to 1 meter high by setting vertical damp proof barrier.

Key Note Speech
Kengo KUMA
(Architect · Professor at
The University of Tokyo)

From concrete to wood
Japan could be the front runner in the century of wood.
● A shift from concrete to wood has been observed as oppose to the 20th century which was a time of concrete.
● Japan’s wood-related technologies are number one in the world.

Panel Discussions
Kengo KUMA
Shuzo SUMI
(Senior Executive Advisor, Tokio Marine &Nichido Fire Insurance Co., Ltd.)

Tadao KAMEI(President and CEO, Nikken Sekkei Ltd.)

Masahiro MIYASHITA(Chairman of the Board, Takenaka
Corporation)

Atsuko FUKUSHIMA(Journalist)

Aiming to increase demand for timber in urban areas● Increase in middle-to-high-story wooden buildings will promote community vitalization● Wooden buildings will improve global and human environmental issues
K. KUMA: - Wooden construction is the area that Japan can make the world to seek after.
S. Sumi: - Effective use of Japan’s ample forestry resources will be the key to regional
revitalization.
T. Kamei: - O ptimization of timber is the key in planning of high-story wooden buildings.
M. Miyashita: - T echnological innovation of wood engineering will support high-story wooden
construction.
A. Fukushima: Wood is the ideal future material of sustainable society.

Environmental Initiatives

Example of Use 1: Ginza 8-chome Development Plan (fireproof commercial building)

Our Approach to Sustainability

Environmental Initiatives

Social Initiatives

Note:Occupation, affiliation, title, etc., when symposium was held.

Example of Spread 2: Joined the Wood Change Network
The Wood Change Network (the Network) is a networking
gathering sponsored by the Forestry Agency which aims topromote the use of timber in the private sector buildings. The
Network discusses and considers matters related to spreading
timber use including identification of issues, direction of solutions
and popularization, and aims to create an environment that timber
is more easily used as well as to create a platform of spreading the
Network with an intent to continuously promote the use of timber.

Example of Use 2: Promoting Conversion to Wood
Example of Planting 1: Planting the Same Amount of Trees Used

Along with the development of fireproof wooden buildings, Hulic

better working environment for office workers. The building uses

is actively promoting the use of wood for exteriors and interiors

plentiful natural materials and wooden benches and wooden shelves

Hulic outsources logging, planting, and weeding activities to(hybrid structure combining wooden and steel frame construction)

depending on the application and location of the developedarranged in a spacious 3.8 meter-high entrance hall complete with

forestry cooperatives in an effort to plant the same amount ofof a property scheduled for completion in October 2021. At theproperty.

a full wooden ceiling. Praised for our initiatives, we received highest

trees as the standing trees used as building materials for fireproof

same time, approximately 12,000 cedar saplings were planted (new   In Hulic JP Akasaka Building, based on the concept of “arank of “S” in CASBEE-Wellness Office* certification (issued bywooden construction. Approximately 300 m3 of lumber willplantings) across an area of about 4.3 hectares. Over the next fivewellness space for working people,” we focused on creating a

Institute for Building Environment and Energy Conservation).

be used in the construction of a commercial facility (the Ginza

years, we will continue cutting undergrowth so that the planted

8-chome development plan) for the fireproof wooden construction

cedar saplings will grow healthy.
External Evaluation* Comprehensive Assessment System for Built Environment Efficiency (CASBEE) assesses the specifications, performance, and initiatives of buildings that support the health and comfort ofbuilding users, factors that contribute to intellectual productivity improvement, and the performance of safety and security.

Corporate Governanceuse of timber movement throughout Japan. We have joined theEntrance Hall (Hulic JP Akasaka Building)44

Hulic Co., Ltd. Sustainability Book 2021

Wooden louvers (Hulic Ryogoku River Center)

Cedar sapling newly planted in the spring of 2021
(Fukushima Prefecture)

A mountain where saplings were newly planted in the spring of2021 (Fukushima Prefecture)

Hulic Co., Ltd. Sustainability Book 2021

45

Our Group-wide Initiatives
We are proactively working to reduce waste and water consumption in cooperation
with tenants and building management companies toward realization of recycling
society.
For developing and reconstructing buildings, we endeavor to reduce environmental
impacts by promoting the 3R (reduce, reuse, and recycle) through the adoptionof Longer Life Building designs that enable to reduce waste significantly and use
resources effectively.

In consideration of the seriousness of marine pollution caused bycontainers, straws, spoons and shopping bags. We are also actively

disposable plastic waste, the in-house canteen at the Hulic headencouraging employees to bring their own cups.

office building has stopped use of disposable plastic beverage

Efforts to Reuse
Recycling parts of underground building frames during reconstruction
In reconstruction works, we make various efforts for reducing

Examples of buildings that have used recycled
underground frames

wastes generated in demolition works including concrete debris.
For example, underground building frames of existing buildings are● Hulic Ginza Sukiyabashi Building

used as retaining walls for the new building with new underground● Hulic Head Office Buildingbuilding frames installed inside. We make sure that adequate

Resource-saving and Reduction of Waste in Buildings Owned by Hulic and Reconstruction of Buildings● Ochanomizu Sola City

inspections are conducted to confirm the strength when building● Hulic Shinjuku Building

frames of existing buildings are recycled.

Hulic Group has worked on reduction in the amount of waste

water and various water conservation systems in many of ourAfter considering impacts on neighboring areas of property, we

disposal and water consumption in cooperation with tenants andbuildings. Water saving toilets and wash basins are standardized.

introduced the PC method (described later) into the following

Environmental Initiatives

Fundamental
Approach

Reduction of plastic waste at head office building

Our Approach to Sustainability

Environmental Initiatives

WEB

Hulic Guidelines for Longer Life Building
https://www.hulic.co.jp/en/sustainability/ecology/waste/
initiatives/long_life.html#anc2

building management companies. We install toilets that reuseprojects:

Amount of Waste Disposal at Hulic GroupBook donation program

We are constantly making efforts at buildings which our group company head offices occupy including hotels to reduce waste in order for

We launched the book donation program, which started basedwhich provides educational and cultural support to children in Asia.

building a material-recycling society.

on suggestions from employees. In this program, we donate theThis activity contributes to reducing waste and helps to address theproceeds from selling used books collected from group employees

poverty issue.

Efforts to Recycle
As recycling efforts through daily business activities, we started to recycle used paper and printer toner cartridges. We will continue to workon those efforts to support achieving a recycling society.

Trends in the amount of recycled paper(*)
Fiscal year

FY2016

Recycled amounthave been assured by an independent assurance provider.

* The boundary is the buildings occupied by the head offices of Hulic and its Group companies. In FY2020, we calculated total waste disposal at certain properties in the boundary by using
weight conversion factors based on actual measurements. As a result, we were able to improve the precision of the weight of the total waste disposal by 169 metric tons compared withthe weight calculated by using the conventional weight conversion factors. The results increased from FY2018 as Porte Kanazawa, a large commercial building, has become subject toaggregation since.

(Unit: kg)

FY20179,400

FY201811,365FY201913,125

FY202014,54015,600* The scope is Hulic Head Office Building.

Prevention of Pollution
The Company considers that the minimization of environmental

cooperation with design and construction companies. In addition,

pollution due to business activities is indispensable to realize awe aggregate data on SOx, NOx, VOC, and hazardous waste

recycling society. When planning buildings, we adopt construction

generated in the development business to monitor the amounts

methods to reduce pollutant emissions to the extent possible ingenerated, and we disclose the actual results .

Corporate Governance* Figures marked withSocial Initiatives

to the external used book dealer to Shanti Volunteer Association,

Amount of emission of SOx, NOx and VOC from hazardous wastes
FY2018
Number of properties

Efforts to Reduce
Reduction of disposals from restaurants in our own brand hotels

own and manage (The Gate Hotel brand) are reducing the amount

We have materialized environmental advantages by making

of garbage from their restaurants by biologically processing raw

efforts to curb the amount of waste disposal and CO2 emissions

garbage.

during development, for example, by adopting longer life designs
which can be in service for 100 years or longer as standard
specifications(*) with an eye to saving resources. At hotels we

WEB

Longer Life Buildings
https://www.hulic.co.jp/en/sustainability/ecology/waste/
initiatives/long_life.html

FY2019FY202010

4

7

SOx emissions (kg)

1,620

60

142

NOx emissions (kg)11,527

1,334

1,649

VOC emissions (kg)

157

124

0

External Evaluation

Promotion of the 3R*Figures are for developed and constructed buildings for which data were collected in each year.

* When building with longer life designs, the amounts of waste generated and resources used in reconstruction works can be reduced 50% or more, compared to the conventional caseof reconstruction every 40 years (standard plans). Based on this evaluation, we have introduced longer life designs as standard specifications in all developments completed or underconstruction since 2011.

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47

Initiatives to Reduce Water Consumption(Reducing environmental burdens)(Benefits within construction activities)• Reduced-weight materials• Highly accurate pre-cut processing (machining) contributes to

Almost all water consumed in the Group are from the buildings   In addition, we are gradually upgrading the toilets in theowned or the buildings that we have offices, and the water flowbuildings we own to ensure better plumbing while also changing

and construction operations• Convenience when fixing to other building materials with screws

starts from tap water and discharge it into sewers. To reduce

to water-saving flush toilets and hand washers. The Company is·Reduction of CO2 emissions from transportation• Since structure is finished material, interior finishing costs are

the amount of water consumption in buildings owned by thealso working to ensure the effective use of water resources byCompany, we have taken the initiative of introducing water-using rainwater to water the greenery and flush toilets for certain

saving devices on water taps installed in the plumbing of existingbuildings. Note that Hulic does not operate business activities inbuildings (saves water by approximately 40% per tap) to preservehigh water stress area where demand for water is tight.

·Rationalization of vehicles and heavy machinery in transportation• Factory production reduces the amount of onsite work andeliminates onsite waste materials• Adoption of floor CLT eliminates need for scaffolding

water resource.

Water Consumption

smooth assembly work

reduced*Hybrid structure combining wooden and steel framework

WEB

Example of Use 1: Ginza 8-chome Development Plan (fireproof commercial
building)
https://www.hulic.co.jp/en/sustainability/ecology/waste/initiatives/special_feature.html#anc4

Initiatives for Biodiversity
Fundamental
Approach

Hulic is carrying out initiatives that increase biodiversity in order to create urban
spaces that are in harmony with nature.

Environmental Initiatives

Benefits of Hybrid Fireproof Wooden Construction*

Initiatives for Water

Our Approach to Sustainability

Environmental Initiatives《Results in FY2020》Number of greening properties: 5 (Coverage: all completed properties each year)* The figure marked with* The figure marked withhas been assured by an independent assurance provider.
* T he boundary is properties with a total floor area of 3,000 m2 or more, excluding buildings where bank branch is the sole tenant, as well as sectional and shared ownershipproperties and real estate for sale. Please refer to page 19 for the number of target properties.

Biodiversity Guideline

Social Initiatives

Rain water reutilization equipment at Hulic Setagaya

has been assured by an independent assurance provider.

Hulic recognizes the importance of biodiversity's impact for theliving environment, and in order to contribute to biodiversity, we
have created the Declaration of Biodiversity Conservation (Hulic's
Biodiversity Guidelines) which has been well communicated within
our Group.

Construction
Adoption of the PC Method
From the standpoint of a business owner, we proactively   Furthermore, we have been considerate of and cautiously

Effect of the PC Method

executing our businesses that our business should not create any
negative impacts on biodiversity and endangered species.

the amount of waste generated during construction. Thismethod, which can shorten a construction period andApproaches to JHEP Certification
We are also working to ensure that we consider ways to conserve

Society-Japan to quantitatively evaluate and promote biodiversity

construction, is highly rated in terms of longer life service ofand restore local vegetation during reconstruction of properties

conservation initiatives. The number of properties certified totalingbuildings.

from the standpoint of preserving biodiversity. We adopted the

12 as of December 31, 2020.

* P C (Precast Concrete) method: Precast panels produced at a plant underconsistent quality control are carried to a worksite and assembled.

JHEP certification system issued by Ecosystem Conservation

External Evaluation

minimize impacts on surrounding environments during

Hospitalment Hongo: exterior and garden

48

Hulic Co., Ltd. Sustainability Book 2021

Corporate Governanceadopt the PC method (*), which can significantly reduce

Hulic Co., Ltd. Sustainability Book 2021

49

Environmental Initiatives

Information Disclosure based on TCFD Recommendations

Hulic has formulated Hulic Environmental Policy which embodied
our Sustainability Vision and is executing environmentally friendly

Promotion of Greening of Surrounds, Rooftops and Walls

management. Aiming to continue sustainable growth while

Our greening projects aim to create lush green urban spaces as

preventing heat accumulation, thereby reducing air conditioning

mitigating and adapting to climate change through our businesswell as to harmonize with nature with much consideration toloads on the top floor. Covering the exterior walls of a building

activities, we announced our long-term vision for the environment,

biodiversity. When greening surrounds, we primarily select plants

with plants serves as a countermeasure against the heat islandwith 2050 as the target achievement year and are proceeding withthat are easy to care and resistant to strong winds so as to improve

effect as well as comforting for passersby. Hulic has jointly

efforts toward the realization of a carbon-free and a recycling-

the TCFD* recommendations in 2020 and started disclosing

the scenery and appropriate for location. Roof greening makes

developed with other companies a thin-layered wall greening

oriented society. Recognizing the importance of climate-related

information in line with the recommendations after completingit possible to save energy in buildings by blocking sunlight andsystem that is easy to introduce to existing buildings.

financial information disclosure, we expressed our support foranalysis and responses on the recommended framework.

* TCFD is an abbreviation for “Task Force on Climate-related Financial Disclosures”, which was established by the Financial Stability Board and has proposed a framework for disclosing
climate-related information to investors.

Hulic JP Akasaka Building (completed in November 2020)
This property is a medium-sized office building facing Sotobori-contributing to the formation of an ecological network in the citydori, jointly developed by the Company and Japan Post Real Estate

and the promotion of biodiversity in the heart of Tokyo.

Co., Ltd. It is located in the middle of a lush area comprising theThis building received highest rank of “S” in CASBEE-Wellness

Imperial Palace, Akasaka Imperial Palace and Hibiya Park, all of

Office* certification (issued by Institute for Building Environment

which are home to living creatures in the center of Tokyo. By

and Energy Conservation). Greening the rooftop and walls willgreening the rooftop and walls, the JP Akasaka Building will serve

enable office workers to sense the four seasons even while in theas a relay point for living creatures to move between habitats,center of the city.

* Comprehensive Assessment System for Built Environment Efficiency (CASBEE) assesses the specifications, performance, and initiatives of buildings that support the health andcomfort of building users, factors that contribute to intellectual productivity improvement, and the performance of safety and security.

Details

Page3 Sustainability Vision
Page18 Hulic Environmental Policy
Page20 Long-term Vision for the Environment

TCFD Disclosure Recommendations and Hulic Initiatives (Summary)
TCFD Disclosure Recommendations

Hulic Initiatives (Summary)Corporate Governancea) Board of Directors oversight of climate-related risks andopportunitiesb) Management's role in assessing and managing climate-related risks
and opportunities● Establish Board of Directors oversight and monitoring structure● Matters related to climate change are deliberated by the

Sustainability Committee, which is chaired by the President andRepresentative Director, who is responsible for climate change

Strategy

Green walls and wooden conversion of entrancea) Short, medium, and long term climate-related risks andopportunities identified by the organizationb) The impact of climate-related risks and opportunities on theorganization’s businesses, strategy, and financial planningc) Describe the resilience of the organization’s strategy, taking into
account different climate-related scenarios, including a 2°C or
lower scenario

Rooftop garden● Analyze and evaluate climate change mitigation andadaptations relating to climate change risks and opportunities,
based on a 2°C or lower scenario and a business as usual
scenario● Examine validity of current strategies based on evaluation
results

Risk Management

Initiatives at the Hulic Head Office Building
On the rooftop garden of Hulic Head Office Building, seven kinds

nature while working in Tokyo.

of plants including Canarian ivy and evergold are used to cover the   Various trees such as European privet, Japanese boxwood,

wall surface, surrounding terrace benches for approximately 20

agapanthus, fuiriyaburan, and gazania have been planted on thepeople, and provide a transpiration effect to ease the heat-island

rooftop of the expanded building of the Hulic Head Office. In

effect. With this green wall over approximately 106m2, the rooftop

addition, we have placed wooden decks and grown a lawn on thegarden is a space where employees can relax and rest, and feelingsurface.

a) Organizational process for identifying and assessing climate-relatedrisksb) Organizational process for managing climate-related risksc) Describe how processes for identifying, assessing and managing
climate-related risks are integrated into the organization’s overallrisk management

Social Initiatives

ease the heat-island phenomenon as well as making buildings more energy efficient.

Environmental Initiatives

Information Disclosure based on TCFD Recommendations● The Sustainability Committee centrally deliberates climatechange matters including risk management and reports to theBoard of Directors● The Risk Management Committee evaluates and deliberates
climate change risks from a Group-wide risk management
perspective and reports to the Board of Directors● The Board of Directors receives reports from the Sustainability
and Risk Management Committees and oversees climatechange risks

Corporate Governance

As a part of our measures against global warming, we have put emphasis on greening of surrounds, rooftops, and walls which can effectively

Our Approach to Sustainability

Hulic Initiatives (Summary)

Greening Initiatives

Metrics and Targets

Wall greening

Rooftop greening● Set climate change KPIs (non-financial key performanceindicators) and related indicators, disclose progress towardachieving targets on Hulic website, etc.
・Reductions in CO2 emissions (compared to 2013 base year)
40% reduction in 2025, 45% reduction in 2030, 100%
reduction in 2050
・Achieving RE100 by 2025
・Number of times the Sustainability Committee engaged inclimate change monitoring
・Number of Environmental Advisory Council held

External Evaluation

Rooftop gardena) Disclose the metrics used by the organization to assess climaterelated risks and opportunities in line with its strategy and risk
management processb) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhousegas (GHG) emissions, and the related risksc) Describe the targets used by the organization to manage climaterelated risks and opportunities and performance against targets

We are revising our related KPIs as we have brought forward the target years of net zero CO2 emissions and RE100, respectively from ourinitial plans.
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51

Environmental Advisory Council

centered on Board of Director oversight and the Sustainability Committee. This governance mechanism is stipulated in the Basic Regulations

Hulic receives advice and recommendations on environmental

since 2010.

on Climate Change.

issues from specialized and technical knowledge and objective   We also receive advice and suggestions from external advisors

viewpoints. To promote efforts to create value for society, we haveon matters related to climate change that are discussed directly by

Examples of discussions and decisions made under our climate change-related governance structure:● An initiative to reduce CO2 emissions from owned properties to net zero and related investment of approximately JPY 100 billion● Supporting RE100 initiative and achieving by 2025
● Developing Japan's first fireproof wooden 12-story commercial facility● Supporting TCFD recommendations and disclosing information in line with the recommendations● Achieving net zero CO2 emissions from owned properties and RE100 ahead of schedule, and related investment of approximately JPY 60billion

Board of Directors Oversight
The Board of Directors receives reports on climate change risks andstrategies, management plans, annual budgets and profit targets

opportunities from the Sustainability Committee at least once a

are decided after consideration of climate change risks andyear, and monitors and oversees the resolution of issues and setting

opportunities when needed.

been holding regular Environmental Advisory Council meetings

top management, which is leveraged for management decision-

comprising external advisors and top management once a year

making regarding the planning of climate change-related measures.

External Advisors
Toshiharu Ikaga
Professor, Keio University
Yoshihiro Fujii
Representative Board Chairman, Research Institute forEnvironmental Finance (RIEF)
Takao Kashiwagi
Specially Appointed Professor & Emeritus Professor, Tokyo
Institute of Technology

Keisuke Takegahara
Deputy Chief Research Officer, Chief Manager of Sustainability
Management Office, Corporate Planning & Coordination
Department, Development Bank of Japan Inc.
Management Members from Hulic
Chairman, President, Vice Presidents, Senior Executive Managing
Officer, General Manager of Business Planning and Management
Department, Group company executivesof targets. In addition, important matters such as management

Climate Change-related Corporate Governance Diagram

Environmental Initiatives

Corporate Governance
Recognizing Hulic’s climate change response as an important management issue, we have established a corporate governance mechanism

Our Approach to Sustainability

Environmental Initiatives

Sustainability Committee
Matters concerning climate change are deliberated andsustainability, including climate change, and evaluates progress bycoordinated by the Sustainability Committee.

reviewing performance.

   The Sustainability Committee, which is chaired by the PresidentManaging Officer, the General Manager of the Business Planningand Management Department, the General Manager of the Real
Estate Planning Department and Group company executives. The
Committee evaluates the impact of climate change on business atleast once a year, formulates policies and strategies for mitigating
identified risks and seizing opportunities, and discusses how toadapt to climate change, including reflecting its impact in plans,budgets and targets. The Committee also sets KPIs related toSocial Initiatives

change, is composed of the Vice Presidents, Senior Executive

Members
President, Vice Presidents, Senior Executive Managing Officer,
General Manager of Business Planning and Management
Department,
General Manager of Real Estate Planning Department
Observers
Group company executives, Full-time Audit & Supervisory
Board members
Secretariat
Business Planning and Management Department, Corporate
Sustainability Office

Corporate Governanceand Representative Director, who is responsible for climate

Management Responsible for Climate Change
The President and Representative Director is responsible forthe impact of climate change on Hulic business and manages

the matters related to climate change. The President andappropriate responses. The Basic Regulations on Climate Change,

Representative Director serves as the Chairman of the Sustainability

which stipulate items related to climate change, are a matter forCommittee, and is ultimately responsible for assessments ofapproval by the President.

The Business Planning and Management Department is in charge of• Designing processes to identify and assess the impact of climate

climate change-related matters and is responsible for the planning,change, managing identified impacts and integrating them into

proposal and management of climate change-related items as well as
the promotion of climate change responses throughout the Group.

52

risk management across the organization.
•D eveloping indicators used to measure and manage the impact ofSpecific items include:

climate change, and set goals, tracking performance and reporting• Leading the monitoring of climate change impacts inprogress to the Sustainability Committee at least once a year.

conjunction with related departments within Hulic and Group• Submitting reports and recommendations as needed to thecompanies, understanding status and submitting reports andRisk Management Committee regarding identified climate

recommendations on appropriate measures to the Sustainabilitychange impacts, and integrating them into Group-wide risk

Committee at least once a year.

management.

Hulic Co., Ltd. Sustainability Book 2021

External Evaluation

Department in Charge of Climate Change-related Matters

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53

Businesses Largely Impacted by Climate Change

and physical risks in the scenarios we examined, and have found

adapting to climate change, through business activities, andthat our business is sustainable and our strategy is suitably resilient.

For each Hulic business, we assessed the impact of climate change

event. By integrating the results of these assessments, we selected

we recognize that our climate change response is an important

Based on our motto of “Driving Innovation and Accelerating

according to the type of climate change risks and opportunities asbusinesses that could have a large impact from climate change.

management issue. The effects of climate change are expected

Progress,” we are going ahead with a business model that is

outlined by TCFD. Regarding risks, departments within the RealAs a result, real estate and the environment-related businesses

to become more apparent over time, so we analyzed the impact

able to flexibly respond to changes in external environment.

Estate Business Division, the Planning and Administration Division,

were deemed to have large impacts from climate change, weof risks and opportunities on our strategy using multiple climate

We concluded that, going forward, we will be able to continue

and the department responsible for environmental technologies

selected these businesses for a scenario analysis. We may consider

change scenarios and examined resilience of our current strategies

improving our corporate value through risk mitigation by flexibly

first evaluate the inherent risks for each risk type based on theto add other businesses to the climate change scenario analysis

including the need to change management plans and basic

evolving our business model against social transformation

likelihood of event and the degree of impact. The residual risk

when these become significantly impacted by climate change andstrategies.

towards decarbonization. In addition, as valuations increase forwas then determined by considering the control effectiveness.

important.

   At Hulic, we have been taking actions on strengthening

environmental initiatives for owned properties, we will build a

Opportunities were also evaluated based on the likelihood ofearthquake resistance and disaster prevention measures of ourcompetitive advantage in the leasing and development businesses.

properties, as well as implementing environmental initiatives

Furthermore, for the environment-related business field, we will

including decarbonization. As a result, we have found no potential

seize opportunities in providing new products and services.

financial impacts that were deemed large related to both transition

Businesses subjected to climate change scenario analysis■ Real estate leasing business■ Real estate development business, Value-added business■ Environment-related businessTime Horizon for the Short, Medium, and Long-term

Businesses excluded from scenario analysis■ Tourism-related business■ New and other businesses

Process for Identifying Businesses with Large Impact from Climate Change

While the real estate industry makes business plans looking 10

clime change effects in conformity with timeline of our long-term

years into the future, the effects of climate change will likely

vision for the environment, as well as the target years set by the

become apparent over a far longer period. We have established

Paris Agreement and Japanese government.

Environmental Initiatives

Strategy
Hulic aims to maintain sustainable growth, while mitigating and

Our Approach to Sustainability

Environmental Initiatives

short-, medium- and long-term time horizons when analyzing the

Hulic's management and business time
horizons

By 2025

By 2030

By 2050

Short-term

Medium-termLong-term

5 years

10 years

30 years

Phase I

Phase II and III

Reduce CO2 emissions
by 40%

Reduce CO2 emissions
by 45%

Reduce CO2 emissions
by 100%3 years

10 years

By 2022

By 2029

Social Initiatives

Hulic's climate change time horizon:
confirming with Hulic long-term vision for the environment
and CO2 emission reduction target

Medium- and Long-Term Management Plan
(2020-2029)

We are revising our related KPIs as we have brought forward the target years of net zero CO2 emissions and RE100, respectively from our
Corporate Governanceinitial plans.

Financial Impact of Climate Change
In assessing the financial impact of climate change, we used

95.6 billion in FY2020 and a forecasted JPY 100 billion in FY2021.

consolidated ordinary income among other earning indicators

For classifying impact, we referenced criteria for revising earnings

including net sales, operating income, ordinary income, and profit

forecasts, a 30% increase or decrease in the consolidated ordinary

attributable to owners of parent as it is especially important key

income forecast among the "important matters" of the timely

earning indicator for us. We have set the following criteria based

disclosure standards of financial instruments exchanges and set

on the latest financial results of consolidated ordinary income: JPY

such impact as “large”.

54

Impact Classification

Ratio to Consolidated Ordinary Income

Amount / YearLarge

30% or higher

JPY 30 billion or more

Medium15% or higher, less than 30%

JPY 15 billion or more, less than JPY 30
billionSmall

5% or higher, less than 15%

JPY 5 billion or more, less than JPY 15 billion

MinimalLess than 5%Less than JPY 5 billion

Hulic Co., Ltd. Sustainability Book 2021

External Evaluation

Financial impact matrix

Hulic Co., Ltd. Sustainability Book 2021

55

Environmental Initiatives

Our Approach to Sustainability

Overview of Two Scenarios

Evaluation of Climate Change-related Risks and Opportunities
1. Identifying key drivers of material risks and opportunities
As a pre-process for selecting a group of climate change scenarios,(factors that could have a significant impact on our business). At

for each type of climate change risk and opportunity according to

the same time, we excluded risks and opportunities that were

TCFD, we identified the key drivers of risks and opportunities that

deemed less impactful and relevant. Identified key drivers of risks

could be important to our business and our major stakeholders

and opportunities were as below:

Key Drivers of Identified Risk

Type according to TCFD
Risk Category

Transition
Risks

Drivers

Risk Type

Environmental Initiatives■ Key driver: F actors that are likely to have a large impact on Hulic business and as such parameters
were collected when creating scenarios
Identified Key Drivers

・Strengthened CO2 emission
・Primary energy reductions
regulations
・Carbon pricing
・Increased CO2 emission pricing
・Negative emission policies
Policy and Legal・Strengthened energy saving standards ・CO2 emission control regulations on buildings
・Increased subsidies to promote net
・Disclosure of energy-saving performance
zero CO2 emissions from buildings
・ZEB/renewable energy subsidies

Technology

・Advances in building equipment
technologies
・Advances in clean energy supply
technologies

・Advances in fireproof wooden construction technologies andcost fluctuations
・Advances in ZEB technologies and cost fluctuations
・Advances in renewable energy and cost fluctuations
・Advances in storage battery technologies and cost fluctuations

Acute・Increase in natural disasters

・Increase in torrential rains
・Increase in typhoons
・Increase in flooding

Chronic

・Chronic climate change

・Increase in average temperature・Rise of sea level

Physical Risks

Social Initiatives

Society (Market, ・Increased awareness of environmental
・Changes in company or tenant behavior
Reputation)issuesKey Drivers of Identified Opportunities
Identified Key Drivers

・Advances in clean energy supply technologies
・Reduced CO2 emissions
Resource Efficiency
・Advances in building equipment technologies

・Advances in renewable energy and cost fluctuations
・Adapting to the possibility of increase in expense due to theintroduction of carbon taxes
・Advances in fireproof wooden construction technologies andcost fluctuations
・Advances in ZEB technologies and cost fluctuations
・Advances in storage battery technologies and cost fluctuations

Energy Source

・Development and use of renewable energy

Products andServices

・Increasing demand for products and services that
・Rise in asset value and rents of environmentally friendly
support disaster prevention and energy conservation buildings
・Growing need for renewable energy and increasing ・Advances in ZEB technologies and cost fluctuations
revenue opportunities from selling electricity
・Energy conservation and renewable energy cost fluctuations

Markets

・Creation of new markets that contribute to theresolution of climate change
・Increased opportunities for collaborative projects
with governments, municipalities, and privateorganizations to realize a carbon-free society

・Advances in renewable energy and cost fluctuations

・Improved competitive advantage of environmentally friendly
buildings
・Increased profits from new market entry
・Profit opportunities through collaborative projects

The TCFD recommendations propose explaining the resilience of our

2°C or lower scenario and a business as usual scenario by referring

company strategies in light of an analysis based on different climate-multiple climate change scenarios that include key drivers for the

related scenarios including a 2°C or lower scenario. We formulated amaterial risks and opportunities that were identified.

Hulic Co., Ltd. Sustainability Book 2021

*2 Temperature rises from 3.8°C to 6.8°C between 2081 and 2100 in scenarios without additional measures/responses for climate change mitigation and adaptation

The following is a group of climate change scenarios for which

values when the parameters for the exact length of time were notparameters for the identified key drivers were collected whenfound in a scenario group.

formulating climate change scenarios. We also used estimated
Referenced Major Climate Change Scenarios[Transition Risks] Policy and legal, technology, market, society, reputation
Document nameBusiness as usual scenario

2°C or lower scenario

International Energy Agency(IEA)

Organization nameWorld Energy Outlook 2019

CPS (Current Policies Scenario),
STEP(Stated Policies Scenario)

SDS (Sustainable Development
Scenario)

IEA

Perspectives for the Clean Energy
Transition, The Critical Role of
Buildings (2019)

NPS (New Policies Scenario)

FTS (Faster Transition Scenario)

2 Degrees Investing

The Transition Risk-O-Meter:
Reference Scenarios for Financial
Analysis (2017)

LCT (limited climate transition
ACT (ambitious climate transition
with 3-4°C decarbonation range)
with 2°C transition) Scenario
Scenario

Institute for Global
The “net zero world” in 2050
Environmental Strategies (IGES) Japan (tentative plan)(2020)

2. Formulation of climate change scenarios

56*1 For scenarios where the global average temperature rise is limited to 2°C or lower with at least 50% rate by 2100, the TCFD recommended it is imperative that one of the climatechange scenarios be a 2°C or lower scenario

Corporate Governance

Drivers

Opportunity Type

Lock-in scenario

Transition scenario

Hulic Co., Ltd. Sustainability Book 2021

External Evaluation

Type according to
TCFD

57

Environmental Initiatives

Document nameBusiness as usual scenario

2°C or lower scenario

The Intergovernmental
Panel on Climate Change(IPCC)

Representative Concentration
Pathways (RCP) Scenario of Fifth
Assessment Report (AR5)RCP8.5

RCP2.6

Ministry of theEnvironment, Japan
Meteorological Agency,
etc.

Climate Change Observation,
Forecast and Evaluation Integrated
Report 2018

Forecast for annual averagetemperatures across Japan based on
IPCC AR5 RCP8.5

Forecast for annual averagetemperature across Japan basedon IPCC AR5 RCP2.6

Climate Change
Adaptation Information
Platform (A-PLAT)

Observations by meteorologicaloffices, etc.

RCP8.5

RCP2.6IPCC

The Ocean and Cryosphere in a
Changing Climate (2019)

RCP8.5

RCP2.6

Aqueduct

Aqueduct Flood (2020)

Business as usual, RCP8.5, SSP2

Optimistic, RCP4.5, SSP2

Ministry of Land,
Infrastructure, Transport
and Tourism, TechnicalStudy Group on HydraulicControl Plans Based on
Climate Change

Hydraulic control plan based on
climate change (2019)

RCP8.5

RCP2.6

Environmental Initiatives

Organization name■H
 ulic’s Basic Strategies

Our Approach to Sustainability[Physical risks] Temperature rise, sea level rise, natural disasters (typhoons, floods, wind damage)

3. Risk and opportunity assessment
To examine the impact of climate change risks and opportunities on Hulic’s strategy, we evaluated transition risks and opportunities in the

Corporate GovernanceSocial Initiatives

2°C or lower scenario and physical risks and opportunities in the business as usual scenario.

2°C or Lower Scenario Transition Risks and Opportunities
The financial impact of climate change risk was assessed greatest

evolving our business model based on current Medium-and Long-in the “medium-term” on the time horizon with the degreeterm Management Plan against social transformation towardsof impact at that time was assessed “medium.” On the otherdecarbonization by leveraging our motto of “Driving Innovation

hand, the financial impact of climate change opportunities

and Accelerating Progress.” In addition, as valuations increase

was assessed greatest over the “long-term” and the financial

for environmental initiatives for owned properties, we will build a

impact at that time was assessed “large.” Under the 2°C orcompetitive advantage in the leasing and development businesses.

lower scenario, we concluded that we will be able to continue

Furthermore, for the environment-related business field, we will

improving our corporate value through risk mitigation by flexibly

seize opportunities in providing new products and services.

■ Continue on the basic strategies of current Medium-and Long-term Management Plan (further develop and evolve our[Risk]:
・Ability to promptly respond to a wide range of policies andregulations introduced as climate change countermeasures

58

Hulic Co., Ltd. Sustainability Book 2021

[Opportunity]:
・Environmental measures implemented at Hulic-owned
properties become highly valued as social transformation
occurs・Opportunities to entering new markets that help mitigate
climate change will be createdExternal Evaluation

business model based on the real estate leasing business)*Stages I, II, and III: displays progress in stages.

Hulic Co., Ltd. Sustainability Book 2021

59

Business as Usual Scenario Physical Risks and Opportunities
Physical risks become apparent as greenhouse gas emissionsacquired, as well as the mitigation of physical risks through designmodel based on current Medium-and Long-term Management Plan against social transformation towards decarbonization by leveraging

continue to climb and climate change remains unmitigated.

standards and disaster prevention measures in Hulic properties.

our motto of “Driving Innovation and Accelerating Progress.”

However, the financial impact of climate change has been

Looking at our opportunities, we believe that there will be no

estimated as “minimal” on the back of a detailed examination offinancial impact as we do not expect any additional opportunities

natural disaster risks conducted when properties are developed orfrom climate change.

・In addition, as valuations increase for environmental initiatives for owned properties, we will build a competitive advantage in the leasing
and development businesses. Furthermore, for the environment-related business field, we will seize opportunities in providing new products
and services.

■ Maintain current priority area, location policy and portfolio composition by use as described in the current Medium-and
Long-term Management Plan
[Risks]:・Physical risks, such as natural disasters due to climate change,
will become apparent[Opportunities]:
・Opportunities up to 2030 have already been incorporated
into the Medium-and Long-term Management Plan
・No additional opportunities pertaining to climate change
after 2030 and therefore no financial impact■ Conclusion:・Sea level rise: The assumption that average global sea levels will rise 0.45 to 0.82 m* after 2081 is out of scope
1・Temperature rise: The increase in air-conditioning-related costs (costs for improving air-conditioning equipment and utility costs due to risingtemperatures) is minimal

Environmental Initiatives■ Conclusion:・We concluded that we will be able to continue improving our corporate value through risk mitigation by flexibly evolving our business

Our Approach to Sustainability

Environmental Initiatives

・Flood damage (typhoons, torrential rain, floods, inland water, storm surges): Minimal due to measures already taken・Wind damage (typhoons): Considering past typhoon damage experiences, the impact was determined to be minimal

Risk Scenario

Average global sea levels rise 0.45 to 0.82
Sea level rise m*1 (comparison with the 1986–2005
average in 2081–2100)
Chronic
Risk

Temperature Japan's temperature rises 1.1 to 3.1
rise
degrees Celsius (2031–2050)

Occurrence

Evaluation on
Financial Impactof Climate
ChangeFlooded/submerged

Out of scope ofanalysis

Basis for Financial Impact
Assessment
Not applicable to the time
horizon (up to 2050)-Increased cost of
air-conditioning
equipment
expansion-Increased
energy costs

MinimalIf temperature rises +3.1°C in
2030:
・Increase in costs related toair-conditioning equipment
expansion: Minimal
・Energy cost increases: Minimal

Flood damage

MinimalDamage caused by pasttyphoons: Minimal

Number of typhoons approaching Japandecreases or pattern changes
Typhoons

Acute
Risk

Financial impact matrix

60

Impact Classification

Ratio to Consolidated
Ordinary Income

Large

30% or higher

JPY 30 billion or more

Medium15% or higher, less than 30%

JPY 15 billion or more, lessthan JPY 30 billion

Small

5% or higher, less than 15%

JPY 5 billion or more, less than
JPY 15 billion

MinimalLess than 5%Less than JPY 5 billion

Hulic Co., Ltd. Sustainability Book 2021

Amount / Year

There is a strong possibility that thefrequency of severe typhoons (category 4
or higher, maximum wind speed 59 m/s
or higher) will increase over the southernseas of Japan

Storm surgeHigh tides with a recurrence period of
100 years occurs every year (2050–2070)

Flood damage

Minimal

Implementing countermeasures
for flood damage

Torrential
rain

Increased frequency of short-term heavy
rainfall in all regions and seasons

Flood damage

Minimal

Implementing countermeasures
for flood damage

FloodsFrequency of flooding quadruples (2100)

Flood damage

Minimal

Implementing countermeasures
for flood damage

Flood damage

Minimal

Implementing countermeasures
for flood damage

The frequency of inland flooding
Inland waters increases in proportion to increase intorrential rains

Hulic Co., Ltd. Sustainability Book 2021

Corporate Governance

Risk
Event

External Evaluation

Types of
Risk

Social Initiatives*1.Compared wirh1986 –2005 average. Shown as highly likely in the IPCC RCP8.5 scenario

61

Metrics and Targets
Hulic identifies materiality and the Sustainability Committee sets

progress by reviewing results.

key performance indicators (KPIs) for each materiality and evaluates

Climate change KPIs, results and progress assessments are as follows.
Assessment

KPIs

Specific Targets

Coverage2020◎:achieved〇:progressed

Reduce CO2 emissions(The base year: 2013)
40% by 2025
45% by 2030
100% by 2050

156 major
properties*2

27%
reduction〇

4% in 2021
30% in 2022
35% in 2023
70% in 2024
100% in 2025

Electricity usedin Hulic Groupbusiness activities

0.5%

〇

One or more times
annually

Hulic Co., Ltd.

1 time◎management status and response, and oversees the efforts to

Number of Environmental Advisory One or more times
Council held
annually

Hulic Co., Ltd.

1 time◎address issues and the targets set.

The following are managed as other related indicators.

is in charge of matters related to climate change, leads theidentification of risks and opportunities and monitors the effects
of climate change in conjunction with related departments within

CO2 emission*1 reduction target

Hulic and Group companies. In addition, appropriate measures
are considered and reports and recommendations are submitted
to the Sustainability Committee at least once a year.
   The Sustainability Committee deliberates and evaluates the

RE100 achievement rate*3

reported impacts of and recommended responses to climate change.
Risk assessments are reported at least once a year or as needed to
the Board of Directors, along with other climate change matters

Number of times the Sustainability
Committee engaged in climatechange monitoring

deliberated and coordinated by the Sustainability Committee.
   The Board of Directors receives reports from the Sustainability
Committee on climate change matters, including the risk

Related Indicators
Annual generation of renewable energy

Mechanism for Managing Climate Change Risks
The Business Planning and Management Department, which is in

for minimizing the identified risks and reflecting them in planning,

charge of matters related to climate change, engages in planning,budgets and targets. The status and response to risk management

proposals and management related to climate change, including

deliberated and coordinated by the Sustainability Committee isthe process of identifying and assessing the impact of climate

reported, along with other agenda items, at least once a year or as

CO2 emission*1 reduction target

Specific Numerical Values and Targets
Approximately 60 GWh (annually)
Approximately JPY 60 billion(cumulative amount by 2030)

We are revising our related KPIs as we have brought forward the target years of net zero CO2 emissions and RE100, respectively from ourinitial plans.
*1 The reduction rate is calculated by comparing CO2 emissions intensity in 2013 as the base year.

change, the mechanism for managing identified impacts and theneeded to the Board of Directors.

mechanism for their integration into Group-wide risk management.

   The Risk Management Committee meets regularly to evaluate

The Department also submits reports and recommendations toreports and recommendations from each risk management*2 The boundary of properties is the buildings in which the Company's share of the total floor area is 50% or more (excluding residential use and real estate for sale). This includes
properties for which we do not have energy management rights. Energy consumption included are electricity, city gas, heat, and regularly used A fuel, kerosene and LPG. We haveaggregated equivalent of the Company’s share of the total floor area for the shared ownership properties. CO2 emission intensity is calculated by using the aggregated floor area of theproperties in the boundary as the denominator.

the Sustainability Committee and promotes Group-wide responses

department, discuss Group-wide risks and take appropriate*3 Targets are set according to the amount of power generated by Company-owned non-FIT solar photovoltaic equipment during the target year divided by the total amount of electricity
used at the Hulic head office building and on the floors occupied by Group companies in one year (an estimate of final target year).

to climate change. It also plays a role in integrating the impact

measures, and reports to the Board of Directors. When there areof climate change into Group-wide risks by submitting reports

reports or recommendations regarding the impact of climate change,

and recommendations when necessary to the Risk Management

the Risk Management Committee will determine appropriate

Committee regarding the identified impacts of climate change.

measures from the perspective of Group-wide risk management.

CO2 Emission Reduction Target   The Sustainability Committee deliberates and evaluates the   The Board of Directors receives reports on climate change

In accordance with Hulic’s long-term vision for the environment,

hydroelectric plants. Electricity derived from non-FIT renewable

reported impacts of and recommended responses to climate change.

risk management and responses from the Sustainability and Risk

we established medium- to long-term targets for climate change toenergy generated by Hulic-owned power sources will be supplied

In addition, deliberations and coordination are made to adapt toManagement Committees, and oversees such risk management andreduce CO2 emissions from all Company-owned lease properties*1

to our properties by Hulic Property Solutions, a Group company

responses.

to net zero by 2030. Hulic believes that it is important to takeretail electricity supplier (Power Producer and Supplier, “PPS”). We

actions to combat climate change by reducing CO2 emissions inplan to only use renewable energy sourced electricity generated by

Scope 1 and 2 as well as throughout the value chain.

Hulic-owned power sources to supply approximately 310 GWh (an   In addition to utilizing environmentally friendly technologies

estimate in 2030) of all electricity used annually by our properties.

in our properties and reducing energy consumption by promoting

When this target is achieved, electricity-derived CO2 emissions willenergy conservation, we will invest a total of approximately JPY

become net zero for tenants in our properties.

60 billion in developing photovoltaic power generation that does   We recognize, that going forward, the growing importance

not use the FIT system*2, and small hydroelectric plants. Hulicof taking actions against climate change through CO2 emission

entered the photovoltaic business using the FIT system in 2012,

reductions across the entire value chain, along with the reduction

climate change, including the formulation of policies and strategies
Organization/Department

Function

Board of Directors

・Receives reports on climate change risk management and responses from Sustainability and Risk Management Committees,
and oversees such risk management and responses

Sustainability Committee

・Deliberates and evaluates the reported impacts of and recommended responses to climate change
・Deliberates and coordinates in order to adapt to climate change, including the formulation of policies and strategies forminimizing the identified risks and reflecting them in planning, budgets and targets
・The status and response to risk management deliberated and coordinated by the Sustainability Committee is reported
regularly and as needed to the Board of Directors

Risk Management Committee ・Determines appropriate measures from the perspective of Group-wide risk management and reports to the Board of Directors

Business Planning andManagement Department

62

Amount of investment in renewable energy
generation facilities

Related KPIRE100 achievement rate*3

Major related SDGs

Environmental Initiatives

The Business Planning and Management Department, which

Hulic Co., Ltd. Sustainability Book 2021

・Engages in planning, proposals and management related to climate change, including the process of identifying and assessing
the impact of climate change, the mechanism for managing identified impacts and the mechanism for their integration into
Group-wide risk management
・Promotes Group-wide responses to climate change
・Submits reports and recommendations to the Sustainability Committee and Risk Management Committee

Social Initiatives

Mechanism for Identifying and Assessing Climate Change Risks and Opportunities

Key Performance Indicators (KPIs)

Rationale for each KPI

and in 2020, we started developing photovoltaic equipment thatof electricity-derived CO2 emissions from our Group through thedoes not use the FIT system (non-FIT), as well as developing small

achievement of RE100.

Corporate Governancewhich is chaired by the President and Representative Director, under the oversight of the Board of Directors.

External Evaluation

Risk Management
Matters related to climate change, including risk management, are centrally deliberated and coordinated by the Sustainability Committee,

Our Approach to Sustainability

Environmental Initiatives*1 Excludes single-tenant lease properties, residential properties and unmanaged shared properties for which we do not manage energy, and real estate for sale.
*2 A feed-in tariff (FIT) system for electricity that requires utility companies to purchase electricity generated using renewable sources for a certain period of time at a price specified by thenational government.
FIT electricity is not considered renewable energy as a portion of the cost of the electricity purchased by a utility company is added to the consumer’s bill so the tax payer must bearsome of the costs. Therefore, achieving the 100% goal with FIT electricity is not considered RE100 by definition.

Hulic Co., Ltd. Sustainability Book 2021

63

Environmental Initiatives

RE100 stands for “Renewable Electricity 100%,” a global initiative

retail electricity supplier (PPS), Hulic Property Solutions, to buildings

aimed at using only renewable energy as the source of electricity

occupied by Group companies. We plan to provide all of theused in business activities.

approximately 60 GWh of electricity used annually by Group   Hulic joined RE100 in 2019, and in 2020, started to develop

companies from Hulic-owned renewable energy sources by 2024,

photovoltaic equipment that does not use the FIT system (non-and in order to achieve that goal we set progress target for each

FIT). Electricity derived from non-FIT renewable energy generated

fiscal year as a milestone. When RE100 is achieved in 2024, Hulic

by Hulic-owned power sources will be supplied by Group company

Group’s electricity-derived CO2 emissions will become net zero.

Our Approach to Sustainability

RE100 Achievement Rate

Number of times the Sustainability Committee engaged in climate change monitoring and number ofEnvironmental Advisory Council held
Organization
Sustainability
Committee
Environmental
Advisory Council

Environmental Initiatives

We have set the above as KPIs with the aim of confirming the operational status of corporate governance related to climate change.
Confirmation of operational status
・Evaluates the impacts of climate change on business, and takes steps to mitigate identified risks and generate
opportunities
・Sets KPIs for sustainability, including climate change, reviews performance and manages progress
・Top management directly discuss and receive advice and suggestions from external advisors on our initiatives
related to environment including climate change

Total energy consumption and CO2 emissions were as follows.

criteria for Scope 1 and 2 emissions as well as Scope 3 emissions

Please visit the Hulic website for details regarding the calculation

throughout the entire value chain.

Status of Greenhouse Gas Emissions
https://www.hulic.co.jp/en/sustainability/ecology/warming/greenhouse_gas.html

2013(the base year)

Total energy consumption (GJ)

1,168,688

This page is intentionally left blank.
The Social Initiatives start from the next page.

2016

2017

2018

2019

2020

1,339,691

1,587,269

2,191,667

2,489,021

2,140,340

Scope 1 (total)

25,202

47,951

51,942

68,62791,50585,395

Scope 2 (total)

1,143,486

1,291,740

1,535,327

2,123,040

2,397,517

2,054,946

1.7

1.4

1.5

1.7

1.6

1.6

CO2 emissions (t-CO2)

66,552

68,92680,028103,338

110,163

95,477

Scope 1 (total)

1,266

2,154

2,332

3,196

4,532

4,593

Scope 2 (total)

65,287

66,772

77,697100,142

105,63190,883

Total energy consumption intensity(GJ/m2)CO2 emissions intensity (kg-CO2/m2)
Total floor area (m2)
Number of properties that are in theboundary
Energy consumption included

96.8

73.8

78.0

79.7

72.1

70.6

687,756

934,243

1,025,891

1,295,832

1,528,972

1,351,869

115

129

149

161

164

156

Corporate GovernanceWEB

Social Initiatives

Total Energy Consumption and CO2 Emissions

・City gas ・A fuel oil (regular use) ・Kerosene (regular use) ・LPG (regular use)
・Electricity: includes properties for which Hulic does not have energy management rights
・District Heating and Cooling (DHC)

Related Indicator

Related KPI

Annual generation of renewable energy

RE100 achievement rate

External Evaluation

Other Related Indicator
Result (kWh)2020
283,759

Notes
Total energy consumption, CO2 emissions (total of Scope 1 and Scope 2) and CO2 emissions intensity (kg-CO2/m2) in 2020, which are marked with, have been assured by an independent
third-party assurance provider.
We do not track greenhouse gas emissions other than CO2 because they are considered to be extremely limited due to the nature of our business.
For gases other than CO2, within the emission levels (CH4, N2O, HFC/PFC, SF6) stipulated in the GHG Emissions Accounting, Reporting, and Disclosure System (Act on Promotion of Global
Warming Countermeasures), Hulic manages the amount of permissible leaks as an administrator based on the Act on Rational Use and Proper Management of Fluorocarbons. Note that we
do not report or disclose this data as the amount of leaks is below the reporting standards.

64

Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021

65

internal seismic energy is absorbed to reduce the intensity ofshaking to 10%-50% compared to other general earthquake-shaking from half to one thirds compared with other general

resistant structures as a general building structure. Anotherearthquake-resistant structures. In addition to the case offeature of this structure is that how a building shakes during an

increasing the safety further by combining this with a earthquake-

earthquake does not differ significantly between upper floors andabsorbing structure, we preferentially employ the earthquake-lower floors of the building. We actively introduce this structure to

damping structure in the case that the earthquake-absorbing

office buildings.

structure is physically unavailable due to constraints including land
contours. Hulic has incorporated this method in many properties.

We are constantly working to generate new added value by offering properties that aresuperior in terms of safety, environmental performance, and convenience.
In addition, we have established various emergency and disaster scenarios, for which we havecreated measures to improve the structural performance of our buildings, as well as operationaland management aspects of buildings.

Hulic considers the countermeasures for earthquake are one ofstandards, stricter than those in the Building Standards Act, arethe top priorities for a real estate developer in Japan as it is one ofadopted for all the buildings we develop and reconstruct, including

the countries where earthquakes most frequently occur. To ensure

offices, commercial facilities, hotels, Japanese-style inns, residential

continuity for our customers and our business operations in thehomes, and others.

buildings we provide—so that tenants can conduct social activities   Furthermore, we plan to develop another 100+ properties with

with peace of mind—we have established in-house earthquake

the in-house earthquake resistance standards during the current

resistance standards. Our earthquake-resistance standards ensure

Medium- and Long-Term Management Plan which ends in 2029.

building performance that can safeguard human life and enable

Along with environmentally friendly features including net zerocontinued use of the building with post-earthquake repair in theCO2 emissions, we aim to provide safety and peace of mind to ourevent of an earthquake with a seismic intensity of seven. Our

customers by securing earthquake resistance of our properties.

commercial buildings.
General Building

General Building

Earthquake-Absorbing Structure

Earthquake-Damping Structure

Environmental Initiatives

Thorough Implementation of an Earthquake Resistance Diagnosis and Seismic Reinforcement

Hulic uses this method not only in offices but also in hotels andDeforming
laminated rubber

Liquefaction Countermeasures
After the Great East Japan Earthquake, extensive regions including

with possible liquefaction. However we concluded that thesecoastal areas in Tokyo suffered from liquefaction, which caused

buildings were not significantly affected by liquefaction due to the

Earthquake Resistance Diagnosis, Reinforcement Works,
and Confirmation of Validity of Structural Calculation

damage such as buildings leaning over and sinking. According tofact that the planning of appropriate building foundations befitting

the liquefaction map issued by the government, it was found thatthe sites.

We diagnosed the earthquake resistance of all our properties

eight buildings owned by the Company were located on ground

Social Initiatives《Results in FY2020》 1
 00% Properties Meeting Hulic's Earthquake-resistance Standards Customer satisfaction: 96.4%

Our Approach to Sustainability

an isolator, seismic energy is absorbed to reduce the intensity of

Shakes violently

Fundamental
ApproachWith earthquake-damping materials installed inside the building,

Shakes lightly

Initiatives for Customers

Earthquake-damping Structures

By isolating the building from the ground with a mechanism called

Shakes violently

Hulic places emphasis on dialogues with our
stakeholders and aims to achieve a society where
people live safely, securely, and comfortably.

Earthquake-absorbing Structures

Shakes slowly and parallelly

ESG

Social Initiatives

were established in the Building Standards Act revised in 1981,

Measures against Water Damage

and all buildings that did not meet the standards were seismicallyreinforced.
Seismic reinforcement using steel brace (Takagicho Center Building)

Proactive Adoption of Earthquake-absorbing and Earthquake-damping Structures
In order to protect human life and functions of facilities from large

When electric facilities are damaged by floodwater, the supply of

in a flood, and examine application of flood control measures topower, which is essential for the use of a building, can stop fortake necessary measures as needed in preparation for localized

an extended period. We investigate the status of buildings withheavy rains caused by climate change and tsunamis caused bypower receiving and transforming equipment and private power

earthquakes.

Corporate Governancethat were built before the new earthquake resistance standards

generators that are installed in floors expected to be submerged

newly constructed buildings. With the aim of protecting customers'

As office buildings, stores, and residences owned by Hulic serve as

and visitors to the buildings, we thoroughly stick to meticulous

lives and contributing to business continuity, we have proactively

the infrastructure for customer's social activities, we are aiming toquality control, careful maintenance, and security to protect assets.

adopted an earthquake-absorbing or earthquake-damping

constantly improve their quality under the philosophy of providing

Depending on the application and scale, Hulic buildings are

structure which is effective at ensuring a high seismic capacity, incustomers safety, peace of mind and convenience.

constructed with barrier-free designs to provide safety, peace ofaddition to other methods to improve the seismic capacity.

In order to satisfy all customers using buildings including tenants

mind and convenience for everyone.

External Evaluation

Efforts toward the Improvement of Customer Satisfaction

scale earthquakes, we have imposed high seismic capacity on

Earthquake-absorbing equipment

66

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67

Customer Satisfaction Survey

Responsible Marketing

We conduct an annual customer satisfaction survey for tenants

results has mainly reflects our plannedof Hulic’s properties. Survey items include matters concerningfacility reinforcement and quick response

Hulic has set out the principle of “treating clients faithfully and   With regard to important company information, we aim tobuilding hardware and software, and things customers haveto the matters requested by customers.

kindly, listening to their requests with sincerity and providing

disclose information with accuracy based on the facts, and innoticed while using our buildings on a daily basis. We carefully

Furthermore, the persons in charge

sophisticated, efficient, and high-quality services” in the Basica way that is easy to understand in accordance with the rules

go over the customer responses, and then take steps to identify

responded or replied to customers'

Principles of Corporate Conduct and endeavors to build positivefor disclosure control. Furthermore, we disseminate information

customer needs and make improvements accordingly. In the survey

requests and opinions after the survey.

relationships with clients. In addition, we obtain the necessary

through various media by creating a company website, publishing60conducted in 2020, we continued to receive high ratings withpermits and licenses for conducting business operations andpress releases in a timely manner, and setting up signboards ata satisfaction level of 96.4% (in 2019, 98.1%). We believe thecomply with matters stipulated by various business laws andtrain stations, with the aim of fostering a feeling of familiarity withregulations.

our company widely among the public.

Our Approach to Sustainability

Social Initiatives

Systematic Implementation of Preventive Maintenance of Buildings and Facilities

Promoting Future Growth Businesses toward Resolving Social Issues

We systematically renovate and upgrade buildings and facilities

work before defects occur in buildings and facilities, with the aim

Hulic views social issues as business opportunities and works

we are engaged in agribusiness, children’s education, and Bizflex

every year, including statutory improvements to buildings andof providing a safe, secure, and comfortable work environment for

together with stakeholders to resolve them. We do this as a(flexible office spaces).

facilities, proactive renovations to ensure energy-saving/up-to-datetenants.

Company that grows with society, and that realizes the creation

facilities, and implementing extensive preventative maintenanceof new value and the resolution of social issues. In addition toWEB

3 future growth businesses(senior citizen-, tourism-, and environment- related businesses)
https://www.hulic.co.jp/en/business/index.html#anc3

businesses related to senior citizens, tourism, and the environment,

Collaborating and Cooperating with Business Partners during and after Disasters
Shibuya PARCO·Hulic Building received Good Design Best 100 Award forfiscal 2020 (issued by Japan Institute of Design Promotion)

Introduction of an Indoor Air Quality Improvement System using Composite Ceramic Functional
Materials

Shibuya PARCO·Hulic Building, a shared ownership building completed in October 2019,

Hulic is working to improve indoor air environments and toearthplus™ material with humidifiers that optimally maintainowns the office part of the building. The three-dimensional street that runs aroundpromote the adoption of technologies from Shinshu Ceramics

indoor humidity when using indoor heating. The goal is to develop

the outside of the building has been highly praised for creating an experience akin toCo., Ltd., a company with unique technologies. HEPA filters

a new indoor air improvement system that can be installed inwalking around the city, etc., even though it is only part of a building. This resulted inincorporating Shinshu Ceramics' proprietary earthplus™ material

ceilings, which we plan to integrate into a nursing home currently

the building receiving a Good Design Best 100 award in fiscal 2020.

adsorb 99.9% of and decompose bacteria and virus particles

under construction. In the future, we will promote using these

floating in indoor air. To prevent the spread of infectious diseases

units in our development projects, with the aim of realizing

in facilities for seniors, we have combined HEPA filter units using

facilities that give more consideration to the health of residents.

was redeveloped making use of the Special Zone for Urban Regeneration System. Hulic

ヒューリックJP赤坂ビル

Hulic JP Akasaka Building received highest rank of “S” in CASBEE-Wellness
Office* certification (issued by Institute for Building Environment and建

環

築Energy Conservation)

境

･省

2020

（
エネルギー機構I

the quality ofcompleted in November 2020. Based on the concept of “a wellness space for working people,” wemeetings with property management companies to check theoverall property

focused on creating a better working environment for office workers. The building uses plentiful

implementation status of management work, including complying

management

natural materials and has a facade of greenery walls, a rooftop garden as a space to rest and relax, andwith laws and regulations, and receive reports on various problems

and operation

wooden benches and wooden shelves arranged in a spacious 3.8 meter-high entrance hall complete

related to buildings, including the results of measures to fix defects

services.

with a full wooden ceiling.

Management status reporting meeting with property
management companies

･省

2020

EC

境

I

B

築

the maintenance and improvement of quality, as well as unifying

環）

Hulic JP Akasaka Building, jointly developed by Hulic and Japan Post Real Estate Co., Ltd., was

Hulic regularly holds property management status reporting

建

Holding Regular Management Status Reporting Meetings with Property Management Companies

that have occurred in buildings. In this way, we are promoting

Social Initiatives

collaboration and cooperation in the event of a disaster.

Corporate Governancecompany of building concerning restoration and recovery, enabling

to share information with building management companies. We）

safety confirmation system for swift confirmation of the state and

TOPICSEC

also concluded contingency agreements with the construction

B

In the event of a disaster, we have introduced an Internet- based

Environmental Initiatives

Initiatives for Providing Healthy and Comfortable Spaces（
エネルギー機構* Comprehensive Assessment System for Built Environment Efficiency (CASBEE) assesses the specifications, performance, and initiativesof buildings that support the health and comfort of building users, factors that contribute to intellectual productivity improvement, andthe performance of safety and security.

＜Specific primary evaluation items＞

work and provides property management companies with feedback·C onfirm to check if maintenance work for buildings and facilities,

to improve and standardize the quality of their work.

including complying with legal requirements applicable to buildings,

We use the results of evaluations as information to decide whether

has been performed systematically and thoroughly without

to continue to entrust management work with the current property

omissions as stipulated in the contract.

management companies in accordance with the rules for real estate·C onfirm the status of legal compliance, including the status ofoutsourcing management.

renewing the verification due date of measuring instruments, etc.

External Evaluation

Quality Evaluation for Management Companies
Each year, Hulic evaluates the implementation status of management

and submission of mandatory inspection results reports to therelevant regulatory authorities.
·C onfirm that defects occurring unexpectedly, including those pointedout during the legal inspection, have been fixed without delay.

68

Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021

69

and purchasing to further develop our sustainability initiatives. In addition, we promote sustainability activities across the entire value chain by
applying this policy to business partners as well.

《Results in FY2020》E valuated the status of work implementation of outsourced property management companies

Fair Trades with Outsourced Contractors
Considering long-term business relationships with outsourced

regulations as well as guidances from administrative organizations.

contractors, we work to ensure fair trade with them as a partner

We select an outsourcing contractor that is most appropriate foron an equal footing. Regarding outsourcing by the real estateeach project by checking track record and abilities to executebusiness division, we ensure fair trade based on the rules for real

operations.

estate outsourcing management, respecting related laws andCooperation with Building Management Companies
management conditions once a year based on the rules for real

WEB

Initiatives for Providing Healthy and Comfortable Spaces
https://www.hulic.co.jp/en/sustainability/social/customers/#anc2

estate outsourcing management and and makes a round to provides
guidance to each company based on the assessment results.

Educational Activities through Compliance Training
Our compliance manual (the code of conduct) specifies businessthrough these efforts that providing business entertainment or gifts

entertainment/gift and prohibition of bribery. We implement internal

for business partners in an improper manner may impair appropriate

compliance training in a timely manner to raise awareness among

business relationships and the soundness of business, and that

Hulic promotes the creation of social and economic values throughone of the leading companies of PPP projects. Taking into accountour employees of rules such as prohibiting giving donations, offeringsuch conducts violate our internal rules and regulations and the

Public Private Partnership (PPP) projects from the viewpoint of notchallenges and needs of administrative agencies and communities
through exchanges of information with them, we aim to contribute

Initiatives for PPP projectbusiness entertainment, and giving gifts to public servants or othercompliance manual. Our employees and employees of our businessonly real the estate business but also addressing social needs andinterested parties. Furthermore, twice a year, our Legal & Compliancepartners are encouraged to report any violation of laws or service

challenges.

to the regional economy by settling the issues of the communities

Department monitors whether each department properly manages

disciplines or any other problematic matter regarding compliance   PPP projects intend to efficiently utilize and operate real

and realizing business to improve the value of public real estate

the entertainment of interested parties and the acceptance or

directly to the compliance hotline.

estate owned by national or local governments (public real estate)through collaboration between the public and private sectors.

offering of gifts or other articles. All employees are remindedthrough collaboration and cooperation between the public andprivate sectors. We are actively engaged in PPP projects by utilizing

Framework for Collaboration and Cooperation with Related Parties and Business Partners[Framework for collaboration cooperation with building

to assess destruction status and damages of Hulic’s buildings

management companies]

immediately following a large-scale disaster, and offer full○T he emergency contact network for emergencies during nighttime or on holidays has been established between Hulic andcooperation for the restoration and recovery of our buildings while

a framework for responding promptly to emergencies.
○ W e have introduced a safety confirmation system with real estate

management companies through the Internet for swiftly sharing
information and verifying the extent of damage.
[Framework for collaboration and cooperation with

Cooperative Structure with Business Partners• Quick confirmation of the extent of the damage(internet of a system to confirm safety and using the internet)
HULIC

Agreements

We have concluded contingency agreements with major

HULIC

Hulic Co., Ltd. Sustainability Book 2021

About public-private partnership (PPP) projects
https://www.hulic.co.jp/en/business/other/develop/#anc1

Initiatives for Employees
Human Capital Management
Fundamental
Approach

We aim to create robust and highly productive organization through talent development andmanagement.

 umber of additionally obtained qualifications by employees: 29《Results in FY2020》N

Real estate management companies• Response Aimed at Recovery of Operations Contingency

construction companies]
construction companies under which they agree to cooperate

abundant development track record and a stable business base asWEB

putting the highest priority on ensuring safety.

building management companies. With this network, we maintain70⑥ Reduction of excessive working hours
In addition to ensuring compliance with labor-management agreements,
including the 36 Agreement and laws and regulations of relevant
countries and regions, we adopt basic policies to reduce overtime workand limit excessive work.
⑦ Securing of health and safety of workers
In accordance with laws and regulations of relevant countries and regions,
including the Labor Standards Act, we endeavor to offer a workplace
where workers can work healthily and safely.
⑧ Payment of wages over minimum wage
We pay wages over minimum wages prescribed in various local laws andregulations as well as the Minimum Wage Act.
3. W
 e will take consideration of environmental conservation and will strive
to promote green procurement.
We will endeavor to conduct procurement in accordance with the Hulic
Green Procurement Policy in order to realize a sustainable society.
4. W
 e will build an information management system and manage
information appropriately.
5. W
 e will carry out fair and equitable business transactions and build
trusting relationships with business partners.
6. We will strive to provide safety, peace of mind and high quality.

Corporate Governance

Hulic Building Management Co., Ltd. inspects and evaluates

1. W
 e will comply with laws, regulations and social norms, andundertake business activities based on a set of corporate ethics.
2. We will respect the fundamental human rights of all people.
① Prohibition of discrimination
We prohibit any discrimination against any person on the ground of hisor her belief, religion, age, sex, sexual orientation, race, nationality, origin,physical or mental disability, etc.
② Prohibition of harassment
We prohibit any act, including sexual harassment or abuse of authority,
to inflict emotional distress on any person by language or behavior thatdamages his or her character or dignity.
③ Prohibition of child labor
We prohibit any child labor.
④ Prohibition of forced labor
We prohibit any forced labor carried out through violent acts or
intimidation.
⑤ Respect for the right of freedom of association and right ofcollective bargaining
In line with international labor standards, we respect the right of freedom of
association and right of collective bargaining.

Environmental Initiatives

Hulic actively engages in sustainability activities as a company involved in the real estate industry. We have formulated a policy on procurement

Major construction companies

Initiatives to Create a Highly Productive Organization
Hulic is made up of a small group of elite professionals and this isof our professional staff included first-class architects, real estate

one of our strengths. Our Ordinary Income per employee is overappraisers, lawyers, certified accountant and others.

JPY500 million. We believe that this figure reflected our status as   In order to create a highly productive organization, we place

top-notch among the listed companies in Japan boasting excellent

priority to unbiased talent acquisition, enhance next-generation

productivity. To ensure we remain a group of professionals, we placenurturing support systems and welfare programs, embrace diversity

particular emphasis on human resources development. We have

and work style reform, and advance health and productivity

been encouraging employees to obtain qualifications, and the list

management in addition to talent development.

Hulic Co., Ltd. Sustainability Book 2021

External Evaluation

Fundamental
Approach

CSR Procurement Policy

We aim for close mutual communication with our business partners, and build relationshipsthat mutually enhance the corporate value of both parties. Additionally, Hulic strives to createshared value with stakeholders by resolving various social issues through PPP business.

Social Initiatives

Collaboration with Business Partners

Our Approach to Sustainability

Social Initiatives71

In order for employees to be healthy and fully exercise their abilities, we encourage them tostrike a work-life balance. We take measures to facilitate environment where employees caneasily take paid time-offs and to avoid long work hours.

Improving Talent Development Programs

Providing High Level of Fringe Benefits

Hulic considers talent development to be a top priority that should

Since Hulic maintains a small workforce of elite professionals, webe approached with a long-term perspective in a planned manner.

believe that it is important to give back to stakeholders, including

The managers and the Company strongly support employees in theiremployees, as the Company grows. This commitment to giving《Results in FY2020》 Usage rate of paid leave: 75.5％

efforts in further developing skill-sets and obtaining qualifications byback to employees drives further growth for the Company in what

*The figure marked withsharing the common view on professional development.

we see as a positive cycle.

In addition, we are creating motivating work environment toFundamental
Approach

has been assured by an independent assurance provider.

Work-life Balance

Promoting Internal Communication / Sharing
Corporate Philosophy

The falling birthrate, aging population, and women’s social advancement

employees can make the most of their abilities. Accordingly, we haveon-the-job training and providing employees with opportunities

are important issues for Japan’s economy. With regard to support forestablished an action plan in accordance with the Act on Advancement

so that they can constantly develop new business ideas and take

Hulic has a small workforce, which enables a distinctively close

the next generation, Hulic aims to achieve a higher level than the legalof Measures to Support Raising Next-Generation Children, set targets

on challenges. We have introduced an “elective training” system

distance between each employee, as well as between top

standard and has established various systems in this regard. In addition,

for the development and thorough notification, etc. of the work-life

that allows employees in their second to third years to select whatmanagement and employees, making it easy to communicate

we are working to create employee-friendly environments where allbalance support system, and are conducting activities to these ends.

training to take from FY2021.

within the Company.

employees to boost motivation including posting new hires to

Action Plan based on the Act on Advancement of Measures to Support Raising Next-Generation Children (5th period)
Overview of Talent Development Programs

Period of the plan: September 1, 2019 - December 31, 2023

• P resident’s Message:	The president communicates companywide developments in a message sent out
to all employees every month. This allows
us to understand company philosophy anddevelopments throughout the Company.
• T op Seminar:	Social gatherings with the president are held
once a month for approx. 10 employees
under the age of 40.
• P resident Survey:	We conduct a survey twice a year that allows
all employees to share their thoughts directlywith the president.The President provides
responses to the various opinions deliveredby employees who completed the online
questionnaires.
Information from questionnaires on various
businesses and in-house systems have been
incorporated into management decisionmaking and used to make improvements.
• C areer Development 	Supervisors regularly conduct interviews
Interviews:
with employees to confirm their goals andexpected roles, and to evaluate performance.
• Information is provided on the Company intranet, as needed.

Target 1

Have 100% of eligible female employees and at least one eligible male employee take childcare leave by making it easier to use the system

Presentations on work-life balance systems will be held for childcare leave applicants and their supervisors.
Measures The availability of work-life balance systems will be made more widely known among employees to encourage them to take childcare leave.
Data on work-life balance systems will be periodically collected and reviewed.
Target 2

Raise awareness of diversity management among managers

Measures Seminars on diversity management will be held for managers.

Social Initiatives

Specific methods for communication include:

Support Raising Next-generation Children Initiatives
Establishment of Hulic’s Onsite Childcare Nursery Facility
In 2014, we opened the Odenma Fureai Childcare Nursery insideof neighboring residents, with

the Hulic Head Office Building to promote a more employee-

the intention of contributing tofriendly work environment in which our employees can raise

reducing the number of children

children while working. In addition, to make this childcare

on nursery waiting lists in the local

nursery more accessible, employees using this service are allowed

community.

to drive their cars to work and park them in the Head Office*Conditions for use applied to neighboring children differ from those applied to employees.

Building’s parking lot free of charge. This childcare nursery is not
only available for the employees but also for certain children*

WEB

Odenma Fureai Childcare Nursery website (in Japanese only)
https://hulic.s.digitaldesk.jp/sustainability/social/employee/nursery/

Diagram of Hulic's Next Generation Nurturing Support Program

Survey of Participant Satisfaction with Internal Training Programs
We are conducting a survey of participants in English conversationa five-point scale and to provide feedback on suggestions forclasses and new graduates to improve the content of our training.

improvement. We are also working to improve the content of the

At the end of each training session, participants are asked totraining based on the opinions of the participants gathered.

Environmental Initiatives

Work-life Balance -Creating a Motivating Work Environment-

Corporate GovernanceInitiatives to Create a Small Group of Elite Professionals

Our Approach to Sustainability

Social Initiatives

External Evaluation

rate the content of the training and instructor satisfaction on

Providing Internship Program
We provide an internship program for undergraduate andour identity through acquiring knowledge of real estate developer’s

graduate students at the Head Office Building (or online), intended

affairs and verifying projects. 60 students participated in FY2020.

for understanding of the real estate industry. We offer a program
where the participants can learn about the real estate business and72

Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021

73

Social Initiatives● Work from home*

Employees who have reared a child in or younger than the third grade of elementary school can reduce work hours not exceeding two hours per
day in units of 30 minutes, if they wish.

Exemption of overtime work Employees who have reared a child in or younger than the third grade of elementary school can be exempt from overtime work, if they wish.

● Online conferencing*These were originally intended for employees providing childcare and nursing care, but we expanded eligibility in 2020 to help preventing the spread of COVID-19.

Work Style Reform● Improving the Efficiency of Business Processes and Internal Promotion

Staggered work hours

Depending on necessity, employees can apply for staggered work hours for reasons such as child care.

We check the usage status of paid leave and implementation status of No Overtime Day as appropriate, in addition to create a holiday calendar for eachJob-return system

An employee who retired due to marriage, childbirth, childrearing, and nursing care, etc. can return to work under the same working conditionsas at the time of retirement.

employee, and hold discussions on working style at each department. In addition to accurate time management using system logs, etc., we work to reduce

Celebration money on
auspicious occasions(marriage, childbirth)A special payment for marriage of 100,000 yen is given to employees regardless of their service years.
A special payment for childbirth is given to employees: 100,000 yen for the first child, 200,000 yen for the second child, and 1,000,000 yen for
the third child and thereafter.

promotion according to guidance and advice through the Health Committee.

Childcare Center Subsidy
SystemSubsidize part of the childcare center fee until a child enters elementary school. A monthly payment is up to 30,000 yen for one child. (Thisamount applies not only to the first child, but also the second child and thereafter.)
Subsidy for extended daycare nursery hours.

Subsidy for costs associatedwith caring for a sick child

Up to 5,000 yen is paid per day per child, for a maximum of 5 days per month, until the child reaches the end of the third year of elementary school.

Company daycare nursery
inside the Hulic head officebuilding

Hulic has established nursery facilities at its Head Office for employees. Both monthly and temporary childcare services are available at the facilities.
Employees using these services may drive to work and park their cars at the Head Office Building.

Babysitter Program

When an employee use services of a babysitting business operator which has a corporate contract with Hulic Group, the entire enrollment fee of
21,000 yen, the annual fee of 10,500 yen, as well as the monthly fee up to 15,000 yen per child are subsidized, in addition to the provision of
discount tickets and coupons.

Subsidy for the cost of Kids’
Club

Up to 50,000 yen is paid per month for a child until the end of his/her third year of elementary school.

Child care leave (Previous
nursing care leave wasincorporated in child careleave.)

It is applicable during the period from when a female employee found out her pregnancy to when she takes maternity leave in the case it isdifficult to work due to pregnancy complications, etc.
It is applicable when it is necessary for an employee (regardless of gender) to nurse a sick child younger than fourth graders or to participate in
the events of nursery school or elementary school.
Child care leave is available for up to 10 days (in case of one child) or up to 15 days (in case of two children or more) a year and can be taken in
one-hour increments.

Work from home system

Possible to work from home for the purpose of childrearing or nursing care and this system can be used in full days or half days.

Other support programs
including support for
employees during maternity
leave and upon their return
to work

As a result of various initiatives, the usage rate of paid leave remained

Wednesday, we encourage employees to leave work on time. In addition,
we adopt morning-oriented work arrangements in summer.
● Promoting the Use of “Plus-one” Paid Leave and Consecutive Paid Leave

Promoting the use of paid leave before and/or after Saturdays, Sundays,
once a year respectively.
● Implementation of “My Friday”

We encourage employees to take a half day off on Friday afternoon oncea month.
● Morning Work (Staggered Working Hours)

Following the initiative led by the government to promote changes inlifestyles with the arrival of summer, Hulic encourages employees to arrive
at work one hour earlier than usual between May and October.

There is nothing better than for all employees to be healthy every day.

Employees can use the internet-based “Childcare wiwiw Program(*)” which supports employees from the period prior to maternity leave up to
their return to work. (We also provide courses for male employees. The spouses of male employees are allowed to use the this Program too.)*The service is provided by wiwiw Inc. Representative services are described below.
·Service which supports communication between the employee and his/her boss
·Periodic messages about child care and returning to work and information services such as handbooks for maternity leave, childcare leave, andreturning to work
·Online courses, 24-hour telephone counseling and other services
Publication of parents’ childcare support handbook

level. At that same time, we also received

Kurumin certification in 2020 from the Minister of Health,

Kurumin certification for the third time (inLabour and Welfare as a Company that supports employees in2010, 2017 and 2020).

Diverse Work Styles

74

7５.5

36.8

37.4

37.5

37.３

50
40
30

40

20

20

10

0

2016

2017

Usage rates of paid leave*The figure marked with “

2018

2019

0
20２０（FY）

Monthly avarage of disretionary overtime per person” has been assured by an independent assurance

provider.
*The usage rate of paid leave is calculated by dividing the number of days of paid
leave used in the year by the number of days of paid leave granted in the year.
The number of days carried over in the year are excluded.

pandemic, and after 2020, we expanded eligibility for these systems

designs aimed at realizing diverse work systems so that eachas part of our flexible response against the spread of COVID-19.

employee can make the most of his or her abilities. We had alreadyWe also launched a DX Project Team and started to consider

introduced a work from home system and staggered office hours

specific measures. We will take measures such as taking surveys

system for employees providing childcare and nursing care prior to thefrom employees as needed on issues that come to light.

shown below. We wish that such preparations for this possibility
will lead to the creation of a secure and comfortable company for
employees.

System

Support for the
bereaved, etc.

Details
When an employee who died while in office or retired due to disability has children, and his/her unemployed spouse who rears thechildren wants to work at Hulic Co., Ltd. or its group companies, the job opportunity is offered.
When an employee who died while in office or retired due to a disability has children younger than 22 years old, a scholarship of
150,000 yen a month is paid per child. (According to the application for extension, it is possible to pay for up to one year.)
When an employee dies or becomes disabled while in office, condolence money or a special solatium is paid to the bereaved family or
the employee.
In the case of a death, condolence money up to 10 million yen is paid.
In the case of a disability, a special solatium equal to the amount of condolence money is paid. This payment is different fromcondolence money according to the contents of the "accident compensation rules".
If, while in office, an employee or his/her spouse, child, or parents dies, 20,000 yen - 200,000 yen is paid.

Congratulatory or
If, while in office, a house in which an employee lives is damaged by natural or accidental disasters, 100,000 yen - 1 million yen is
condolence payments paid to an employee who owns his/her house, and 50,000 yen - 500,000 yen to an employee who does not have his/her own house,depending on the scale of damage.

Special solatium for
injuries and diseases

We are promoting the development of environments and system

Hulic Co., Ltd. Sustainability Book 2021

37.6

78.5

we will support the employee and his/her family through the systems

Condolence money

Platinum Kurumin Certification
raising the next generation at a distinctive

60

71.6

77.0

However, If something unexpected happens to one of our employees,

TOPICS

Raising Next-Generation Children, we have received Platinum

80

78.3

Efforts to Support the Security of Employees and their Families·Subsidizes 50% of treatment costs excluding subsidies from municipal governments or other sources.
·10-day special leave (paid) can be taken for treatment in addition to paid leave in one-hour increments.

Based on the Act on Advancement of Measures to Support

100

Monthly avarage of disretionary
overtime per person

We have designated Wednesday as a No Overtime Day. On each

Usage Rate of Paid Leave and Overtime Work Hours
Usage rate of paid leaves(%)

high in 2020.
● Implementation of No Overtime Dayor holidays, and the use of a three-day vacation and a one-week vacation

Leave for childbirth of spouse Possible to take a day off in the case of childbirth of spouse (paid).
Next-Generation Support(Infertility Treatment)

long working hours and promote the systematic use of paid leave by monitoring working hours, etc. through the Risk Management Committee and internal

Environmental Initiatives

Reduced working hours/
Limits on overtime work

● Staggered office hours*

Social Initiatives

Special childcare leave/
Childcare leave

Possible to take leave until a child becomes 4 years old.
In case of taking a short-term childcare leave, it is possible to use the first month as a "paid special childcare leave".
A male employee who took a childcare leave once within 8 weeks after childbirth is allowed to take the leave again within the period whenchildcare leave is still available.

Corporate Governance

Details

When an employee, while in office, is hospitalized for five consecutive days or longer due to disease and injury from a freak accident,
special solatium for hospitalization is paid for up to 120 days.
When an employee dies while in office, condolence money of 100,000 yen is paid to a recipient designated by the employee inadvance.

Hulic Co., Ltd. Sustainability Book 2021

External Evaluation

SystemOur Approach to Sustainability

Diverse Work Styles

Details of Next Generation Nurturing Support Program75

Health and Productivity Management

Hulic Head Office Tour for Families
Every year since 2013, we have held the Hulic head office tour for

conductor to the onsite childcare nursery and workplace, also

our employees and their families. The purpose of the tour is toexplaining environmental technologies installed in the Hulic Headhave employees’ families understand the Company by providing

Office Building. After the tour, participants who wished had lunchthem an opportunity to visit the workplace. We also aim to create

at THE GATE HOTEL TOKYO by HULIC, attended by the President.

a comfortable working atmosphere which values families by having

The Hulic head office tours have been cancelled in 2020 and 2021

the entire company rediscover that each employee has a cherished

to help preventing the spread of COVID-19.

Fundamental
Approach

Based on the philosophy that employees’ good health is essential for improving the
productivity and growth of the company, Hulic is promoting the creation of employee-friendly
work environments in which employees can continue to work with enthusiasm and energy ingood health.

《Results in FY2020》Medical checkup rate on employees: 100％
*The figure marked withhas been assured by an independent assurance provider.

family. In the tour conducted in 2019, employees served as a tour

Our Approach to Sustainability

Social Initiatives

Promoting Health and Productivity
Environmental Initiatives

Hulic formulated the Hulic Health Management Declaration described below to implement comprehensive health management.

Hulic Health Management Declaration
Hulic is creating a workplace environment that enables all employees to stay healthy and make the most of their abilities,
and aims to achieve sustainable growth by encouraging each employee to deliver high quality and value with professional
Participants exchange children's name cards with President
Yoshidome

competence.

A briefing at our Head Office

Luncheon at THE GATE HOTEL Tokyo by HULIC

Based on this philosophy, Hulic regards maintaining and promoting the health of employees as a management issue, andimplements health management to remain “a highly productive organization,” while furthering measures it has taken for

We provide various types of support for our employees to allow

easily available to employees managing both work and nursing care.

them to manage both work and nursing care when a family member

Furthermore, we have established the Regulations for Supportingof the employee is in need of care. The time required for nursing

the Combination of Nursing Care and Work to support employees.

care and the degree of seriousness vary depending on individualAs part of these initiatives, the nursing care paid leave wascases. Therefore, we believe that improving environment of thechanged to enable paid time off in one-hour increments from thewhole workplace is indispensable. Based on this notion, we raise

beginning of work hour and throughout the day until the end ofawareness in the workplace so that support from the co-workers iswork hour.

Summary of Program to Support Employees in Striking Balance between Nursing Care and Workpromoting employees’ health.

Manabu Yoshidome
President, Representative Director
Hulic Co., Ltd.

TOPICS
2021 Certified Health & Productivity Management Outstanding Organization(Small and Medium-sized Enterprises Category)Social Initiatives

Supporting Employees in Striking Balance between Nursing Care and Work

Hulic was certified as a Health & Productivity Management Outstanding Organization in 2021 for thethird consecutive year in recognition of our health and productivity management initiatives. The award
has been promoted by the Ministry of Economy, Trade and Industry in conjunction with the Nippon

The followings are Hulic’s major measures for maintaining and promoting employees’ health.

Conducting Health Checkups that Exceed Legal Requirements
・We implement an annual health checkup that is fully paid by the company and equivalent to a comprehensive medical examination, with awide lineup of optional examinations such as neck ultrasonography, colonoscopies, and gynecological checkups.

Corporate Governance

Kenko Kaigi to advance health and productivity.

The time required for each health checkup is regarded as working hours.
・100% medical checkup rate is our target, which is continuously achieved. From 2018, new targets that 100% medical re-checkup rate andparticipation rate of specific health guidance were added.
Message from management to recommend the participation of such checkup and follow-up by HR member in charge of health management

interview and provide health guidance for specific employees. In addition, consultation system about health issues is established.
・As infection control measure, employees can take flu vaccination before epidemic, antibody test and vaccination of rubella.

External Evaluation

were delivered.
・Moreover, in order to promote health management of employees, occupational health physician looks through the results of all employees,

*A family member who is in need of care is defined as a spouse, father/mother, child, spouse’s father/mother, grandfather/grandmother, brother/sister, or grandchild who requires constantnursing care for over two weeks due to a reason such as injury, disease, or physical or mental disorder.

76

Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021

77

Embracing Diversity & Inclusion and Respect for Human Rights

safety. Our industrial doctor attends all Committee meetings toprovide advice and guidance on healthcare. The Health Committee
and The Health and Productivity Management Follow-up Meeting

・Health Committee
・Health and Productivity Management Follow-up Meetingmembers discuss the status of use of paid leave and overtime

President is a chief executive in charge of health management, HR

are reported to the board members. The matters are utilized for

manager and general manager of each department are designatedimproving internal systems and goal setting. Also, important matters

as a leader in health promoted activity.

reported to the Health Committee such as the status of use of paid

Fundamental
Approach

We respect human rights and proactively take advantage of diversity in our business. We aim
to foster a workplace in which all employees can make the best use of their abilities.

work of employees, and the matters discussed by the Committee   The Health Committee and The Health and Productivity

leave, overtime work of employee and status of taking medical

Management Follow-up Meeting, which consist of the HR manager

checkups are reported to the Risk Management Committee which isand the members elected from among employees every year, holdheaded by the president and the Risk Management Committee will

monthly meetings in principle to promote employees’ health anddiscuss the matters.

 Ratio of female managers: 23.9%《Results in FY2020》●● Number of seminars provided by the Diversity Promotion Project Team: 1time● Employment ratio of persons with disabilities: 6.71 % (Hulic) 2.34 % (Hulic and its Group companies)*The figure marked withhas been assured by an independent assurance provider.

Diversity: Message from the President
Ever since being listed on the First Section of the Tokyo Stockhead office once a year. I myself also visit Suginami Office each year
to exchange opinions with everyone in the office.

Mental Healthcare

Non-smoking Initiative

Exchange, Hulic has consistently recorded all-time high profits.

We implement mental health care in cooperation with medical

For health promotion and stopping passive smoking of employees,

Now that a decline in the working population is unavoidable, we

institutions. We help employees, who are diagnozed as requiring

we implement enlightenment activities including complete

believe it is essential for diverse human assets to reach their full   We believe that it is essential for management to disseminate

special medical examinations and treatment, find specialists or

separation of smoking area from non-smoking rooms, delivering

potential in order for Hulic to continue plotting and achieving its

information actively so that Hulic employees work together tospecialized medical institution partners. In 2016, we started tomessage from health insurance association and post a notice aboutstory of steady growth into the future. To this end, based on apromote these initiatives. We communicate the importance ofperform stress check tests on all employees to prevent them fromno smoking. From 2019, we started to bear full cost of smoking

commitment to diversity and inclusion, our only job grades arediversity management through the dissemination of the Message

suffering from mental disorders.

Percentage of employees who took stress check tests
2016

2017

2018

2019

2020

91.0%

97.1%

95.7%

94.7%

94.7%

cessation clinics for employees who try to quit smoking andcareer-track positions to enable our employees to work withoutfrom the President once a month, the implementation of theintroducing the non-smoking hours in the office. Furthermore, inany gender distinctions, and our new graduate recruitment is

President’s Questionnaire Survey every six months, and periodic

2020, the range of no-smoking hour settings has been expanded.

now almost half male and half female. Nevertheless, sometimes

dinner meetings with employees. We are raising internal awarenessemployees need to leave their jobs for a certain period of time duein collaboration with the diversity promotion project team (theto life events and sometimes they struggle to balance work andformer women’s career promotion project team) launched in 2010

home life when they return to their jobs. Hulic has focused efforts

under the direct supervision of the President.

Health Promotion Program

Complimentary breakfast, lunch and beverages

on improving the systems such as establishing nursery facilities   Our employees will work together to achieve diversity and

To improve health awareness, we have installed blood pressure(health-oriented diet)located in our office and childcare leave so that this struggle does

inclusion, without any complacency about efforts to date.

monitors and body composition meters in common areas, and we

In order to publicize the importance of regular dietary intake, we

not form a barrier. As a result of these efforts, we achieved the

support the promotion of employee health by providing support

support healthy food habits at cafeteria (providing healthy lunch

target of increasing the ratio of female managers to 20% by thefor sports club fees and by participating in the Futsal Tournamentand calorie display of food & drink menu) .

year 2020, which was the target of First Action Plan Based on theat the Corporate Games 2019.

Act on Promotion of Women’s Participation and Advancement in

Health and Productivity Management Training

efforts aimed at career development for women and we have been

Environmental Initiatives

Health and Productivity Management
Promotion System

Social Initiatives

Health and Productivity Management Promotion System

Our Approach to Sustainability

Social Initiatives

Hulic provides ongoing occupational safety and healthcare
promotion training to raise awareness of safety and health among
all employees In 2020, we conducted in-house training (by video)
to improve health literacy.

・Attendance: Mandatory for managers or higher (however, allemployees can attend)
・Number of participants: 117 (the number of respondents toquestionnaires by managers or higher)

Corporate Governancethe Workplace,one year ahead of schedule. We also make active
enhancing the training and follow up required to achieve the newtarget of increasing the ratio of female managers to 25% by 2024
and 30% by 2029 every year.
   We also put efforts into employment for persons with severe
disabilities, who have limited employment opportunities. We haveestablished the Hulic Suginami Office, a dedicated work space at78

Hulic Ogikubo Building, where persons with disabilities carry out

In promoting the creation of comfortable workplaces, we giveoccurred in five years in a row (rate of occurrence was 0%).

first priority to the securing of safety and health and endeavor to

We will continuously promote the improvement of the level of   We are particularly aware of supporting independence.

secure employees' health and safety by engaging in various efforts.

occupational safety and health in the workplace.

Activities include working steadily from 9:15 – 16:15, learning how

While we have not obtained certifications such as OHSAS 18001,   Further, no fatal accidents have occurred in the past three

to use PCs in work breaks, and taking part in family tours at our

we secure occupational safety under our own system by regularly

years among contractors or at other companies involved in our

conducting risk assessment and improving issues.

real estate development. No employees are engaged in work with   The number of accidents occurred in 2020 was zero anda high risk for illness and no legal proceedings have been broughtno accidents that require time off from work or fatal accidents

against us in this regard.

Hulic Co., Ltd. Sustainability Book 2021

operations as our employees.

ManabuYoshidome
President,
Representative Director
External Evaluation

Occupational Safety and Health

Hulic Co., Ltd. Sustainability Book 2021

79

The Company has established the Hulic Human Rights Policy,

Universal Declaration of Human Rights, as well as human rights

Hulic promotes diversity management because we believe diversity

events in cooperation with the Cabinet Office, Keidanren and thewhich proclaims respect for human rights so that all employees

related to equal employment, prohibition of forced labor and childis essential for providing opportunities regardless of gender,

Ministry of Education, Culture, Sports, Science and Technology, but

can maximize their abilities and contribute to the realization oflabor, freedom of association, and collective bargaining stipulated

and to this end, we are strengthening efforts to develop careers

in 2020, to help prevent the spread of COVID-19, the event wasa society full of peace of mind and trust. In our Human Rights

in the ILO's international labor standards.

for women in particular. The Diversity Promotion Project Teamcancelled. Hulic has set target ratios of female managers with the

Policy, we declare that we prohibit any acts of discrimination and   In 2019, Hulic posted on its intranet regarding the themes of(formerly the Women's Career Promotion Project Team) has been

aim of becoming a company in which women take on active roles.

harassment, as well as any discrimination against any person

LGBT* and sexual harassment, etc.

conducting activities regularly since 2010. In 2016, we received

We provide follow-up trainings to all employees to raise awarenesson the ground of his or her beliefs, religion, age, sex, sexual   In addition, we held a seminar on changes in work style

the highest certification as an “Eruboshi” company under the Actof our approach. In FY2020, the ratio of female managers wasorientation, race, nationality, origin, physical or mental disorder,as part of compliance training for our directors and generalon Promotion of Women's Participation and Advancement in the

23.9%, achieving the KPI target of 20% by 2020. Going forward,

etc. We also prohibit any act, including sexual harassment ormanagers. Furthermore, in FY2020 we disseminated information

Workplace.

we will promote initiatives toward achieving new goals: 25%

abuse of authority, to inflict emotional distress on any person

related to the Hulic Human Rights Policy throughout the Group to   In 2019, we also engaged in activities with a focus on

female managers by 2024 and 30% by 2029.

through language or behavior that damages his or her character

raise awareness and understanding. We also provided complianceorganizing the “Science and Engineering Challenge (Riko-challe)”

or dignity. Respect for human rights encompasses all fundamental

trainings on themes such as preventing the abuse of power.

human rights found in the Constitution, Labor Standards Act, and*LGBT is a collective acronym for lesbian, gay, bisexual, and transgender.

The Hulic Human Rights Policy① Prohibition of discrimination
We prohibit any discrimination against any person on the
ground of his or her belief, religion, age, sex, sexual orientation,
race, nationality, origin, physical or mental disability, etc.
② Prohibition of harassment
We prohibit any act, including sexual harassment or abuseof authority, to inflict emotional distress on any person bylanguage or behavior that damages his or her character or
dignity.

⑤ Respect for the right of freedom of association andright of collective bargaining
In line with international labor standards, we respect the rightof freedom of association and right of collective bargaining.
⑥ Reduction of excessive working hours
In addition to ensuring compliance with labor-managementagreements, including the 36 Agreement and laws andregulations of relevant countries and regions, we adopt basic
policies to reduce overtime work and limit excessive work.

Formulation of Action Plan Based on the Act on Promotion of Women’s Participation andAdvancement in the Workplace (2nd period)
This Action Plan was formulated in order to enable female employees to strike a balance between their careers and child-raising, and to allow
them to exert their capabilities and develop their careers in various divisions of the company.
Duration of the Plan

September 1, 2019 - December 31, 2023
Target 1：To achieve a ratio of female managers of 20% or higher

Quantitative Goals

Target 2：Have at least three women assigned as heads of departments.
Target 3：Have 100% of eligible female employees and at least one eligible male
employee take childcare leave by making it easier to use the system.
● Career guidance and skills training will be provided to groom women for positions③ Prohibition of child labor
We prohibit any child labor.

⑦ Securing of health and safety of workers
In accordance with laws and regulations of relevant countries
and regions, including the Labor Standards Act, we endeavor tooffer a workplace where workers can work healthily and safely.

④ Prohibition of forced labor
We prohibit any forced labor carried out through violent acts or
intimidation.

⑧ Payment of wages over minimum wage
We pay wages over minimum wages prescribed in various local
laws and regulations as well as the Minimum Wage Act.

Environmental Initiatives

Promoting Female Empowerment

as heads of departments.
Initiatives● To encourage their use, the availability of work-life balance systems will be mademore widely known among employees.

Social Initiatives

Respect for Human Rights

Our Approach to Sustainability

Social Initiatives● Measures will be promoted among managers for raising awareness of diversity

management.

In FY2016, Hulic affirmed the Declaration on action by a group of male leaders who will create a Society inthe workplace.

Execution of Diversity Management
Hulic's basic approach is for the employees to be aligned with their

engage in regular activities based on such themes as improving

skill-sets, aptitudes, and personalities that enables individuals towork-life balance and career development. In addition, meetings

perform at a maximum level and as a result of that the Company

are held once a year with the President, who is responsible forParticipating in the joint declaration on the charter of corporate

graduates and experienced individuals) was 19 (male: 13, female:to operate a high value-added business with smaller workforce.

the team, providing an opportunity for employees to directly

ethics concerning employment issued by Keidanren (Japan Business6); the proportion of women was 31.5%. The ratio of female

To achieve this, we believe that it is essential to raise awareness

communicate their thoughts and opinions.

Federation), we proactively employ new graduates in accordance

managers has increased as a result of active efforts to promote theon diversity & inclusion and enhance related frameworks. In 2010,   In 2020, a video training session was held in lieu of in-personwith the purpose of the charter. When performing pre-employment

active participation and advancement of female employees in thewe established the diversity promotion project team (the former

seminar session to help prevent the spread of COVID-19. We also

screening, we respect the basic human rights of applicants andworkplace, with an enhanced system to support the development

women’s career promotion project team), which continues todiscussed encouraging male employees to take childcare leave.

make efforts to secure diverse human resources based on theirof the next generation. We intended to become a company where

aptitudes and abilities, regardless of backgrounds such as race,

female employees could thrive professionally, and in 2020, we

religion, or nationality, and regardless of gender. The total number

achieved 23.9% of the ratio of women in management positions.

Employment of Diverse Human Resourcesof employees newly hired in 2020 (the total number of new80

Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021

External Evaluationand Welfare as an excellent company taking initiatives to promote women’s participation and advancement in

Corporate Governancewhich women shine and received the highest-level “Eruboshi” certification from the Minister of Health, Labour81

We endeavor to prevent violation of laws related to labor andBoard of Directors is also regularly kept aware of the content   Various opinions and requests were received from employees

occurrence of accidents. Although risks of child labor and forcedof these reports. As a result, there have been no situations that

opportunities, freedom of association, and collective bargaining.

in response to the President Questionnaire Survey and, in fact,labor are low at Hulic as we have developed a highly specialized

threaten such risks as freedom of association, collective bargaining

we conduct interviews between employees and their supervisors

work is being carried out based on those responses to create abusiness mainly in Tokyo, we declare that we do not permit any formrights, child labor, forced labor, security practices, or indigenous

when necessary and carry out the President Questionnaire Survey,

more comfortable workplace, including the construction of aof child labor or forced labor. In order to prevent such labor, werights.

through which employees can share their views and opinions

bicycle parking lot at the head office.

regularly audit compliance with laws in employment management   In 2020, as part of compliance training for all employees,

and also provide compliance education, including regarding thewe conducted training on the theme of preventing the abuse of

prevention of child labor and forced labor, to employees.

power. In addition, we invited an outside lecturer and provided

For managing human risk, the department in charge determines

training for officers and department managers in relation toand evaluates the situation before reporting to the Risk

preventing the abuse of power.

directly with the President, in an effort to establish good labor

Efforts Regarding Compensation
The Hulic Human Rights Policy prescribes that we pay wages

listed companies for the fiscal year ended March 2020 and theover minimum wage prescribed in various applicable laws andsame of JPY7,496,000* in the real estate industry for the same

regulations as well as the Minimum Wage Act.

period. In this way, we provide employees with compensation that   The average annual salary in 2020 was JPY17,081,986

exceeds their living wages, which is competitive when compared(including bonuses and nonstandard wages). This was significantlywith the domestic and industry labor markets.

higher than the average annual salary of JPY6,305,000* at 1,803*Source: TOKYO SHOKO RESEARCH, LTD.

Management Committee and making recommendations. The

Human Capital-related Data
We appropriately manage personnel performance data and disclose information.

Number of employees (person)(non-consolidated)

Promoting Employment of Persons with Disabilities

Male/Female
Total

Number of employees (person)(consolidated)
Average annual salary (JPY million)

The Hulic Suginami Office had their 13th anniversary, and as

Suginami Office. We will make efforts to improve the workplace soof June 2020, our employment rate of persons with disabilities

that people with disabilities can feel a sense of worth in their work.

was 2.34%

Group-wide and 6.71%

on a non-consolidated

basis. Currently, ten employees with disabilities, instructors withexperience in coaching, and a chief administrator are working at

Average age (years)*Figures marked with “ ” have been assured by an independent assurance provider.
*The data covers Hulic Co., Ltd. and subsidiary companies that have been certified as affiliatedsubsidiary companies under the Act on Employment Promotion etc. of Persons with Disabilities.

Average
Male/Female
Average

Average overtime (hours)

2017

2018

2019

2020

109/40112/44

114/52

124/57

122/62

149

156

166

181

184

836

862

936

1,878

1,934

14.1

15.3

16.3

17.6

17.0

5.4/5.0

4.8/5.3

5.1/5.4

5.6/5.8

5.8/6.3

5.3

4.9

5.2

5.7

6.0

42.7/33.9

41.9/34.7

42.1/34.9

42.1/35.3

41.3/35.6

40.3

39.8

39.8

39.9

39.4

26.2

25.2

25.4

25.4

25.2

the Hulic Suginami Office, where they carry out operations,

New graduates hired (people)

Male/Female

6/3

5/3

4/4

4/4

4/4

Mid-career personnel hired (people)

Male/Female

14/5

15/3

8/4

8/1

9/2

such as the dispatch of direct mail. We were rewarded as

Retention rate 10 years after hiring (％)*1

Male/Female

-

-

-

-

97.2/96.9

an “Excellent Office for Employing Persons with Disabilities”

Retention rate new employees (％)*2

Male/Female-

100/100

100/100

100/100

100/100

award in 2013 for active employment and frequent Suginami

Number of voluntarily resigned employees (person)

2

2

3

2

3

1.3

1.3

1.8

1.1

1.6

Ratio of voluntarily resigned employees (％)

Office visits by the president, which helped to accelerate

Number of employees in managerial positions (person)(excluding executive officers)

creating a sense of unity between the headquarters and the
The Hulic Suginami Office

Employment System for Seniors

43/5

57/8

65/12

71/18

70/22

Employment ratio of persons with disbilities (％)(non-consolidated)

Male/Female

6.30

6.16

5.74

6.09

6.71

Employment ratio of persons with disbilities (％)(Hulic and Group companies)*3

2.21

2.11

2.41

2.42

2.34

Percentage of employees who received medical checkup(％)

100

100

100

100

100

Rate of paid leaves (％)

71.6

78.3

77.0

78.5

75.5

Number of employees who took childbirth leave (person)

We have introduced a reemployment program for seniors ininterchange with younger employees. In addition, in order to get aaccordance with the Act on Stabilization of Employment of Elderly

head start on compliance with the Amended Act on Stabilization

Persons. Under this program, we rehire any employee that hasof Employment of Elderly Persons, which came into effect in April

reached the retirement age but who wishes to continue working

2021, we established a new system in January 2021 that provides

until the age of 65. We offer staggered commuting and half-

opportunities for motivated and capable employees between

day leave for rehired employees and have facilitated environment

0

2

6

12

4

Number of employees who took childcare leave (person)*4

Male/Female

6/3

0/2

1/5

7/5

3/4

Rate of employees who took childcare leave (％)–Not adjusted for leaves carried over to the next fiscal year–*5

Male/Female

75/1500/100

100/100

116.7/83.3

75/100Rate of employees who took childcare leave (％ )–Adjusted for leaves carried over to thenext fiscal year–*6

Male/Female

75/1500/100

100/100

116.7/100

75/100

100

100

100

100

100

Number of employees with shorter working hours (person)

7

6

3

6

5

the ages of 65 and 70 to work at our company (a “specified

Number of employees who took day off for family care (person)*7

1

1

5

4

7

comparable to active employees with leave and absence systems.

commission” system that extends the continued employment

Number of employees who took family care leave (person)

0

0

0

0

0

We expect abundant knowledge and expertise that the senior

period to 70 years old).

Number of employees who took day off for nursing care (day)(absorbed previous nursing care leave)*7

60

114

86

133

111

Number of users of the subsidy system for daycare nursery fees (person)

22

31

31

23

34

Number of employees who took leave to take part in volunteer activities (person)*7

18

13

12

12

rehires possess to be inherited through communication and

Job Return System
Hulic has instituted a job return system that allows employees

to support a balance between work and childcare as advocated in

who left the Company due to marriage, giving birth, childcare,

the Act on Advancement of Measures to Support Raising the Next

caring for a family member, or other unavoidable reasons, toGeneration and to secure human resources that have wide-ranging

return to their same job within a five year period with the same

experience and a depth of professional knowledge.

compensation and benefits as before. The purpose of this system is

82

Average service period (years)

Male/Female

2016

Hulic Co., Ltd. Sustainability Book 2021

Ratio of employees returning to work after childcare leaves (％ )0*8(note) Figures marked withhave been assured by an independent assurance provider.
(note) Data covers Hulic Co., Ltd. only (excluding the number of employees (consolidated) and the employment ratio of persons with diabilities (Hulic and Group companies)).
(note) Figures exclude transfers between Group companies. Seconded staff are included in figures for the number of employees who took childbirth leave, childcare leave, days off for child care, employeeswith shorter working hours, and the number of employees who took leave to take part in volunteer activities.
*1 The retention rate for 10 years after hiring are for personnel who joined the Company during or after April 2011.
*2 The retention rate of new employees are actual results for the most recent three years.
*3 The data covers Hulic Co., Ltd. and subsidiary companies that have been certified as affiliated subsidiary companies under the Act on Employment Promotion etc. of Persons with Disabilities.
*4 Number of employees who took childcare leave：Number of employees who began taking childcare leave during the fiscal year
・If the acquisition period crosses fiscal years, include the figures for the fiscal year in which the acquisition start date occurs.
*5 Rate of employees who took childcare leave-Not adjusted for leaves carried over to the next fiscal year-：「Number of employees who began taking childcare leave during the fiscal year」÷「Number of
employees (or their spouses) who gave birth during the fiscal year」×100*6 Rate of employees who took childcare leave-Adjusted for leaves carried over to the next fiscal year-：「Number of employees who began taking childcare leave during the fiscal year」÷「Number of
employees who entered the period for childcare leave during the fiscal year」×100*7 Per month totals are given for the number of employees who took days off for nursing care, employees who took childcare leave and employees who took leave to take part in volunteer activities.
*8 The number of employees who took leave to take part in volunteer activities was nil during FY2020, as participation in volunteer activities was halted to prevent the spread of COVID-19.

Hulic Co., Ltd. Sustainability Book 2021

Environmental Initiatives

management relations.

respect for human rights in association with equal employment

Social Initiatives

Our Code of Conduct and Hulic Human Rights Policy stipulate

Corporate GovernanceManagement of Risks regarding Labor and Human Rights Issues

External Evaluation

Establishing Good Labor-Management Relations

Our Approach to Sustainability

Social Initiatives

83Social Initiatives

Initiatives for Local Communities
Our Approach to Sustainability

Fundamental
Approach

Organized Wooden Architecture Symposium 2019We value environmental aspects such as environmental consideration and social aspects suchas building good relationships with our stakeholders in addition to the economic aspects ofearning profits and growing as a company. We work to resolve social challenges and makecontribution to the sustainable development of society.

Hulic makes wooden constructions as a business. In addition, we
held the Wooden Architecture Symposium 2019 with the aim ofraising awareness on the possibilities of wooden buildings andhelping to reduce CO2 emissions and protect forests as part of oursocial contribution activities.

Policy for Social Contribution Activities
Basic Philosophy

Activity Guidelines
engage in activities with particular emphasis on the three major fields of global
・ Actively

Hulic actively and broadly engages in various social

environment protection, sharing value with local communities, and responses to social needs.

contribution activities including but not limited to ourbusiness fields as a good corporate citizen. Through・ Strongly support social contribution activities of employees.

these activities we wish to contribute to the sustainable

・ Place an emphasis on securing transparency in implementing activities and facilitate

Theme

Future of cities made of wooden structures
Aiming to increase demands for timber in urban areas
Challenge of timber for medium- and high-rise buildings

KeynotespeechKengo Kuma (Architect·Professor at The University of Tokyo)

Panelists

Kengo Kuma (Architect·Professor at The University of Tokyo)
Shuzo Sumi (Senior Executive Advisor, Tokio Marine & Nichido
Fire Insurance Co., Ltd.)
Tadao Kamei (President and CEO, Nikken Sekkei Ltd.)
Masahiro Miyashita ( Chairman of the Board, Takenaka
Corporation)communications and cooperation with the society.

development of the entire society.

In line with this Basic Philosophy and Policy for Activities, we make social contributions that provide support in areas that are compatible withour businesses.

Coordinator Atsuko Fukushima (Journalist)

Support of the Japan Business Federation’s One Percent Club Initiative
Hulic supports the One Percent Club initiative, a move advocated by KEIDANREN (Japan Business Federation). We are committing to spend at least one
percent of Ordinary Income to social causes each year. The Club, as a sub-organization of KEIDANREN’s Committee on Responsible Business Conduct &SDGs Promotion, provides information on social contribution activities to companies and coordinates networking with NPOs and other organizations withthe aim of enabling more effective social responsibility activities.

Note:Occupation, affiliation, title, etc., when symposium was held.

Environmental Initiatives

Social Contribution as a Company

Afforestation
Hulic outsources logging, planting, and weeding activities toyears, we will continue cutting undergrowth so that the planted

forestry cooperatives in an effort to plant the same amount ofcedar saplings will grow healthy.

Global Environment Protection● Organized Wooden Architecture Symposium● Donated to Keidanren Nature Conservation Fund
● Afforestation
Social Welfare● Hulic Scholarship Program for training of welfare
caretakers● Employee Match Gift Program● Donated to Japanese Red Cross Society● Sponsorship of Kodomono Tame no Shiba-Kikin
charity concert for children● Supported orphans of cancer and childhood cancer
patients and their families● Supported Single-parent Households● Donated Used Postal Stamps
Support of Culture and the Arts
● Sponsorship of the Hulic Cup Hakurei Championships

wooden construction. Approximately 300 m3 of lumber will
and Women's Rank-deciding Shogi Competition● Special Sponsorship of the Hulic Cup Kisei

Championships● Special Sponsorship of Minister of Education, Culture,
Sports, Science and Technology Cup Elementary andJunior High School Shogi Team Competition● Supported New National Theatre Tokyo● Supported Kishikai Shogi Festival (Great East Japan
earthquake reconstruction support event)● Supported Kishikai Christmas Festival● Relocation of Shogi Hall
Health, Medicine and Sports● Support for Japan Para-Badminton Federation● Support for the Japan Professional Tennis Association
Connection with the Local Communities● Opened Onsite Childcare Nursery Facilities to Local
Community Members● Donating Books to a Nearby Elementary School● Hosting Summer Festivals/Donated a portable shrine

Education and Social Education● Supported Scholarship Program of Kyoto University● Supported agricultural engineers● Supported AgriFuture Japan● Supported Nezu Foundation
Academic and Research Support● Organized an Idea Competition for Students● Supporting Environmental Studies at Kyoto University
Others● Sponsorship of Mainichi Shimbun in Fukushima relief
efforts● Donated to Ashinaga Scholarship● Subsidized the Cost of employees’ Disaster Recovery
Activities

be used in the construction of a commercial facility (the Ginza
8-chome development plan) for the fireproof wooden construction(hybrid structure combining wooden and steel frame construction)of a property scheduled for completion in October 2021. At thesame time, approximately 12,000 cedar saplings were planted (newplantings) across an area of about 4.3 hectares. Over the next five

Donated to the Keidanren Nature Conservation Fund
Hulic values activities that seek to conserve nature and biodiversity.

overseas. These projects work to conserve the natural environment

We have been donating to the Keidanren Nature Conservationin developing regions, mainly in the Asia-Pacific area, as well as

Fund every year since 2012. The funds we donate are used forpreserving Japan’s natural environment and projects related toprojects by private non-profit organizations, including somesustainability.

Establishment of Hulic Scholarship Program for Training of Welfare Caretakers
Contributions and community investments in registered NPOs
Hulic makes contributions to authorized NPOs. In FY2020, we made the following contributions.

Corporate Governance

List of Social Contribution Activities

Social Initiatives

trees as the standing trees used as building materials for fireproof

We established the Hulic Scholarship Program for Training of
Welfare Caretakers in 2017 in order to support students aiming
to be welfare caretakers, and develop human resources engaging

Result of Social Donation Activities in FY2020

84

Amount (JPY)of social issues related to the advancing aging society. This is anonrepayable (free) scholarship that aims for an improvement ofSingle Mothers Forum (SMF, an approved specified NPO)

10,000,000

The Japanese Red Cross Society (a specified juridical person)

6,000,000   We have doubled the number of scholarship students fromMusubie (an NPO who supports providing meals to children)

1,400,000

2020.

Keidanren Nature Conservation Fund (a public trust)

1,000,000

Total

18,400,000

Hulic Co., Ltd. Sustainability Book 2021

labor shortage in nursing care.
Practical training

Scholarship granting ceremony

Hulic Co., Ltd. Sustainability Book 2021

External Evaluation

Organization namein nursing care for the elderly and thus contributing to resolution

85

Sponsorship of the Hulic Cup Hakurei Championships and Women's Rank-deciding Shogi
Competition

We make donations to the Japanese Red Cross Society, an

to donations from the Company, those employees and executive

organization that responds to disasters through a wide range of

officers electing to participate also donate a fixed amount every

In 2020, Hulic together with the Japan Shogi Association

seven-match series to determine the title winner is scheduled to be

activities in Japan. In 2020, JPY6 million was donated. In addition

month.

established a new rank-deciding Shogi competition for women,

held from September to November 2021.

the Hulic Cup Hakurei Championships, with the aim of expanding

Donation of Used Postal Stamps for Support Activities in Developing Countries

opportunities for female professional Shogi players. Beyond
supporting the arts and culture, we decided to support professional

The Hulic Group generates a large number of used postage stamps

these activities, donating thefemale Shogi players from the perspective of empoweringand has set up stamp collection boxes at Group company locations.

proceeds instead to the Japan

women. The number of the women’s championships became

We donate these stamps every year. We donate these stamps

Committee, Vaccines for theeight, the same number as in the male professional Shogi player’s

every year. In 2021, we donated approximately 2,000 grams ofWorld's Children, a certified

championships by establishing the Hakurei Championships

used stamps that we collected during the year to the JapaneseNPO.

in addition to creating the Seirei Championships. The match

Organization for International Cooperation in Family Planning

opportunities for the women professional Shogi players have

(JOICFP). Every year, we collect a large volume of used stamps, andincreased significantly. Rank-deciding matches in the 1st Hulic Cup

we sort them with the cooperation of our sustainability supporters.

Hakurei Championship started in November 2020, and the final

Press conference announcing the establishment of the Hulic Cup Hakurei Championships andwomen's rank-deciding Shogi competition（Photograph courtesy of the Japan Shogi Association）

It takes almost two hours. After converting the stamps into money,
JOICFP applies it to activities that they promote in developing

Special Sponsorship of the Hulic Cup Kisei Championships

countries to protect the life and health of pregnant women
and women in general. JOICFP stopped collecting used postage
stamps in March 2021. Going forward, we plan to continue

Environmental Initiatives

Donation to the Tokyo branch of Japanese Red Cross Society

Our Approach to Sustainability

Social Initiatives

Since April 2018, Hulic has been a special sponsor of the Kisei
Sorting of used stamps by the sustainability supporters

Championships (organized by the Japan Shogi Association andSankei Shimbun Co., Ltd.) The Kisei Championship is an official

Hulic Insurance Service is a member of the Aflac National

Aflac Parents Houses initiatives promoted by the association. In

Association of Agencies, which is a network of medical and life

addition, in 2020 we began donating to the Gold Ribbon Network,

insurance agencies. We donate to the Aflac Scholarship Fund for

an NPO that supports children with cancer.

championship with a history, established in 1962. Players compete
for the title of “kisei.”A match of Hulic cup Kisei championshipChildhood Cancer Survivors and Children of Cancer Victims andAflac Scholarship Fund for Childhood Cancer Survivors and Children of Cancer Victims
This scholarship program is for high school students whose opportunities for pursuing a higher education have narrowed due to losing

Grandmaster Fujii Kisei defending
his title for the first time

Special Sponsorship of Minister of Education, Culture, Sports, Science and Technology Cup
Elementary and Junior High School Shogi Team Competition
Since 2017, Hulic has been a special sponsor of the Minister ofcompetition significant prestige. (The event was canceled in 2020

awarded exceeds JPY1.8 billion (as of June 30, 2020).

Education, Culture, Sports, Science and Technology Cup Elementaryand 2021 due

and Junior High School Shogi Team Competition (organized byto the COVID-19

the Japan Shogi Association and Sankei Shimbun Co., Ltd.). Thispandemic.)

These general support centers help reduce the economic and emotional burden of pediatric patients and their families as they take onchildhood cancer and other serious diseases with long-term hospitalization or outpatient care at specialist hospitals in urban areas.

Corporate Governancetheir household’s main provider to cancer. Up to now, more than 2,900 students have received scholarships, and the total amount

Aflac Parents Houses

competition is for teams of three students belonging to the sameelementary or junior high school, and the trophy and letter ofGold Ribbon Networkcommendation presented to the winning team by the Minister

Gold Ribbon Network is a non-profit organization dedicated to three key areas: supporting children with cancer to raise their qualityof Education, Culture, Sports, Science and Technology give theof life; supporting research and development to increase the survival rate of children with cancer; and providing information andpromoting understanding of childhood cancer.

Social Initiatives

Support for Orphans of Cancer and Childhood Cancer Patients and Their Families

Support for Kishikai Shogi Festival (Great East Japan Earthquake Reconstruction Support Event)In 2019, we sponsored the Kishikai Shogi Festival in Miyagi and thereconstruction efforts related to the Great East Japan Earthquake

Kishikai Shogi Festival in Ibaraki. (The event was canceled in 2020and shogi culture.

due to the COVID-19 pandemic.)

As part of our efforts to participate in social welfare activities tosupport the activities of

do our share in SDGs, we started to work with Single Mothers

SMF in sending foods toForum (SMF), an approved specified nonprofit corporation fromfamilies who have been

2020. We plan to provide single-parent households a joyful time

suffering significant

We sponsor the Kishikai Christmas Festival to spread the popularity

with mums who could usually be too busy working and may

income reductions byof shogi and contribute to the growth of Japanese culture. In

have little time for her children in everyday life. However, withdonating JPY10 million

2019, it was held at our Asakusabashi Hulic Hall, and over 200

the COVID-19 pandemic spreading globally, instead of providing

in 2020 and 2021,

people participated. (The event was canceled in 2020 due to theenjoyable events to the single-parent households, we decided torespectively, to SMF.

COVID-19 pandemic.)

External Evaluation

Support for Single-parent Households

We sponsor the Kishikai Shogi Festival as part of our support for

Support for Kishikai Christmas Festival

2019 Christmas Festival

86

Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021

87

Support for Scholarship Program of Kyoto University

The Japan Shogi Association has decided the policy to relocate to

the building in collaboration with Shibuya-ku and the Japan Shogi

We provide grant scholarships to Kyoto University students through the Kyoto University Fund with the aim of supporting thethe Sendagaya Center Building, which Hulic is rebuilding. In our

Association. Our plan is to complete construction of the Sendagaya

education of the next generation.

aim to contribute to urban development in the Sendagaya area,

Center Building by 2024, which falls the 100th anniversary year ofwhich has been affectionately dubbed Shogi Town, we will develop

the association's founding.

Support for Japan Para-Badminton Federation
As part of our social contribution activities, we have concluded an

our billboard ads showing para-badminton players, mainly in Tokyo

Official Gold Partner Agreement with the Japan Para-Badminton

subway stations. Going forward, we will continue to promote

Federation and have provided support for para-badminton sincerespect for human rights and diversity as well as increase support

2016. For the purpose of supporting the stable operations of thefor people with disabilities and the activities of para-badminton

federation, since 2017, we have lent the gym of Nishi Kasai Center

players.

Support for AgriFuture Japan
Hulic views the promotion of sustainable agriculture as one of

we have been supporting AgriFuture Japan, an organization that

our most important ESG-related management issues, so we arehelps develop the next generation of farmers, as part of our social

promoting an agri-business project. In this project, since 2014

contribution.

Holding the Eighth Hulic Student Idea Competition on the Theme of Legacy@Sendagaya
We planned this competition as a real estate company with theof the grand prize, three winners of the excellence award, and six

Building owned by Hulic (Hulic Nishikasai Gym) to the federation at

aim of providing students with opportunities to propose urban

winners of the honorable mention award were selected.

no charge as a practice gym dedicated for players from the Japandevelopment and construction ideas. We

Para-Badminton Federation. We have conducted improvement

received 131 entries for the 8th Hulic Student

work such as installation of slopes and plumbing so that the

Idea Competition in 2020. At the second

players can use the gym more comfortably.

public review (held online to prevent theWe have also been sponsoring the HULIC DAIHATSU Japan Para-

spread of COVID-19), students enthusiasticallyBadminton International since 2017. In addition, we have set up

HULIC DAIHATSU Japan Para-Badminton International tournament

Environmental Initiatives

Relocation of Shogi Hall

Our Approach to Sustainability

Social Initiatives

presented their ideas, followed by a question
and answer session with judges. Afterand has made it partially available to local residents in an effort tocontribute to reducing the number of children waiting to get into
childcare nursery facilities. For details, please see the following

A poster of the event, calling for entries

Second public review, held online (2020)

linked page.
WEB

Establishment of Hulic’s Onsite Childcare Nursery Facility
https://www.hulic.co.jp/en/sustainability/social/employee/balance.
html#anc2

Hosting Summer Festivals and Donating of a Portable Shrine

Supporting Environmental Studies at Kyoto University
Hulic supports studies that have an environmental theme.

Furthermore, we are promoting discussions on more ways to use

Currently, we are supporting research at Kyoto University related towood through opinion exchanges between the laboratory and ourthe use of wood in construction. This research is closely related todepartment in charge of environmental technology.

our efforts to build fireproof and other wooden structures.

In October 2012, the head office of Hulic was moved toshrine, etc. to the Odenma-cho Ninobu Neighborhood Association

Nihonbashi, Odenma-cho. As part of our efforts to introduce

to which we belong in 2017. We hope that carrying this portable

ourselves to the community, we held the Hulic Odenma Summer

shrine at the festival will lead to further revitalization and prosperity

Festival at our head office building in July 2013. The event wasin the area.

We have been supporting the Ganbappe, Fukushima! event

very well-received, so we have continued to hold it every summer

The event was canceled in 2020 and 2021 due to the COVID-19

organized by The Mainichi Newspapers Co., Ltd. and Mushu Co.,

since then. The Odenma-cho Ninobu Neighborhood Association

pandemic.

Ltd. held at Belle Salle Tokyo Nihonbashi as an activity to support

Sponsorship to Support Mainichi Shimbun in Fukushima Relief Efforts

is cooperating with us on the day of the event, and many people

reconstruction efforts in Fukushima, which was struck by the Great

come, from children living in the area to office workers from

East Japan Earthquake. On the day of the event, people fromnearby buildings. We hope that activities such as this will lead tosupporting companies support Fukushima's reconstruction. The event

deeper bonds between local residents. The proceeds from thewas canceled in 2020 and 2021 due to the COVID-19 pandemic.

Corporate Governance

Hulic has established onsite nursery facility inside the head office,consultations among the judges, one winnerSocial Initiatives

Making the Company's Nursery Facilities available to Local Community

Photograph courtesy of theMainichi Newspapers

festival has been added to the matching gift program, and the giftmoney has been provided to authorized NPOs. Moreover, as part

Donating Books to a Nearby Elementary School

The Hulic Group made a monthly donation of 500,000 yen to thechildren left as orphans following the Great East Japan Earthquake.

Ashinaga Scholarship Society from June 2011 to May 2019, andSince the outset, approximately JPY65,000,000 in total has beena certain amount of money has also been donated every month

donated by the Company and individuals as of May 2019. In order

We are active in contributing to the local community. Whileissues to encourage

to this Scholarship Society from the Company's directors andto provide wider support for domestic disaster, we changed theconsidering more ways to further deepen our connection with thechildren to give attention

employees who wish to participate in this initiative in an effort

donation destination from the Ashinaga Scholarship Society to the

local community, we learned that classroom libraries were worn

and thoughts to building

to provide continuous support for the living and schooling of theTokyo branch of Japanese Red Cross Society in August 2019.

out at Nihonbashi Elementary School, which is near our heada sustainable society.

children who will forge the future of this country by supporting

External Evaluation

Donation to Ashinaga Scholarship Societyof our community contribution activities, we donated a portableoffice building, and in need of replacement. As such, we donatedapproximately 1,000 new books. We asked the school to choose
books that include content related to SDGs and environmental

88

Hulic Co., Ltd. Sustainability Book 2021

Book donation ceremony

Hulic Co., Ltd. Sustainability Book 2021

89Social Initiatives

Supporting Employees to Participate in Social Contribution Activities
Our Approach to Sustainability

Paid Leave for Employees Involved in Volunteer Activities
The Hulic Group has established paid leave for employees involvedin volunteer activities, in order to support and nurture their efforts
to give back to the community and help to foster an attitude ofwanting to address issues facing society. The volunteer paid leave

Social contribution by employees

program is designed to support employees who participate insocial contribution activities. Employees are eligible to take up to● Matching gift program● Support activities in disaster-struck areas

20 consecutive days of special paid leave (employees who take part

● Satoyama conservation activities● Monthly community cleanup activities

in volunteer activities in disaster-hit areas can take paid leave morethan once within 20 days) under the volunteer paid leave program
to take part in philanthropic activities that give back to society. To

Summary of Satoyama Conservation Activities

encourage employees to use the volunteer paid leave program,
we provide not only information on social contribution activities,

Matching Gift Program

Objective

As Hulic holds many properties in Tokyo, we came up with theidea to protect the precious natural environment left in Tokyoand participated in the Satoyama Conservation Activities.

Summary

The company participates in the Tokyo Greenship Action
hosted by the Bureau of Environment, Tokyo Metropolitan
Government, every year, and engages in various volunteering
activities in Yokosawairi in Akiruno City such as the rice
harvesting experience, trimming of shrubs and weeds in theskirts of a mountain under the supervision of the NPO called“Yokozawairi tanbo no kai.”

but also raise awareness about such activities among employees
needs. These are the main fields under Hulic’s policy for social

by disseminating the volunteer experiences of employees with

the Hulic Fureai Fund, which deducts 100 yen every month fromcontribution. The Company matches donations with an equal

the entire Company through our intranet system. In 2019 wethe salary of employees who want to take part in the program (300

amount. At present, nine Hulic Group companies are working

continued satoyama conservation activities, which we have

yen for executive officers). The money collected is then donated

together on this activity. We will continue the donation activities,

conducted annually since 2009 as a participatory volunteer activity

to organizations selected by majority vote of all employees thatproviding opportunities of social contribution to employees who

involving our employees, and a total of 33 employees and their

are involved in activities related to local environment protection,cannot make the first step despite being interested in it.

family members from Hulic, Hulic Insurance Service, Hulic Building

coexistence with local communities, and responses to social

Management, Hulic Reit Management and Hulic Proserve have

The 12th Donation to the Musubie (an NPO who supports providing meals to children)
In 2020, we donated JPY1.4 million to Musubie, a certified NPOthese efforts, thewhose mission statement is to “help provide meals to children

number of children's

in order to create a society in which nobody is left behind.”cafeterias exceeds

The organization is working to establish cafeterias for children

3,700.

throughout Japan, creating environments that ensure foodsecurity for all children. Specifically, Musubie supports community

participated in this activity.
The event was canceled in 2020 due to the COVID-19 pandemic.
WEB

Date

September 26, 2019

Number of
33
participantsSocial Initiatives

Launching the match gift program in June 2008, we established

Environmental Awareness and Education for Employees
https://www.hulic.co.jp/en/sustainability/ecology/management/
education.html

Stipend Program for Disaster Recovery Volunteers

networks, collaborates with companies and organizations, andThe Hulic Group has established a framework for subsidizing up to

we will continue to promote to all employees through our intranet

conducts studies and research on children's cafeterias. Reflecting

60,000 yen of the cost of employees’ volunteer activities to support

information on volunteer activities. This information includes

reconstruction in disaster-stricken areas following the Great East

the results of volunteer activities as well as the thoughts of theJapan Earthquake. One person was subsidized in FY2019, while

participants, the situation on the ground, and information on

25 have received assistance since 2011. We hope that this systemreconstruction support tours.

will be a catalyst for greater understanding of conditions in the(These have not been used since 2020 reflecting the spread ofdisaster zone and will increase interest in the area. Going forward,

COVID-19.)

Past Donations
The 1st Donation (2009): WWF Japan 800,000 yen in total
The 2nd Donation (2010): Aladdin Caregiver Support Network Center 620,000 yen in total
The 3rd Donation (2011): Doctors of the World Japan (MEDECINS DU MONDE JAPON) 620,000 yen in total
The 4th Donation (2012): Nonprofit Organization Kokkyo naki Kodomotachi (KnK) 800,000 yen in total
The 5th Donation (2013): Florence 1,000,000 yen in total

Community Cleanup Activities/Flowerbed Maintenance Activities

The 6th Donation (2014): Kid's Door 1,200,000 yen in total

The four companies in the Hulic Group, Hulic, Hulic Building

people and employees. (Activities have been suspended due to the

The 7th Donation (2015): Civic Force 1,300,000 yen in total

Management, Hulic Proserve, and Hulic Property Solution

COVID-19 pandemic.)

The 9th Donation (2017): NPO Second Harvest Japan 1,300,000 yen in total
The 10th Donation (2018): OISCA, nonprofit incorporated association JPY1.4 million, in total
The 11th Donation (2019): NPO Japan Committee, Vaccines for the World’s Children JPY1.5 million, in total

participate in the Machikado (street corner)
Clean Day project run by Chuo Ward, where
our headquarters is located. Once a monthin early morning-time, we clean up around

External Evaluation

The 8th Donation (2016): NPO After School 1,200,000 yen in total

our head office with the aim of creating
a clean and comfortable environment.
Through these activities, we are also
promoting communication between local

90

Hulic Co., Ltd. Sustainability Book 2021

Environmental Initiatives● Donation to the Tokyo branch of Japanese Red Cross Society

Corporate GovernanceFundamental
Approach

We work to resolve social challenges and make contribution to the sustainable
development of society. Further, we strongly support each employee to participate in social
contribution activities.

Hulic Co., Ltd. Sustainability Book 2021

91

General Meeting of Shareholders
Deliberation/ Appointment

Remuneration Committee

Deliberation/
ReportCorporate GovernanceFundamental
Approach

Coordination & Collaboration
Audit

Nominating Committee

Appointment

Appointment

Decision

Audit &
Supervisory Board

Board of Directors

Corporate Audit
Department
Coordination &Audit & Supervisory
Collaboration
Board Office

Coordination &Collaboration

Accounting audit

ReportHulic Group recognizes that it is an important business issue to build a corporate governancesystem with fully functioning internal control, risk management, compliance, and disclosure
control.
We intend to sincerely execute business, fulfilling accountability to stakeholders.

Accounting Auditor

President and Representative Director

Internal audit

Sustainability Committee
Compliance
Real Estate
Planning and
AffiliatedBusiness Division Administration Division Companies Participation rate in the Board of Directors' Meeting: 99%《Results in FY2020》 ●● Number of effectiveness assessment of the Board of Directors: 1 time

Risk Management

Compliance Committee

Risk Management Committee
Fund ALM Committee
Operations management

Internal control functions of head office and affiliated companies● Number of compliance training sessions: 5 times (4 times for employees and once for officers)

Internal Controls● Number of Risk Management Committee meetings: 4 times

Business management
Internal controls over financial
reporting● Number of Fund and ALM Committee meetings: 22 times (12 regular meetings and 10 special meetings)

Disclosure Control● Number of BCP drills and inspections of stockpiled food and goods: 1 time

Our Approach to Sustainability

Hulic works to strengthen corporate governance with the aimof improving the transparency and efficiency of management
and continue to be trusted by society.

Diagram of Hulic’s Corporate Governance (as of June 1, 2021)

Environmental Initiatives

ESG

Corporate GovernanceInitiatives

Disclosure Working Group

Corporate Governance Guidelines
https://www.hulic.co.jp/en/sustainability/governance/pdf/cgg.pdf

Board of Directors

The Board of Directors ("The Board") consists of 10 members (four are external directors) who resolve issues specified in laws
and the Articles of Incorporation as well as important matters related to business execution based on the Board of Directors
Rules. The Board also oversees the overall execution of duties by directors and managing officers.
The Board holds regular meetings (once a month, in principle), and special meetings of the Board of Directors are held whennecessary. The Company is strengthening the oversight role of the Board on overall business execution by directors andmanaging officers to ensure sound management, such as by adopting the managing officer system. The managing officers
are appointed by the Board and are responsible for business execution. In addition, the Company believes effective corporate
governance is ensured by reinforcing the structure of the internal audit function and by improving the internal control system.
The Company’s Articles of Incorporation stipulate that the Board should consist of no more than 12 members in order tofacilitate its functioning.

Audit &
Supervisory Board

Hulic is a company with an Audit & Supervisory Board, which includes five Audit & Supervisory Board members (two are fulltime auditors and three are External Auditors, following the Companies Act and Ordinance for Enforcement of the Companies
Act).
In audit conducted by the Audit & Supervisory Board members, auditors monitor the operations of the internal control systemand the status of its implementation through audit of the execution of duties by directors, managing officers and each divisionin accordance with the audit basic policy and the audit basic plan formulated by the Audit & Supervisory Board. These audits
include attending the Board of Directors meetings as well as other meetings and committees when required, interviews on
the execution of duties by directors and managing officers, and reviewing important documents, approval documents andaccounting records, etc. The Audit & Supervisory Board Office has been established to support the duties of the Auditor &Supervisory Board members.

Nominating
Committee

The Nominating Committee, consists solely of independent external directors, deliberates on the appointment of candidates for
director and the Audit & Supervisory Board membership.

Remuneration
Committee

Specific amounts for the remuneration of directors are deliberated on and determined by the Remuneration Committee,
which consists solely of independent external directors, within the limits of the amounts approved at the General Meeting of
Shareholders.

Accounting
Auditor

The Company has an audit contract with Ernst & Young ShinNihon LLC to conduct audits.

system. We disclose all information required by the Corporate
Governance Code.

Corporate Governance Mechanism
Fundamental Approach to Corporate Governance
The Hulic Group understands the responsibilities towards all

as compliance and disclosure controls.

stakeholders, including shareholders, and makes a point of carrying

The Group has set the Fundamental Approach for Corporateout transparent and sincere corporate management. We adhere to

Governance to meet social demands through prompt and resolute

an autonomous governance system led by the Board of Directors

decision-making from medium- and long-term perspectives, with

with fully functioning internal controls, risk management, as well

the overall goals of improving corporate value and our purpose.

Overview of Corporate Governance System and Reason for Adopting Current System

92

The corporate governance structure of the Company includes

that adopting the managing officer system, appointing externalbodies such as the Board of Directors, Audit & Supervisory Board,

officers, and establishing various committees have enabled us

Nominating Committee, Remuneration Committee, Accounting

to build a corporate governance system that is sound and highly

Auditor, and the internal control system. The Company believes

efficient, as well as one that has an optimal structure for us.

Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021

Corporate Governancepromote the effective functioning of our corporate governanceWEB

External Evaluation

The Company Organization

We adopted "Corporate Governance Guidelines" as principles toSocial Initiatives

Corporate Governance Guidelines93to ensure soundness and efficiency of business management.

Committees
We established four committees to ensure cross-departmental deliberation and coordination on company-wide matters.
Committee Name

Purpose, Matters Deliberated and CoordinatedCompliance Committee

・Formulation and revision of compliance program.
・Matters related to information security management.

Risk Management
Committee

・Timely manage and respond to overall risk in accordance with the Basic Rules of Risk Management.
・Respond to facts occurred.

Fund ALM Committee

・The basic matters related to ALM.
・Procurement and investment of funds.
・Sale, purchase and investment of securities.
・Matters pertaining to the market risk management and liquidity risk, etc.

Sustainability Committee

・Initiatives on sustainability and implementation of related activities.
・Formulation and revision of materiality and related KPIs.

Attendance rate at Board of Directors’ meetings,
Audit & Supervisory Board meetings, and discretionary committee meetings
The Company's Board of Directors, Audit & Supervisory Board, Nominating Committee and Remuneration Committee include the following

Board of Directors

Audit & Supervisory
Board

Nominating
Committee

Remuneration
Committee

Title

Name

Chairman, Representative
Director

Saburo Nishiura

100%

-

-

-

President, Representative
Director

Manabu Yoshidome

100%

-

-

-

Vice President,
Representative Director

Hidehiro Shiga

100%

-

-

-

Vice President,
Representative Director

Takaya Maeda

100%

-

-

-

Director, Senior Executive
Managing Officer

Hajime Kobayashi

100%

-

-

-

Director, Senior Executive
Managing Officer

Tadashi Nakajima

100%

-

-

-

External Director

Tsukasa Miyajima

100%

-

100%

100%

External Director

Hideo Yamada

100%

-

100%

100%

External Director

Atsuko Fukushima

87%

-

-

100%

External Director

Kaoru Takahashi

100%

-

100%

-

Full-Time Audit &Supervisory Board Member

Shigeo Nakane

-

100%

-

-

Full-Time Audit &Supervisory Board Member

Takuya Asai

-

100%

-

-

members:

External Auditor

Koichi Nezu

-

93%

-

-

As of June 1, 2021, there were 14 males and one female members. (The percentage of female officers was 6.7%.)

External Auditor

Nobuyuki Kobayashi

-

100%

-

-

External Auditor

Kenichi Sekiguchi

-

100%

-

-

Board of Directors

Audit & Supervisory
Board

Nominating
Committee

Remuneration
Committee

Title

Name

Chairman, Representative
Director

Saburo Nishiura

〇

-

-

-

President, Representative
Director

Manabu Yoshidome

◎

-

-

-

Vice President,
Representative Director

Hidehiro Shiga

〇

-

-

-

Vice President,
Representative Director

Takaya Maeda

〇

-

-

-

Director, Senior Executive
Managing Officer

Hajime Kobayashi

〇

-

-

-

Director, Senior Executive
Managing Officer

Tadashi Nakajima

〇

-

-

External Director

Tsukasa Miyajima

〇

-

◎

*Attendance rates are calculated based on the meetings held in January to December 2020.
*Takuya Asai resigned his position as of March 23, 2021.

Executive Officer Nominations
We follow the policies and procedures specified below when nominating candidates for the Board of Directors or the Audit & Supervisory Board.

Policy on Nominating Board of Director and Audit & Supervisory Board Member Candidates
When nominating candidates for the Board of Directors or

make on improvements to the corporate value from an unbiased

the Audit & Supervisory Board, in addition to having excellent

perspective. Efforts are made with regard to Audit & Supervisory

character and insight and appropriately fulfilling the duty of care,

Board candidates in particular, to appoint at least one candidate-

candidates are selected based on their professional experience

with extensive accounting knowledge.

〇

and expertise as well as the contribution they are expected toExternal Director

Hideo Yamada

〇

-

〇

◎

External Director

Atsuko Fukushima

〇

-

〇

〇

Procedures for Nominating Board of Director and Audit & Supervisory Board Member Candidates

External Director

Kaoru Takahashi

〇

-

〇

〇

When nominating candidates for the Board of Directors or thecomprised entirely of independent external directors. The reasons

Audit & Supervisory Board, reports are submitted to the Board offor nominating each candidate are included in General Meeting of

Directors after deliberation by the Nominating Committee, which is

Shareholders convocation notices.

Shigeo Nakane

Full-Time Audit &Supervisory Board Member

Masahiro Okamoto

External Auditor

Koichi Nezu

◎

-

-

〇

-

-

-

〇

-

-

-

-

External Auditor

Nobuyuki Kobayashi

-

〇

-

-

External Auditor

Kenichi Sekiguchi

-

〇

-

-

Independent External Directors and Independent External Auditors Nominations
WEB

External Evaluation

Full-Time Audit &Supervisory Board Member

Independent External Directors and Independent External Auditors Nominations
https://www.hulic.co.jp/en/sustainability/governance/officer.html#anc3

The chairpersons are indicated with ◎.

94

Hulic Co., Ltd. Sustainability Book 2021

Environmental Initiatives

Attendance rate at Board of Directors’ meetings, Audit & Supervisory Board meetings, and discretionary
committee meetings in FY2020

Social Initiatives

We separate oversight of management by the Board of Directors and business execution by introducing the managing officer system

Corporate GovernanceManaging Officer System

Our Approach to Sustainability

Corporate Governance Initiatives

Hulic Co., Ltd. Sustainability Book 2021

95

Director compensation (excluding external directors) includes

thus we decided to use the percentage of change in consolidated

We have established “discretionary committees” following thedirectors as members of Nominating Committee and Remuneration

performance-based compensation, which consists of bonus

ordinary income as it is considered to represent a medium- to long-enactment of the Corporate Governance Code, effected on June

Committee to further strengthen governance from 2021 since

payments and stock compensation, and basic compensation,

term sustainable increase in shareholder value.

both committees are highly interrelated.

which is in addition to performance-linked compensation.

Moreover, the total amount of performance-based compensation

Performance-linked compensation accounts for 40 to 50% andfor directors will not change if the percentage change in thebasic compensation accounts for 50 to 60% of total director

preceding fiscal year's consolidated ordinary income falls below a

Remuneration Committee

remuneration. Hulic uses the percentage of change in precedingcertain level. The ratio of performance-based compensation in the

The Nominating Committee serves the function of reporting to

The Remuneration Committee is appointed by the Board, andfiscal year consolidated ordinary income as an indicator forform of bonuses (monetary portion) to share-based compensation

the Board on the nomination of officers, and deliberates on the

deliberates and makes decisions on the matters outlined below.

performance-based compensation. Our business performance is(BBT) is 1:1, and a clawback mechanism is in place that will revoke

following matters:

1.Remuneration standards and other matters pertaining to theconcisely represented by consolidated ordinary income as it takes

share-based compensation granted in the past if any misconduct

into account interest expenses and other nonoperating income,occurs.

directors from 2019. In addition, we made all four external

Nominating Committee

1.Selection of director and auditor candidates, changes to directors(promotion, etc.) and dismissals of directors
2.Other items concerning succession plans and matters concerning
the abovementioned items, as deemed necessary by the Board

remuneration of directors
2.Matters concerning the remuneration of directors, as deemednecessary by the Board

Directors/Auditors’ Compensation

The committee consists of 4 members that are all independent

The committee consists of 4 members that are all independent

external directors. In principle, the committee is held at a request

external directors. In principle, the committee is held at a requestof chairperson of the committee in December and March, twiceof chairperson of the committee in December, once a year. Ina year. In addition, other committee members can convene theaddition, other committee members can convene the committee if

committee if deemed necessary.

deemed necessary.

Matters pertaining to Policies for Determining the Amount and Means of Calculating Executive
Officer Compensation, etc.
Policy for Determining Executive Officer Compensation, etc.

Post

Total amount ofcompensation(JPY million)

Total amount by type of compensation (JPY million)
Fixed compensation

Number of
directors/auditors

Directors(excluding External Directors)

981

510

235

235

7

Auditors(excluding External Auditors)

72

72

-

-

2

External Directors/Auditors

126

126

-

-

7

(Note) The amount of stock compensation is provision to reserves for stock benefits posted as the portion for the current fiscal year, for performance-linked variable compensation system.

Assessment of the Effectiveness of the Board of Directors

Compensation of directors consists of basic fixed compensation,

growth of the Company and to enhance corporate value from thewhich is based on post and the weight of responsibilities, andshareholders’ perspective.

The Board of Directors implements an annual self-assessment

・Ensure that the meetings are proceeded more efficiently by

performance-linked compensation, which is linked to earnings

Furthermore, compensation of external directors and external

to continuously ensure its effectiveness, implementing pertinent

requesting materials that articulate discussion points, andperformance of the Company and contribution to earnings. In

auditors solely consists of basic compensation (fixed amount) inrevisions to Board management based on these evaluations.

practice more extensive deliberation and discussion for important

accordance with a resolution at the 86th General Meeting oflight of their roles and responsibilities.

The result of FY2020 assessment was concluded that corporate

resolutions including medium- and long-term management

Shareholders, a portion of performance-based compensation

Moreover, a resolution pertaining to the method for determining

governance was functioning effectively as the analysis andis allocated to a share-based payment plan designed to give

executive officer compensation was passed at a Board of Directors

assessment showed that 1) External Directors with diverse expertise

incentives for performing duties, in order to achieve the sustainablemeeting held on February 18, 2021.

comprise 40% of the total, 2) The Board is fostering a culture inwhich directors can express their opinions, and 3) appropriate risk-

96

Performance-linked variable Performance-linked variable
compensation (in stock)compensation (bonus)

policy.
・Indicate a wide range of risks involved in business and further
enhance the appropriate level of risk evaluation.
・Deepen discussion on environment, social and governance (ESG)-

General Meeting of Shareholders Resolution Details, Determination of Specific Compensation Related
to Executive Officer Compensation, etc.

taking and risk management in being carried out.

related topics referencing objective indicators with a view to the

However, the following points were confirmed as ongoing

private sector's role in relation to achieving the SDGs.

A resolution at the 90th General Meeting of Shareholders

for directors (excluding external directors).

challenges for the Board to work on.

stipulates an annual amount of up to JPY900 million (up to

When determining specific compensation, the Remuneration

JPY120 million for external directors) for Board of Director

Committee, which consists entirely of independent externalmonetary compensation, with bonus payments paid within that

directors authorized by the Board of Directors, deliberates andrange. Additionally, a resolution at the 85th General Meeting of

makes decisions within the scope of compensation determined by

The Company prepares and submits the Corporate Governance Report (in Japanese only) outlining the status of corporate governance to the

Shareholders stipulates an annual amount of up to JPY150 million

the General Meeting of Shareholders. Further, Audit & SupervisoryTokyo Stock Exchange as part of timely disclosure based on the regulations of the Tokyo Stock Exchange.

for Audit & Supervisory Board member monetary compensation.

Board member compensation is determined as a separate system

A resolution at the 90th General Meeting of Shareholders

from director compensation within the scope of compensation

stipulates a change in Board Benefit Trust (BBT) to a maximum of

determined by the General Meeting of Shareholders, in

250,000 points per fiscal year with regard to share-based payments

consultation with the Audit & Supervisory Board.

Hulic Co., Ltd. Sustainability Book 2021

Social Initiatives

1, 2015. All members of each committee are independent external

Environmental Initiatives

Performance-based Compensation

External Evaluation

Corporate Governance Report

Corporate GovernanceNominating Committee and Remuneration Committee

Our Approach to Sustainability

Corporate Governance Initiatives

Hulic Co., Ltd. Sustainability Book 2021

97

Corporate Governance Initiatives

External Director

External Director

7 Tsukasa Miyajima

9 Atsuko Fukushima

April

1990 Keio University Faculty of Law, Professor and Doctor of Law

April

1985 Joined CHUBU-NIPPON BROADCASTING CO., LTD.

April

2003 Registered as a lawyer

April

1988 NHK contract presenter

April

2004 General Insurance Rating Organization of Japan, Director

October1993 TBS contract presenter

June

2007 Meiji Yasuda Life Insurance Company, Councilor

April2005 TV Tokyo economics program regular presenter

March 2009 Hulic Co., Ltd., External Director (to date)April

2006 Shimane University, Management Council Member (to date)

October2010 Japan Association of Private Law, Director

December2006 Panasonic Corporation, Management Advisor

October2013 Japan Railway Construction, Transport and Technology Agency, Asset Disposal
Committee Chairman (to date)

March 2012 Hulic Co., Ltd., External Director (to date)June

2014 Dai Nippon Printing Co., Ltd., External Director (to date)
MIKUNI CORPORATION, External Auditor (to date)2015 Mitsui Sumitomo Insurance Company, Limited, External Director (to date)

October2015 Den-en Chofu Gakuen, Councilor (to date)April

2016 Keio University, Emeritus Professor (to date)
Asahi University, Professor of School of Law / Graduate School of Law (to date)June

2018 Daifuku Co., Ltd., External Auditor (to date)1979 Joined The Yasuda Fire & Marine Insurance Co., Ltd.

8 Hideo Yamada

April

2012 Sompo Japan Insurance Inc., Representative Director, Deputy President, andSenior Managing Executive Officer

April1984 Registered as a lawyer

April

May

1998 TAIYO CHEMICAL INDUSTRY CO., LTD., External Auditor (to date)2013 NIPPONKOA Insurance Co., Limited, Deputy President and Senior Managing
Executive Officer

2007 Ishii Food Co., Ltd., External Auditor
MIKUNI CORPORATION, External Auditor

March 2011 Seibu Lions, Inc., External Auditor

②

①

③

⑤

June

2015 SATO HOLDINGS CORPORATION External Director (to date)
Akiko Tachibana Memorial Foundation, Chairman of the Board of Directors (to date)June

2016 MIKUNI CORPORATION, External Director (to date)Representative Director, Chairman

１ Saburo Nishiura
April
1971 Joined The Fuji Bank, Limited
August 2000 The Fuji Bank, Limited, Managing Executive Officer, Head of Corporate Groupand General Manager of Corporate Development Division
April
2002 Mizuho Bank Ltd., Managing Executive Officer
April2004 Mizuho Bank, Ltd., Deputy President
March 2006 Joined Hulic Co., Ltd., President, Representative Director and Chief Executive Officer
March 2016 Hulic Co., Ltd., Chairman, Representative Director (to date)Representative Director, President

2 Manabu Yoshidome
April
April
March
April
March

1977 Joined The Fuji Bank, Limited
2005 Mizuho Bank Ltd., Executive Officer, General Manager of the Human Resources Division
2006 Mizuho Bank, Ltd., Managing Executive Officer
2009 Mizuho Bank, Ltd., Deputy President
2012 Joined Hulic Co., Ltd., Full-Time Audit & Supervisory Board Member

March 2015 Hulic Co., Ltd., Representative Director and Executive Vice President
March 2016 Hulic Co., Ltd., President, Representative Director (to date)Representative Director, Vice President

3 Hidehiro Shiga
April
1978 Joined The Fuji Bank, Limited
January 2005 Mizuho Bank Ltd., General Manager of the Subsidiaries and Affiliates Management Division
March 2006 Joined Hulic Co., Ltd., Senior Executive Managing Director, Representative Director
July
2006 Hulic Co., Ltd., Representative Director (Senior Executive Managing Officer)
April2020 Hulic Co., Ltd., Representative Director and Vice President (to date)Representative Director, Vice President

4 Takaya Maeda

Director, Senior Executive Managing Officer,
and General Manager of Corporate Planning Department

5 Hajime Kobayashi
April
May

1980 Joined The Fuji Bank, Limited
2003 Mizuho Bank Ltd., General Manager of Hamamatsu Branch

April
2004 Mizuho Bank Ltd., General Manager of Gotanda Station Branch
August 2006 Joined Hulic Co., Ltd., Managing Officer, General Manager of Corporate Planning
Department
April
2010 Hulic Co., Ltd., Executive Managing Officer, General Manager of Corporate
Planning Department
February2013 Hulic Co., Ltd., Senior Executive Managing Officer, General Manager ofCorporate Planning Department
March 2013 Hulic Co., Ltd., Director, Senior Executive Managing Officer, and General
Manager of Corporate Planning Department (to date)Director, Senior Executive Managing Officer

6 Tadashi Nakajima
April
April
May
April

1980 Joined Nomura Real Estate Development Co., Ltd.
2012 Nomura Real Estate Development Co., Ltd., Director, Managing Executive Officer
2012 Nomura Real Estate Holdings, Inc., Executive Officer
2013 Nomura Real Estate Development Co., Ltd., Director, Senior Managing Executive Officer,
General Manager of Commercial Property Development & Management Division
April
2014 Nomura Real Estate Development Co., Ltd., Representative Director, Senior
Managing Executive Officer, General Manager of Commercial Property
Development & Management Division
April
2016 Nomura Real Estate Development Co., Ltd., Advisor
August 2016 Joined Hulic Co., Ltd., Executive Managing Officer, General Manager of Real
Estate Development Department 3
April
2017 Hulic Co., Ltd., Executive Managing Officer, General Manager of Value-add Business
Department, General Manager of Development Solution Department
January 2019 Hulic Co., Ltd., Executive Managing Officer
March 2020 Hulic Co., Ltd., Director (Executive Managing Officer)
April

98

2021 Hulic Co., Ltd., Representative Director, Vice President (to date)

Hulic Co., Ltd. Sustainability Book 2021

2015 Sompo Holdings, Inc., Director

March2016 Hulic Co., Ltd., External Director (to date)April

2018 Sompo Japan Nipponkoa Himawari Life Insurance, Inc., Director, Chairman andExecutive Officer

April
June

2019 Sompo Holdings, Inc., Advisor (to date)2020 Sony Financial Holdings Inc., Outside Director (to date)

External Auditor, Audit & Supervisory Board Member

 Shigeo Nakane

 Nobuyuki Kobayashi

April

March 1991 Registered as a certified public accountant

1980 Joined The Fuji Bank, Limited

August 2005 Mizuho Bank Ltd., General Manager of the Accounting DivisionDecember1995 Established the Kobayashi Certified Public Accountants OfficeJuly2009 Senshu Shoji Co., Ltd., Auditor

March 2005 Registered as a tax accountant

July2010 Joined Hulic Co., Ltd., Executive Managing Officer, General Manager of the
Accounting Department

March 2009 Hulic Co., Ltd., External Auditor, Audit & Supervisory Board Member (to date)

March 2015 Hulic Co., Ltd., Senior Corporate Auditor, Full-Time Audit & Supervisory Board
Member (to date)Senior Corporate Auditor, Full-Time Audit & Supervisory Board Member Masahiro Okamoto
April
April

1985 Joined The Fuji Bank, Limited
2008 Mizuho Bank, Ltd., General Manager of Iwaki Branch

April
April

2007 National Institute for Environmental Studies, Japan, Auditor
2010 Nagoya University of Commerce & Business (graduate school), Professor (to date)

October 2011 Japan Arts Council, Auditor
July2017 The Japan Institute for Labour Policy and Training, Auditor (to date)

October 2017 Tokyo District Court, Adviser (to date)June

2019 The Japanese Institute of Certified Public Accountants Tokyo Chapter, Deputy
Chairman (to date)

April

2021 Shinshu University, Specially Appointed Professor of Faculty of Economics andLaw (to date)

October2013 Mizuho Financial Group, Inc., General Manager of Legal Division
Mizuho Bank, Ltd., General Manager of Legal Division
July
2016 Nippon View Hotel Co., Ltd., Full-time Statutory Outside Auditor

External Auditor, Audit & Supervisory Board Member

March 2021 Hulic Co., Ltd., Senior Corporate Auditor, Full-Time Audit & Supervisory Board
Member (to date)
Nippon View Hotel Co., Ltd., Auditor (to date)April

1972 Joined Yasuda Mutual Life Insurance Company

April2001 Yasuda Mutual Life Insurance Company, Executive Director, Deputy Senior
Manager of Asset Management Division and General Manager of Operational
Policy Division

April

2002 Yasuda Life Direct General Insurance Company, Director and President

TOKYO SOIR CO., LTD., External Director and Audit and Supervisory Committee
member (to date)

External Auditor, Audit & Supervisory Board Member

 Koichi Nezu
April

 Kenichi Sekiguchi

January 2004 Meiji Yasuda Life Insurance Company, Managing Director, General Manager of
New Market Sales DivisionDecember2005 Meiji Yasuda Life Insurance Company, Chairman of the Board

1975 Joined TOBU RAILWAY CO., LTD.

November1990 Tobu Department Store Co., Ltd., Representative Director and Senior Director
January 1999 Tobu Department Store, Representative Director and President
April2002 Kabushiki Kaisha Seiyoken, External Director (to date)May

2002 Nezu Museum, Chairman of the Board and Curator (to date)May

2003 Tobu Utsunomiya Department Store Co., Ltd., Chairman of the Board of Directors andPresident

April2006 Musashi Academy of the Nezu Foundation., Chairman of the Board of Directors (to
date)

July

2006 Meiji Yasuda Life Insurance Company, Chairman of the Board and Executive
OfficerJuly

2013 Meiji Yasuda Life Insurance Company, Special Advisor (to date)

March 2014 Hulic Co., Ltd., External Auditor, Audit & Supervisory Board Member (to date)
October2015 Kyushu Financial Group, Inc., External Auditor (to date)June

2018 Okuhiei Sankei Driveway Co., Ltd., Director (to date)
Shinjuku Subnade Co., Ltd., Director (to date)

October2007 Hulic Co., Ltd., External Auditor, Audit & Supervisory Board Member (to date)April

2013 Tobu Department Store Co., Ltd., Chairman of the Board of Directors
Tobu Utsunomiya Department Store Co., Ltd., Chairman of the Board of Directors

May2015 Tobu Department Store Co., Ltd., Chairman Emeritus (to date)

2021 Hulic Co., Ltd., Director (Senior Executive Managing Officer) (to date)April
1984 Joined Taisei Corporation
October2007 Joined Hulic Co., Ltd., Deputy General Manager of Real Estate Development Department 2
June2008 Hulic Co., Ltd., General Manager of Real Estate Development Department 2
March 2009 Hulic Co., Ltd., Director (Managing Officer), General Manager of Real Estate Development Department 2
October2010 Hulic Co., Ltd., Director (Managing Officer), General Manager of Business Planning Department
April
2013 Hulic Co., Ltd., Director (Managing Officer), General Manager of Real Estate Planning Department
April
2014 Hulic Co., Ltd., Director (Executive Managing Officer), General Manager of Real Estate Planning Department
January 2015 Hulic Co., Ltd., Director (Executive Managing Officer), General Manager of Real Estate Development Department 1
April
2020 Hulic Co., Ltd., Director (Senior Executive Managing Officer)
April

June

Audit & Supervisory Board Members
Senior Corporate Auditor, Full-Time Audit & Supervisory Board Member

Board of Directors

2015 Sompo Japan Nipponkoa Himawari Life Insurance, Inc.
Representative Director, President and Chief Executive Officer

Social Initiatives⑥⑮

2014 Daini Tokyo Bar Association, President
Japan Federation of Bar Associations, Vice President

April

Corporate Governance

④

⑫

⑪

April

September 2014 Sompo Japan Nipponkoa Insurance Inc.,
Representative Director, Deputy President, and Senior Managing Executive Officer

External Evaluation

⑨

⑭

⑬

External Director

 Kaoru Takahashi

March 2009 Hulic Co., Ltd., External Director (to date)⑦

March 2020 Councilor of Forestry Policy Council, Ministry of Agriculture, Forestry and
Fisheries (to date)

April

June

⑧

2015 Nagoya Railroad Co., Ltd., External Director (to date)
Calbee, Inc., External Director (to date)

October2017 The Resona Foundation for Future, Director (to date)

External Director

March 2006 Lion Corporation, External Director

⑩

June

Environmental Initiatives

June

Our Approach to Sustainability

Directors, Auditors and Managing Officers (as of April 1, 2021)

Managing Officers
Senior Executive
Managing Officer

Executive Managing Officer

Managing Officer

Yasuki Yakabi

Hiroshi Kitano

Kazuhiro Noguchi

Yoshito Nishikawa

Mikio Morikawa

Kazuteru Miyayama

Shin Ito

Hiroshi Hara

Yoshikazu Nagatsuka

Ken Ohta

Yuuji
Mutagamihigashi

Yasushi Umeda

Hulic Co., Ltd. Sustainability Book 2021

99

External Auditor and Audit & Supervisory Board members

Hulic has four external directors and three external Audit & Supervisory Board members. External directors and Audit & Supervisory Board

Attendance at meetings in FY2020
Namemembers provide comments at Board of Directors from a position independent from the execution of business and fulfill management

Occupation/affiliation, etc.

Reason for appointment

Independent
Director

14 of 15(93%)

Chairman Emeritus of Tobu Department
Store Co., Ltd., Board Chairman andCurator of Nezu Museum

Mr. Nezu has a wealth of business management experience and broad
insight into management in general through his management of amajor department store, and as such, the Company expects him to beable to audit its management objectively and from a neutral position
as an External Auditor and Audit & Supervisory Board member.

○

15 of 15
(100%)

15 of 15
(100%)

Director of Kobayashi Certified Public
Accountants Office

Mr. Kobayashi has specialized knowledge in accounting and taxation
as a certified public accountant and tax accountant, and as such, theCompany expects him to be able to audit its management objectively
and from a neutral position as an External Auditor and Audit &Supervisory Board member.

○

15 of 15
(100%)

15 of 15
(100%)

Special Advisor of Meiji Yasuda Life
Insurance Company

Over the years, Mr. Sekiguchi has accumulated extensive business
management experience and broad insight as chairman, and as such,
the Company expects that he will be able to audit its management
objectively and from a neutral position.

○

Board ofDirectors

Audit &
Supervisory Board

Koichi Nezu

14 of 15
(93%)

Nobuyuki
Kobayashi

KenichiSekiguchi

oversight and check functions.

Independent External Directors and Independent External Auditors Nominations
External Directors and External Audit & Supervisory Board

Insurance Inc. (then Sompo Japan Nipponkoa Insurance Inc.) until

members meet the criteria in the guidelines on the independence

March 2015. Sompo Japan Insurance Inc. is a shareholder of Hulicof independent executive officer(s) set out in Article 436-2 of thewhich also engages in transactions such as lending business funds

Securities Listing Regulations of the Tokyo Stock Exchange and theto Hulic. Such relationship is permitted in the criteria established by“Criteria for assessing the independence of independent external

the Company for determining the independence of independent

directors” in Hulic's Corporate Governance Guidelines.

external officers.

We appoint suitable independent external directors and auditors

External Audit & Supervisory Board member Koichi Nezu iswith excellent backgrounds, experience, and knowledge that fulfill

President of the Musashi Academy of the Nezu Foundation, an

our corporate governance requirements, using the criteria shownorganization to which Hulic provides financial assistance to support

below. Furthermore, we maintain the number of independent

next-generation education. In view of the nature and scale ofdirectors more than one-third of all directors.

the transactions, it has been determined that there is no risk of(1)A chieving the sustainable growth of the Company andaffecting shareholder and investor decision making.

External directors receive reports on internal audits, Audit &from the accounting auditor and the corporate audit department,

External Audit & Supervisory Board member Kenichi Sekiguchi

Supervisory Board audits, accounting audits and internal controls

attend meetings of the Board of Directors and express opinions as(2)Strengthening management oversightserved as the Chairman and Representative Executive Officer

at meetings of the Board of Directors. In addition, external Audit

necessary.

(3) Overseeing any conflict of interest among the Company,at Meiji Yasuda Life Insurance Company until July 2013. Meiji& Supervisory Board members regularly receive reports on audits

improving corporate value over the medium- and long-term

management, and shareholders

Relationship between supervision and audits by external directors or external Audit & Supervisory
Board members and internal audits, mutual cooperation between Audit & Supervisory Board
member audits and accounting audits and relationship with the internal control department

Environmental Initiatives

External Directors and External Auditors

Our Approach to Sustainability

Corporate Governance Initiatives

Yasuda Life Insurance Company is a shareholder of Hulic which
also engages in transactions such as lending business funds toopinions of shareholders, including minority shareholders,

Hulic. Such relationship is permitted in the criteria established byto the Board of Directors

the Company for determining the independence of independent

Please visit the Company's Corporate Governance Guidelines

external officers.

on our website for our criteria for assessing the objectivity ofNote: Hulic has designated and registered directors Tsukasa Miyajima, Hideo Yamada, Atsuko
Fukushima, Kaoru Takahashi, and Audit & Supervisory Board members Koichi Nezu,
Nobuyuki Kobayashi and Kenichi Sekiguchi, as independent external officers with the Tokyo
Stock Exchange based on the Tokyo Stock Exchange’s rules and regulations.

independent external directors/auditors.
External Director Kaoru Takahashi served as Representative

Auditing Mechanism
Auditing Mechanism
The Company enhances the effectiveness and efficiency of audits through mutual cooperation and regular exchange of information among

Social Initiatives(4) Effectively relaying, from an independent position, thethe Audit & Supervisory Board members, the Accounting Auditor, and the Corporate Audit Department.

Director, Vice President and Executive Officer at Sompo Japan

Organization, Personnel and Procedures

External Directors

Hulic is a company with an Audit & Supervisory Board, which

and issues pointed out by the Accounting Auditor after receiving

comprises five Audit & Supervisory Board members (two area report from an Audit & Supervisory Board member. The Audit

full-time auditors and three are External Auditor pursuant to& Supervisory Board Office has been established to support the

the Companies Act and Ordinance for Enforcement of theduties of Audit & Supervisory Board members.

Companies Act). In audit conducted by the Audit & Supervisory

Furthermore, the Audit & Supervisory Board members receive

Board members, auditors monitor the operations of the internalreports on the results of audits performed by the Corporate Audit

control system and the status of its implementation through audit

Department and exchange information regularly to enhanceof the execution of duties by directors, managing officers andthe effectiveness and efficiency of audits by both the Audit &each division in accordance with the audit basic policy and theSupervisory Board members and Corporate Audit Department,

audit basic plan formulated by the Audit & Supervisory Board.

which performs internal audits.

These audits consist of attendance at the Board meetings as well

Note that Shigeo Nakane, Full-Time Audit & Supervisory Board

as other meetings and committees when required, interviews

member, has served as Executive Managing Officer, Generalon the execution of duties by directors and managing officers,

Manager of the Accounting Department of the Company, and thatand reviewing important documents, approval documents andNobuyuki Kobayashi, External Audit & Supervisory Board member,accounting documents, etc. In addition, the Board responds

is registered as a certified public accountant. Both members havepromptly to any wrongdoing identified as well as deficiencies

considerable knowledge of finance and accounting.

Name

Tsukasa
Miyajima

Hideo
YamadaAtsukoFukushima

Kaoru
Takahashi

Attendance at Board of Directors
meetings in FY2020

Occupation/affiliation, etc.

Reason for appointment

15 of 15 (100%)

Professor Emeritus of Keio University,
Lawyer, Professor of School of Law
and Graduate, School of Law of Asahi
University

It is expected that Mr. Miyajima leverages his extensive track record
and insight as a person of academic standing in the management of
the Group, and the Company believes that he appropriately performs
his duties as an External Director.

○

Lawyer of Yamada Ozaki Law Office

Mr. Yamada has been active as a lawyer for years and has high views
as a legal expert as well as experience as an external director of othercompanies, and the Company believes that he leverages this expertisein the management of the Group.

○

15 of 15 (100%)

13 of 15 (87%)

15 of 15 (100%)

100 Hulic Co., Ltd. Sustainability Book 2021

Journalist, Councillor of Forestry
Policy Council, Ministry of Agriculture,
Forestry and Fisheries

Ms. Fukushima has been active in the media industry for years and has
extensive experience, and as such, the Company believes she can reflect
her wide range of perspectives in areas including socio-economics,
environment, culture and diversity in the management of the Group.

Advisor, Sompo Holdings, Inc.

Mr. Takahashi has extensive experience and broad insight as the top
management of a major insurance company, and the Company believes
that he leverages this expertise in the management of the Group.

Independent
Director○○

External Evaluation

The expertise and reasons for selection of the External Directors and External Audit & Supervisory Board Members are as follows.

Corporate GovernanceStatus of Audits by the Audit & Supervisory Board Members

Expertise of External Directors and External Audit & Supervisory Board Members

Hulic Co., Ltd. Sustainability Book 2021 101

Status of Activities by Audit & Supervisory Board Members and the Audit & Supervisory Board
Frequency of Audit & Supervisory Board Meeting
The Audit & Supervisory Board meets at an appropriate frequency and actively exchanges opinions on management issues of the Company

Details of Audit Fees, etc.
Compensation for Audit by a Certified Public Accountant, etc.

and important risks pertaining to accounting audits.

FY2019Category

Priority Audit Items of FY2020
・Achievement of priority issues at each department in the first year of the new Medium- and Long-Term Management Plan
・Risk management mechanism for business diversification and internal control of the Group

Compensation based on audit andattestation services

FY2020Compensation based on nonaudit services

Compensation based on audit andattestation services

Compensation based on nonaudit services

Hulic

52

6

52

Consolidated subsidiaries

23

―

45

1

Total

76

6

97

11

・Status of ESG-conscious business operations, value creation process in integrated report

9

Our Approach to Sustainability

Corporate Governance Initiatives(FY2019)

Major Activities of Audit & Supervisory Board Members

Non-audit services at the Company were comfort letter preparation work related to issuing corporate bonds.
are held every three months to share information on the risk

(FY2020)

management and issues at each company.)

Non-audit services at the Company were comfort letter preparation work related to issuing corporate bonds.

Board of Directors (External Audit & Supervisory Board members

・Collaborate with external directors (twice annually to exchange

Non-audit services at the Company’s consolidated subsidiary were comfort letter preparation work related to issuing corporate bonds.

hold discussions at the Audit & Supervisory Board meetings

information on recent audits and topics.)

through information sharing with full-time Audit & Supervisory・E xchange information with accounting auditors (approximately

Board members who attend important meetings other than the

10 times a year; receive reports on the status of audit quality from

Board of Director meetings and mutual confirmation based on

the audit firm, and address the independence of the accounting

interviews with key officers.)

auditor, the status of quality control, the appropriateness of the・Review important approval documents, etc.

job execution system, and the risk of fraud, and confirm the state

Hulic

―

4

―

・Verify the effectiveness of the Group internal control system (full-of implementation of accounting audits of the auditing fiscal year.)

Consolidated subsidiaries

―

0

―

6

time Hulic Audit & Supervisory Board members concurrently serve

・Cooperate with three-way audits (twice annually)

Total

―

4

―

6

as Audit & Supervisory Board members at most of the affiliated・Evaluate the effectiveness of the Audit & Supervisory Board(FY2019)

companies, and in addition to conducting effective audits during(annually)

Non-audit services at the Company involved offering tax advice.

Environmental Initiatives

four times each year)
・Attendance at important meetings such as the meetings of theCompensation for Ernst & Young member firms
Compensation based on audit andattestation services

FY2020Compensation based on nonaudit services

Compensation based on audit andattestation services

Compensation based on nonaudit services―

Social Initiatives

FY2019Category

Non-audit services at consolidated subsidiaries involved tax-related outsourcing.

Status of Accounting Audit(FY2020)

Name of Accounting Auditor

Non-audit services at consolidated subsidiaries involved tax-related outsourcing and others.

Ernst & Young ShinNihon LLC
The Company enters into an agreement with the Accounting

Company and the amount stipulated by law.

Compensation for Other Important Audit Attestation Services

Auditor that limits liability for damages resulting from the neglect

The certified public accountants engage in Hulic accountingNone.

of duties based on Article 427, Paragraph 1 of the Companies

operations changes regularly based on the Certified Public

Act and Article 41, Paragraph 2 of the Company’s Articles of

Accountants Act, and auditors are engaged to conduct audits for

Policy for Determining Audit Fees

Incorporation. The maximum amount of liability under theno more than seven consecutive years.

Audit fees for the certified public accountant are determined with

Reasons the Audit & Supervisory Board Gave
Consent to Compensation of the Accounting Auditor

the consent of the Audit & Supervisory Board in accordance with

The Audit & Supervisory Board performs necessary checks

agreement is the higher of an amount predetermined by thelaws and regulations and in consideration of such factors as theregarding the details of the audit plan of the Accounting Auditor,

Policy and Reason for Selecting the Accounting Auditor

size and characteristics of the Company and the number of days

the performance status of accounting audit duties and the basis

When it is necessary to select a certified public accountant to perform

among all Audit & Supervisory Board members when they havespent for the audit.

for calculating compensation estimates, and has given consent foraudits, the Audit & Supervisory Board examines and confirms thejudged that there is a reason for dismissal as provided for in Article

the compensation paid to the Accounting Auditor.

following items through interviews and questions with the certified

340, Paragraph 1 of the Companies Act. The Audit & Supervisory

public accountant and an exchange of opinions with business

Board determines the proposal for dismissal or non-reappointment

execution divisions before making a comprehensive judgment.

of the current Accounting Auditor when it concluded that they are

・Status of quality control ・Independence ・Expertisenot appropriate due to such reasons as violation of the Certified

The Corporate Audit Department, which reports directly to

improvements to the audited departments to help resolve issues.

・Appropriate member configuration

Public Accountants Act, etc., and based on that decision, the Board

the President and works independently from other business

The President, who oversees the Corporate Audit Department,

・Audit plan considering risk ・Appropriateness of audit feesof Directors will submit the proposal at the general meeting ofactivities, carries out internal audits of the Company and thereports important matters related to the internal audits regularly to

The Accounting Auditor will be dismissed based on agreement

shareholders.

Company’s affiliates. Specifically, the Corporate Audit Department

the Board of Directors.

systematically conducts internal audits in accordance with theAdditionally, the Corporate Audit Department strives to enhance

Evaluation of the Accounting Auditor by the Audit & Supervisory Board and Its Members

internal audit basic plan, which is resolved by the Board ofaudits and improve the effectiveness of internal controls by

The Audit & Supervisory Board performed an evaluation of theof Group audits and fraud risk, after receiving a report on the

Directors, and reports the findings to the President. The department

reporting audit findings to Audit & Supervisory Board members andAccounting Auditor from the perspectives of quality control,

status of the audit quality from Ernst & Young ShinNihon LLC. As

also provides advice, guidance and recommendations foraccounting auditors, as well as exchanging opinions with each other.

independence of the audit team, exercise of professional distance,a result, it was determined appropriate to reappoint Ernst & Youngappropriateness of audit fees, effectiveness of communication with

ShinNihon LLC as the Accounting Auditor.

Corporate Governancethe term, Group Audit & Supervisory Board Liaison Meetings

Status of Internal Audit

External Evaluation・R egular meetings with the representative directors (approximately

management and the Audit & Supervisory Board, and handling102 Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021 103

Corporate Governance Initiatives

Pursuant to the Basic Rules of Risk Management, we manage various risks related to the Hulic
Group's businesses, which include operational, market, liquidity, and credit risk, among others.

Companies Act and the Ordinance for Enforcement of the Companies Act, as a system to ensure appropriate business operations of theCompany, and promoting sound management and business operations by enhancing internal controls.

 Number of Risk Management Committee meetings: 4 times《Results in FY2020》 ●● Number of Fund ALM Committee meetings: 22 meetings (12 regular meetings, 10 special meetings)

System to Ensure the Appropriateness of the Company’s Operations● Number of BCP drills: 1 time

① System for ensuring that the directors, managing officers, and● Number of inspections of stockpiled food and goods: 1 time

auditors' duties by the auditors

employees of our company and subsidiaries execute their duties⑦ Matters relating to the guarantee of the independence of thewhile they comply with laws and regulations, and the Articles ofabovementioned employees from the directors and of theIncorporation

effectiveness of the orders given by the auditors

the risk of losses of our company and subsidiaries④ System for ensuring that the directors of our company andsubsidiaries effectively execute their duties⑤ System for reporting to our company about the execution ofduties of the directors, etc. of subsidiaries⑥ Matters relating to the employees who are asked to support

Hulic recognizes that appropriately managing risks of the Company

management of our Group. In 2020, as the spread of COVID-19

as employees of our company, and the directors, auditors,

and its affiliates is one of its most important management

increased volatility in markets, the Fund ALM Committee held 10

managing officers, as well as employees of subsidiaries, or thechallenges, and has set up a structure with the Board of Directors

special meetings in addition to regular monthly meetings in orderpersons receiving a report from any of the abovementioned

at the top while working to make improvements. The department

to closely monitor interest rates, securities and other market risks,

persons report to our Audit & Supervisory Board and its

responsible for a particular risk stripe formulates risk management

in an effort to flexibly respond to each risk scenario.

members and other systems for reporting to auditors

method, then appropriately monitor and control⑨ Matters relating to payment for auditors for executing theirrisk. The status of risk management is reported

duties and other systems for ensuring that audits are effectively

to the Risk Management Committee and Fundcarried out by the auditors

ALM Committee regularly and as required by thedepartment in charge with its recommendations.

Operational Status of the System to Ensure the Appropriateness of the Company’s Operations

The Risk Management Committee and Fund ALM

Efforts to Manage the Risk of Losses

the reports and recommendations provided by

The Company established an annual compliance program（"theThe Company’s Risk Management Committee convenes every

the departments in charge of risk management,

program") and confirms the status of progress through thequarter and conducts appropriate risk management in response

assess overall risks and discuss appropriate

Compliance Committee, which convenes four times a year. In

to fluctuations in risk by assessing the predetermined monitoring

responses before reporting to the Board of

the program, regular compliance training for employees anditems. As for BCP preparedness, we review our Basic Plan for

Directors. The Board of Directors resolves

the distribution of compliance-related news ensure thoroughBusiness Continuity (BCP) and the BCP Manual. In addition, we

important matters related to risk management

compliance, including severing any ties with anti-social forces.

conducted BCP drill in November 2020. This time, we used aupon receiving reports from the Committees.

Compliance training is also separately provided for officers.

remote meeting format, assuming that some committee members

We also verify that our affiliated companies are

In addition, the internal reporting system or Compliance Hotline

could not come to work due to a major earthquake, and confirmed

implementing appropriate risk management by

how we respond in an emergency.

requiring them to submit accurate and pertinent
reports on a regular basis. In these ways, theprotect the whistleblower. Reports are regularly made to the Board

Resolution ofimportant mattersrelated to risk
management

Deliberation/coordinationand decision/report on
risk management
Report/Recommendations

Committee, which convene regularly, examine

Compliance Initiatives

ensures prompt detection and resolution of issues as well as toDiagram of Risk Management Mechanism

Oversight
ReportBoard ofDirectors
Chairman:President

Risk Management
Committee
Chairman: President
Secretariat: Business
Planning andManagement
Department
Fund ALM
Committee
Chairman: President
Secretariat: Finance
Department

Management/reporting/recommendations related torisk management conductedby departments in charge
Operational risk
System risk
Operational risk
Legal risk
Human resources risk
Tangible fixed assets risk
Market risk
(real estate market conditions)Credit risk
Overseas investment risk
Market risk (interest rates,
foreign exchange, securities)

Liquidity risk
Credit risk

Affiliated companies③ System for the rules, etc. that are related to the management of⑧ System for having the directors, managing officers, as well

Managed by Finance
Department
Verification

execution of duties of our directors

Report② System for storing and managing the information related to the

Risk Management Structure(related to financial institutions)

Coordination &Internal
Collaboration
audit
Audit
Audit & Supervisory
Corporate Audit
Board
Department

Moreover, since FY2018, we added an independent outside contact,

Initiatives for Ensuring Appropriate and Efficient
Business Execution

as well as one female manager as an internal contact, with the aim

In addition to regular Board of Directors meetings held eachof improving the effectiveness of the internal reporting system.

month, the Company also holds extraordinary Board of Directors

In FY2020, we incorporated power harassment into our rules andmeetings as required to ensure effective decision-making and theBusiness Continuity Approach for Disasters

provided training on preventing the abuse of power in response tooversight of business execution. We are also striving to ensure

Hulic is a real estate company that engages in development,

convenience. We have established various emergency and disasterthe related legislation.

efficiency, for example by consolidating common operations in thereconstruction, and operation of office buildings and rental

scenarios for which we have created measures to improve theGroup to a shared service company.

apartments primarily in Tokyo 23 wards. We are constantly

structural performance of our buildings as well as operational andworking to generate new added value by offering properties thatmanagement aspects.

Initiatives to Ensure Appropriate GroupOperations
The Company’s subsidiaries apply for approval and make reports on

Initiatives to Ensure the Effectiveness of Audits
by the Audit & Supervisory Board Members

important issues based on the Regulations for Business Management

The Company has an Audit & Supervisory Board, which meets onceof Affiliated Companies. Furthermore, the Corporate Audita month in principle, to make decisions on, make reports, andDepartment conducts audits with appropriate intervals and Businessdiscuss important issues related to auditing. In addition, the Audit

Planning and Management Department regularly provides guidance& Supervisory Board members ensure the effectiveness of audits byto the subsidiaries.

attending various meetings and reviewing the minutes of meetings.

Companies that have recently become subsidiaries receive individual

The Audit & Supervisory Board Office was established to create a

guidance on areas including risk management based on thesystem for promptly responding to requests from Audit & Supervisory

Company regulations.

Board members.

104 Hulic Co., Ltd. Sustainability Book 2021

Board of Directors has an oversight of risk

Business Continuity Initiatives for Disasters

are superior in terms of safety, environmental performance, andExternal Evaluationof Directors concerning the status of operations and reporting.

Environmental Initiatives

The Board resolves matters concerning the basic design and operation of the internal control system specified in the provisions of theFundamental
ApproachSocial Initiatives

System to Ensure the Appropriateness of the Company’s Operations and Operational Status of the System

Corporate GovernanceInternal Control System

Our Approach to Sustainability

Risk Management

Hulic Co., Ltd. Sustainability Book 2021 105

Maintaining Functions during a Disaster

Our Basic Plan for Business Continuity defines the framework

a flowchart showing how to act when a(Hulic Head Office Building)and method for continuing important business functions

disaster occurs while commuting or duringwhile minimizing damage to business assets in the event of an

holidays.

emergency, such as a metropolitan epicentral earthquake. We   Hulic implemented a variety of responses

have also created the BCP Manual outlining specific execution

against COVID-19, including working withplans and have thoroughly communicated the contents of theindustrial physicians to formulate responsemanual to officers and employees. The BCP Manual outlines

policies and encouraging employees topractical guidance on confirming customer safety, responding towork from home (expanded eligibility of

the injured, confirming employee safety , implementing emergency

conventional work from home system whichmeasures by the BCP response team, and executing emergency

was available only to employees providing

and restorative actions to ensure business continuity, etc., based onchildcare or nursing care). We also madethe time that has elapsed since the disaster.

efforts to reduce infection risk by staggering work hours and   Further, a portable Disaster Response Manual was preparedinviting employees to commute to work by bicycle, implemented

and distributed to all employees. This manual contains information

thorough infection prevention measures for each employee andon preparedness for disasters, procedures for using emergency

promoted the use of Web conferencing.

Diagram of Hybrid Structure Model

Review and Improvement of the Basic Plan for Business Continuity
Hulic reconfirms basic responses against disaster through annual

Furthermore, we analyze and evaluate the issues identified in the

BCP drill based on the Basic Plan for Business Continuity. The

drill, and work to build a more practical BCP system by reflecting

drill tests processes of establishing an emergency responsethese issues in a revised BCP manual.

headquarters, verifies operation of the safety confirmation   We also established a cross-sectional cooperation withsystem, and provides training on communication and information

external organizations including design companies, construction

gathering among other things. This serves to reaffirm thecompanies, management companies as well as elevator companies

importance of business continuity for executives and employees as

to ensure continuity of real estate business.

Earthquake Resistance Performance of Buildings

well as standards of behavior related to disaster countermeasures.

BCP drill

Fire drill

An exhibit of emergency supplies

Hulic has established strict internal earthquake-resistance standards

ensure full compliance with new earthquake resistance standards,

which specify building performance that can safeguard human life

thereby ensuring the safety of occupants. In addition to measuresand enable continued use of the building with post-earthquake

from a structural perspective such as building structure,we arerepair in the event of an earthquake with a seismic intensity of 7

taking various steps on operational and managerial fronts as well,and applies these standards to all new buildings developed by us

which are reviewed when required.

regardless of asset type (office, commercial, hotels and ryokans,   With regards to the responses against COVID-19,we confirmed

residential and others).

the status of infections at building management companies and   In addition, Hulic ensures that its new office buildings meetbuilding tenants in buildings owned by Hulic in collaboration

the highest earthquake resistance standards by equipping themwith Hulic Building Management Co., Ltd. in an effort to avoid

with earthquake-absorbing and earthquake-damping structures

standstills in building management operations and prevent the

Facilities and Stockpiles for Sustaining Business Operations

and other technologies. We made the percentage of buildings

spread of infection among tenants.

We are proactively carrying out measures to strengthen the business continuity capabilities of our head office functions during an emergency.

meeting internal earthquake resistance standards: 100% each year

The following measures have been taken at the Hulic Head Office Building.

as one of non-financial KPIs and disclose the result. Additionally,

1.Adopts earthquake-absorbing structures that enable building

for existing office buildings, we carry out seismic retrofitting to

WEB

Framework for Collaboration and Cooperation with Related Parties andBusiness Partners
https://www.hulic.co.jp/en/sustainability/social/dealings/#anc4

Corporate Governancemessaging service and safety confirmation system, as well as

Social Initiatives

Environmental Initiatives

Establishment of the Basic Plan for Business Continuity

Our Approach to Sustainability

Corporate Governance Initiatives

functions to operate even during an earthquake with a seismic
2.Features emergency generators that can operate continuously for

In November 2013, Hulic's business continuity framework

and business continuity programs. At the same time, Hulic received(highlighted above) was recognized with a DBJ BCM rating froma favorable loan based on this rating. This marks the first time that

3.Secures food and drinking water to last more than seven days

the Development Bank of Japan. The decision for the rating, thea company from the real estate industry has received the highest

For buildings which we develop or reconstruct (office buildings, commercial

highest from the Bank, praised Hulic for our disaster prevention

rating from Development Bank of Japan.

properties and hotels), we also stockpile water, set up a drainage system,

Summary of the DBJ BCM Rating:and install emergency back-up generators that can generate power

The DBJ BCM rating was established by the Development Bank of Japan (DBJ) and recognizes companies with particularly noteworthy business continuity management (BCM).
The rating is based on a comprehensive evaluation using tangible and intangible aspects of a company's BCM initiatives, including its ability to quickly restore operations
following a natural disaster.

up to six days

continuously for three days.

External Evaluation

Hulic was the First in the Real Estate Industry to Receive the Highest Rating of DBJ BCM

intensity of seven

Emergency back-up generator

106 Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021 107

Corporate Governance Initiatives

Compliance Manual
Pursuant to Basic Principles of Corporate Conduct and Code of
Conduct, the Compliance Manual stipulates the following items
as rules for promoting compliance by all officers and employees of
the Group.
In addition, we make sure that everyone understands theCompliance Manual and actively puts the principles into practiceby providing compliance training and disseminating compliancerelated informatoin.

 C ompliance trainings for all officers and employees Number of trainings conducted: 5 times《Results in FY2020》 ●Number of dissemination of compliance news: 12 times① Respect human rights and prohibit
discrimination and harassment② Comply with laws and rules③ Conduct business in a faithful and fair manner④ Manage information appropriately⑤ Adhere to insider trading regulations⑥ Avoid involvement with anti-social forces⑦ Be considerate of environmental conservation⑧ Maintain and encourage the best communication possible⑨ Respect intellectual property rights⑩ Prohibit bribery, and rules concerning gifts and entertainments⑪ Ensure transparency and reasonableness of transactions

Compliance Promotion Mechanism
Compliance Training

In accordance with the Compliance Rules, we have built away to build an effective compliance system that matches theCompany-wide system composed of the Board of Directors at theCompliance Rules set by each company. Hulic receives applications

We regularly provide training on themes that correspond with theand new hires as well as external training for newly appointed

top, the Compliance Committee, the senior executive managing

and reports on a regular basis and, as required, on the status ofCompliance Manual, including prohibiting bribery and handlingofficers, including at affiliated companies. In addition, in FY2020

officer in charge of compliance, and compliance officers of eachcompliance at each company, which improves our understanding

gifts and entertainment, intellectual property rights, insider

we provided training on prevention of abuse of power to thedepartment. In addition, affiliated companies under managementof the situation and enables an appropriate response, when

trading, and severing all relations with anti-social forces to raisemanagers.

necessary.

awareness of compliance among all employees. In addition toby the Company are monitored and managed in a centralized

Environmental Initiatives

Fundamental
Approach

Hulic has established Basic Stance outlining its approach for achieving Corporate Philosophy
and the Basic Principles of Corporate Conduct, which clarifies the Basic Stance. Additionally, theCompliance Manual, which reflects changes in business environment and social trends, stipulates
actions that must be followed commonly in the Hulic Group in everyday business execution. As
the basis for promoting compliance, we are inculcating Compliance Manual to all employees.
Each and every employee will strive to fulfill the trust of every stakeholder and fulfill Hulic's
social responsibilities by complying with applicable laws and regulations, and company rules aswell as engaging in business activities based on a high standard of ethics.

Our Approach to Sustainability

Compliancetraining on themes in the Compliance Manual, we also provide

Compliance Committee
Headed by the President, the Compliance Committee convenes four times a
year, in principle.
The Committee deliberates on important matters related to compliance, such asrevisions to the Compliance Rules and the Compliance Manual, and formulationof a compliance program. The Committee also identifies and makes decisions toimprove compliance, including information management.

Compliance Program
The Compliance Committee formulates a compliance program as animplementation plan to promote compliance, on a Company-wide basis. The
results of the program are reported to the Compliance Committee. Moreover,affiliated companies create compliance programs in the same manner and reportprogress and achievements to the Company.

hold discussions, as needed. We also provide compliance-related
news and Q&As once a month on our intranet to supplement thetraining. Other related training includes training for new recruits

Frequency: 5
 sessions implemented (four times for all employees, once for
officers), dissemination of compliance-related news 12 times
No. of participants: A
 ll employees (including temporary staff)

Treatment of Compliance Violations

Compliance Promotion Framework

When a compliance issue (or suspected) is detected, such asmeasures and report to the Company.

violation of applicable laws and regulations or Hulic’s code of ompliance violations regarding Hulic businesses and services●C

conduct, the issue is immediately reported to a complianceand means of transaction (FY2020): 0 incidents

officer or to the department in charge of compliance and the・Number of violations of laws and regulations and payment ofsenior executive managing officer in charge of compliance by acompliance manager. The facts are investigated as necessary andnecessary measures are taken to determine the causes and prevent

rules: 0 incidents

External Evaluation

recurrence. Hulic Group companies also implement the similarfines: 0 incidents
・Number of violations or suspected violations of Hulic Company

Social Initiatives

Board of Directors
The Board of Directors makes decisions on the issues discussed at theCompliance Committee and receives reports from the Committee regarding
important matters for compliance.

Compliance Training Sessions in FY2020

Corporate Governancereal estate industry-specific training on important themes and*1 Assigned to each department to promote compliance*2 Assigned to each department to assist the Compliance Officer

108 Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021 109

Corporate Governance Initiatives

they consult with the compliance officers of their departments
on matters involving compliance issues, or when they areuncomfortable consulting with compliance officers due to thenature of the issues involved.
The direct report to the Compliance Hotline can be made on
issues including human rights violation, corruption, bribery andharassments, etc. Compliance Hotline is made known to all Group
employees through compliance training.
Reports received by the Hotline internal contacts will trigger a factfinding investigation and provide feedback to the whistleblower
about the process details and related matters. Reports received
by the external contacts (designated lawyers) will be handled by
the lawyer-in-charge, who informs the internal contacts of thewhistleblower’s report (in the event the report is made by an
employee of a Group company, the point of contact will be theinternal contact at the Group company and the general managerof the Hulic Legal and Compliance Department), with the in-house
contact conducting any necessary fact-finding investigations, theresults of which are reported to the lawyer-in-charge. Based on thefindings of this investigation, the lawyer-in-charge will provide thewhistleblower with feedback.
Additionally, if the report involves matters related to fraud
involving the management, the lawyer-in-charge who received thereport will also inform the Audit & Supervisory Board members(including Audit & Supervisory Board members at the Company
in the case of a report from a Group company), and the Audit &Supervisory Board members will conduct the necessary fact-finding
investigations, report the results to the lawyer-in-charge who
provides feedback to the whistleblower.

Officers and employees (including temporary and/or part-time
staff, etc.) and retirees and employees of business partners.
Target matters
In the event that violations of compliance including humanrights violation, corruption, bribery, non-compliance with labor
issues, violation of applicable laws and regulations related
to various harassments and violation of Company code of   Moreover, twice a year, we monitor whether each department

bribery and clearly define prohibited activities specifically that leadis appropriately receiving business entertainment and gifts, andto corruption and bribery in the section prohibit bribery, and rules

confirm no bribery is accepted or received, and then identifies andconcerning gifts and entertainments of the Compliance Manual.

assesses the associated risks. In case of doubt, anyone can makeIn addition, we conduct compliance training for all employees asa report to the Compliance Hotline. Once received, all reports areappropriate to build their awareness on prohibited activities such

handled swiftly and appropriately.

as giving gifts to public officials and excessive entertainment and《Results in FY2020》 ● Political contributions: none

● Expenses for corruption related fines, penalties or legal settlements: none
● Number of employee reprimands or dismissals due to actual or suspected corruption: none

conduct are suspected.
Whistleblower
WhomeverWhistleblower protection
Reports can be made anonymously. The whistleblower’s privacy

Initiatives for Fair Competition

is respected, and they will not be treated unfavorably becauseof the report.
Response when a report is madeFundamental
Approach

When a report is made, we investigate the facts and respond

We are thoroughly committed to our initiatives to ensure the transparency and rationalityof transactions to make sure they are appropriate and fair so that no transaction harms theinterests of the Company or shareholders, or provokes any concern.

promptly while giving due consideration to the privacy of thereporter.
When a report is made in writing or by e-mail, the Hotline willpromptly notify the reporter that the report has been received.
Subsequently, the whistleblower’s point of contact will consider
the necessity of an investigation in fairness and sincerity, and inprinciple, notifies the whistleblower of future measures.
Internal contacts: G eneral Manager of Corporate Planning Department,
Joint General Manager of Corporate Planning
Department, General Manager of Legal & ComplianceDepartment (Chief Compliance Officer); an additional
female manager contact was added in 2018
External contacts: A
 ttoney's offices; additional legal firm was added aside
from our legal counsel
All Group companies have established report reception systems similar to
the Company.

Compliance through Outsourcing Contractors

The Hulic Compliance Manual stipulates the following specific matters regarding the establishment of a fair competitive order.
● Compliance with all applicable laws and regulations and internal● Compliance to the arm's length transaction principles● Prohibition of the provisions of benefits to shareholders

rules● Compliance with antitrust laws and related regulations● Respect for intellectual property rights● Prohibition of bribery, and excessive entertainment and gifts● Appropriate information management

Social Initiatives

that appropriate corrective actions will be implemented after

Targets

on prohibition of corruption and bribery.

government and local government. We also strictly prohibit any● Prohibition of conflicts of interest

Tax Transparency
Fundamental
Approach

Hulic considers compliance to be one of its most important management matters. Hulic
ensures transparency, complies with applicable laws and the spirit of the law, and pays taxes
appropriately and fairly in all countries where we do business.

Tax Payment Policy

As for outsourcing by the real estate business division, we havecomprehensive decision by carefully checking their past performance

Hulic considers compliance to be one of its most important

ensures the transparency of transactions, including tax affairs,

made fair trades based on “rules for real estate outsourcing

and their ability to execute operations, the effectiveness of their

management matters, complies with applicable laws andand in accordance with the spirit of law, pays taxes appropriately

management,” respecting relevant laws and regulations as well as

business execution system and the clarity of the procedures, theregulations and the spirit of the law, and engages in sincere andand fairly in all countries where we do business. Further, we will

instructions by administrative organizations.

appropriateness of the operation management system, possible

fair corporate activities that do not go against social norms. In

build relationships of trust with tax authorities in each country

When selecting an outsourcing contractor, we make arelationships with anti-social forces, and other items.

line with our Compliance Manual based on the “Basic Principles

by increasing tax transparency without using tax planning or tax

of Corporate Conduct” and “Our Code of Conduct,” Hulic

havens intended to avoid taxes.

Severing Ties with Anti-Social Forces
Board of Director Oversight

The Compliance Manual states that no anti-social activities will

implementation at the organizational level, and a range of

be tolerated and that all relationships with anti-social forces

measures have been introduced to severing any ties with anti-social

Financial reports such as the Company's consolidated financial

accounting auditor. Additionally, Audit & Supervisory Board

must be severed. As a concrete measure to promote severing

forces, including creating inhouse procedures, effective ways tostatements are submitted to the Board of Directors for approval inmembers receive reports and the Board of Directors responds

any transactions with anti-social forces, we established Rules for

ensure employee safety, and coordination with specialist external

accordance with laws and regulations and the Company's Articles

promptly when the accounting auditor discovers fraud, or points

Counteracting Anti-social Forces, which we are now practicing.

organizations.

of Incorporation after they have been audited by an external

out inadequacies or issues including our tax affair.

Corporate Governanceor external Compliance Hotline when they consider it unlikely

with business partners, including public agencies such as theExternal Evaluation

Our employees are encouraged to report directly to the internal

make sure that our employees are communicated of Hulic's policy

Environmental Initiatives

Compliance Hotline

Our Approach to Sustainability

Initiatives for Anti-corruption
Hulic prohibits any act or suspicious act that leads to corruption

In addition, the Legal & Compliance Department promote

110 Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021 111

Corporate Governance Initiatives

Ernst & Young ShinNihon LLC conducts audits of the financial statements and internal controls as an Independent Accounting Auditor.

Fundamental
Approach

We strive to ensure appropriate and timely disclosure of information, and actively conduct
briefing sessions on financial results as well as investor meetings for individual investors.
These represent our efforts to achieve diverse forms of mutual communication.

Tax Payments by Country
and the United States. The Group's business bases are located only

than Japan are extremely limited, thus tax payments by Hulic Co.,in Japan. The amount of taxes paid by country was as follows.

Ltd. (non-consolidated), by country in FY2020 was 100% in Japan

Hulic Co., Ltd. (non-consolidated)(JPY Mln)

FY2019FY2020Japan

29,523

32,954The U.S.

4

329,527

32,957

Total

Information Disclosure Policy

Shareholder Incentives

In accordance with the Disclosure Policy, we are aiming at fair,

To show our appreciation to shareholders for their continued

timely and accurate information disclosure for shareholders andsupport, we annually present the gift of a gourmet catalog toinvestors in order for them to make investment decisions.

shareholders with 300 shares or more from which they can choose

Not only to comply with relevant laws and regulations, we actively

an item equivalent to JPY3,000. For those with more than three

disclose management strategies and financial information, etc.

years holding, we double

so that investors are able to understand more of our businessthe gift to two items

activities. We also promptly disclose information which we believeworth JPY6,000 in total

to be helpful for the investors to make investment decisions on thefrom a catalog.

Environmental Initiatives

Currently, our business and investment activities in countries other

Company’s website, although they are not applicable to the timely
disclosure rules and relevant laws, etc.

Information Security Management

Information Security Management System

and usage, managing them appropriately to ensure confidentiality,
integrity and availability.

We consider appropriately returning to our shareholders as amanagement matter. Our basic policy is to provide stable dividends

The 91th ordinary general meeting of shareholders was held atpayment based on our business performance trend. Under the

Hulic Head Office on March 23, 2021 with attendance of a lot

Medium- and Long-Term Management Plan, we are targeting aof shareholders. In an effort to enliven the general meeting ofdividend payout ratio of around 40% by FY2022. The dividend

shareholders, invitations to the meeting were sent out early, andpayout ratio in FY2020 was 37.8%.

we set up an electromagnetic voting method. In this meeting,WEB

Specifically:

Dividend Payments and Payout Ratio
https://www.hulic.co.jp/en/ir/stock/dividend.html●Organizational security control measures to appropriately implement andEnhancement of Various IR Tools
In addition to correspondences to shareholders issued semiannually,
we post the latest topics through the Investor Relations site of our
website in a timely manner. E-mails are also sent to allow investors
to receive information in more timely manner. Every time news
about the Company is released, we send registrants by E-mail.
(Registration is available on our website.) In the financial results
briefing session, we make efforts to provide easy-to-understandpresentations by using PowerPoint visual materials. These briefing

Privacy Policy

sessions (in Japanese and English) are also available either live or

In full respect of the importance of protecting personal information

to any claims or concerns regarding the handling of personal

on recordings on our website. Moreover, we provided audio-only-

we properly handle personal information in compliance with theinformation, and review and improve, as necessary, our provisions

recordings of the financial results briefing sessions as we were

Personal Information Protection Law (the "Privacy Law") and otherfor the handling and safeguarding of personal information.

unable to hold in-person

relevant laws and guidelines, and take appropriate measures to

We did not identify any substantiated complaints concerning

briefing sessions inensure that personal information is secure. We make efforts tobreaches of customer privacy and there were no significant

FY2020. Whenit becomes

conduct training and education for our employees so that personal

incidents or cases regarding leakage of personal data in FY2020.

possible to resume in-WEB

Privacy Policy
https://www.hulic.co.jp/en/siteinfo/privacy.html

person briefings in the
future, we plan to return
to video distribution.

112 Hulic Co., Ltd. Sustainability Book 2021

we tried to explain about our business activities in an easy-tounderstand way, using image materials, etc. The childcare nurseryin the Head Office was opened to shareholders in order to enablepromote information management● H uman security control measures such as education and training for
employees, regular inspections and audits, etc.
● P hysical security control measures such as appropriate access control● T echnical security control measures to ensure the appropriate management of
information assets
Confidentiality: E nsures only authorized persons can access information assets
Integrity:	Protects the accuracy and completeness of information andprocessing methods
Availability:	Ensures authorized users have access to information assets
when needed

information is appropriately handled. We immediately respondApproaches at General Shareholders'Meetings

those with children to take part in the meeting without worry. We
will strive to have shareholders more understand Hulic throughcommunication with them.
Corporate Governance

Hulic categorizes information assets according to their importance

Shareholders Return

External Evaluation

Fundamental
Approach

We recognize that it is our social responsibility to effectively protect our information assets.
To protect these assets from various threats, we have established an information security
management system, and are ensuring that we operate and manage information asssets
carefully based on information management rules that include rules on handling information.

Social Initiatives

Audit

Our Approach to Sustainability

Initiatives for Shareholders and Investors

Hulic Co., Ltd. Sustainability Book 2021 113

Corporate Governance Initiatives

Briefing Session for Private Investors

Our Approach to Sustainability

Briefing Sessions for Institutional Investors
and Analysts

We are proactively working on IR activities to make ourselves better

Briefing sessions on financial results (at the end of the 2nd

understood by individual investors. We participate in seminars andquarter and fiscal year) are held semiannually by Hulic's top

fairs, etc. for individual investors to create opportunities for moremanagement mainly for institutional investors. We also conductindividual investors to learn about us. We will promote IR activities

many one-on-one meetings in Japan, through which we visit

that provide us with opportunities to communicate directly withindividual institutional investors to explain Hulic's businessindividual investors.

activities. Furthermore, we have proactively rolled out IR activities

We suspended our briefing session for private investors (including

overseas, visiting institutional investors in Europe, the U.S., andIR fairs and other events) in 2020 in light of spread of COVID-19.

Asia, etc. Through these activities, we endeavor to foster a deep
understanding of Hulic among institutional investors.
Environmental Initiatives

We suspended visiting ouroverseas institutional investors
and held online meetings
instead in 2020 in light of
spread of COVID-19.

Selected as Indices on ESG Efforts
Hulic has continuously been selected in four indices as a company

uses these four indices as benchmarks of ESG investments.

who took excellent initiatives on environment, social andgovernance (ESG). The
Investment Fund (GPIF)
This page is intentionally left blank.
The External Evaluation start from the next page.

Social Initiatives

Government Pension

Disclaimer:FTSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that Hulic Co., Ltd. has been independently assessed
according to the FTSE Blossom Japan Index, and has satisfied the requirements to become a constituent of the FTSE Blossom Japan Index. Created by the
global index provider FTSE Russell, the FTSE Blossom Japan Index is designed to measure the performance of Japanese companies demonstrating strong
responsible investment funds and other products.

WEB

FTSE Blossom Japan Index
https://www.ftserussell.com/products/indices/blossom-japan

Disclaimer: The inclusion of Hulic Co., Ltd. in any MSCI index, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute asponsorship, endorsement or promotion of Hulic Co., Ltd. by MSCI or any of its affiliates. The MSCI indexes are the exclusive property of MSCI. MSCI and the
MSCI index names and logos are trademarks or service marks of MSCI or its affiliates.

Corporate Governance

Environmental, Social and Governance (ESG) practices. The FTSE Blossom Japan Index is used by a wide variety of market participants to create and assess

External Evaluation of IR Activities
various activities. In 2020, our website was selected as the excellent
website in overall ranking in Nikko IR's All Listed Company Website
Ranking 2020. In addition, our website won the bronze prize in
Gómez IR's Site Ranking, and won the Commendation Award inInternet IR Award 2020 by Daiwa Investor Relations Co., Ltd.

114 Hulic Co., Ltd. Sustainability Book 2021

External Evaluation

Hulic's website discloses timely and detailed information on our

Hulic Co., Ltd. Sustainability Book 2021 115

Included in “MSCI Japan ESG Select Leaders Index” and “MSCI Japan Empowering Women Index (WIN)”Taking proactive actions against ESG-related risks such as

emissions (aggregate of Scope 1 and Scope 2) and CO2 emissions

Hulic has been selected for a constituent of the “MSCI Japan ESG

of 50% in each of the global industry classification standards

environmental issues including climate change, working

intensity, number of greening projects, water consumption, waste

Select Leaders Index” and the “MSCI Japan Empowering Women(GICS®).

environment and human rights and contributing to SDGs are one

disposal, employment ratio of persons with disabilities, usage rate

Index (WIN)” by MSCI Inc.

The MSCI Japan Empowering Women Index (WIN) is comprisedof Hulic's material management matters. We believe it is importantof paid leave, and percentage of employees who received medical

The MSCI Japan ESG Select Leaders Index is constructed byof Japanese companies, chosen from the largest 700 Japanese

to provide reliable information concerning our sustainability-related

checkups. Indicators that have been assured are marked with “

selecting companies assessed as outstanding in terms of ESG

companies by market capitalization, with a high level of genderactivities. As such, we received independent assurance from an

We will continue to disclose information on the progress of ourevaluations from companies that comprise the parent index (MSCI

diversity in their workforces compared to sector peers classified byindependent assurance provider, KPMG AZSA Sustainability Co.,sustainability-related activities to the stakeholders while strive toJapan IMI Top 700 Index), aiming to achieve market capitalization(GICS®).

Ltd., on the following eight items: total energy consumption, CO2

improve quality of disclosure using PDCA cycle.

External Evaluations

Disclaimer: T he inclusion of Hulic Co., Ltd. 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 Hulic Co., Ltd. by MSCI or any of its affiliates. The MSCI indexes are the exclusive property of MSCI. MSCI and the MSCI index names andlogos are trademarks or service marks of MSCI or its affiliates.

Included in FTSE4Good Index Series
Series. The FTSE4Good Index Series is designed to measure theWEB

FTSE4Good Index Series
https://www.ftserussell.com/products/
indices/FTSE4Good

performance of companies demonstrating strong Environmental,

Included in S&P/JPX Carbon Efficient Index

Social and Governance (ESG) practices.

Disclaimer: F TSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that Hulic Co., Ltd. has been independently assessed according to
the FTSE4Good criteria, and has satisfied the requirements to become a constituent of the FTSE4Good Index Series. Created by the global index provider FTSE Russell,
the FTSE4Good Index Series is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance (ESG) practices. The
FTSE4Good indices are used by a wide variety of market participants to create and assess responsible investment funds and other products.

Selected for FTSE Blossom Japan Index

Hulic has been selected as a constituent of the S&P/JPX Carbon   Accordingly, Hulic has been continuously included in all four

Efficient Index, which was jointly developed and released in 2018indices selected by the Government Pension Investment Fund (GPIF)

by S&P Dow Jones Indices and Japan Exchange Group (JPG).

for ESG investment indices: FTSE Blossom

The S&P/JPX Carbon Efficient Index is designed to measure theJapan Index, MSCI Japan ESG Selectperformance of companies in the Tokyo Stock Price Index (TOPIX),

Leaders Index, MSCI Japan Empowering

while overweighting or underweighting those companies that

Women Index and S&P/JPX Carbon

have lower or higher levels of carbon emissions to the revenue andEfficient Index.

Social Initiatives

Hulic has been a constituent company in the FTSE4Good Index”.

Our Approach to Sustainability

Third-party Assurance

Environmental Initiatives

External Evaluation

actively disclose information of carbon emissions.

Hulic has been selected for a constituent of the FTSE Blossom Japanenvironmental, social and governanceIndex. Created by the global index company FTSE Russell, the FTSE

(ESG) practices in Japan.

that reflects the performance of companies demonstrating strong
WEB

FTSE Blossom Japan Index
https://www.ftserussell.com/products/indices/
blossom-japan

Disclaimer: F TSE Russell (the trading name of FTSE International Limited and Frank Russell Company) confirms that Hulic Co., Ltd. has been independently assessed according to
the FTSE Blossom Japan Index, and has satisfied the requirements to become a constituent of the FTSE Blossom Japan Index. Created by the global index provider FTSE
Russell, the FTSE Blossom Japan Index is designed to measure the performance of Japanese companies demonstrating strong Environmental, Social and Governance (ESG)
practices. The FTSE Blossom Japan Index is used by a wide variety of market participants to create and assess responsible investment funds and other products.

Received a 4-star rating in the Nikkei SDGs Management Survey
The Nikkei SDGs Management Survey, a survey that has been

Survey in which we have been ranked 1st in the real estate/conducted annually by the Nikkei, is designed to rate companies

warehouse industry for nine consecutive years until 2019. The

that are aligning the Sustainable Development Goals of the United

survey addresses from four themes, i.e., SDGs strategy/economic

Nations to management of the companies and pursuing corporate

value, social value, environmental value and governance andvalue increase by solving environmental, economic and social

gather information by sending questionnaires to the participant

issues through business activities. We have participated in thecompanies and from publicly available

second survey conducted in 2020 for the first time with the rest ofdata sources.

Corporate Governance

Blossom Japan Index is designed as an industry neutral benchmark

713 listed and non-listed Japanese companies and have received
a 4-star rating (deviation value of 60 to 65). The Nikkei SDGs
External Evaluation

Management Survey replaced their Environmental Management

116 Hulic Co., Ltd. Sustainability Book 2021

Hulic Co., Ltd. Sustainability Book 2021 117

existence with society as one of the basic strategies in its Medium-

In regard to the support for raising the next generation, Hulic aims at a higher level than the

Benchmark (GRESB) Real Estate Assessment 2020. It also obtainedand Long-term Management Plan, (ii) managing ESG-related KPIs/

legal requirements and has established various in-house measures. We are working to develop

the Green Star designation for six consecutive years.

targets through identifying materiality, and (iii) business operationa work environment in which employees can take childcare leave more easily in addition to

GRESB is a benchmark which was founded in 2009 mainly by awith emphasis on dialogues with

providing economic support to employees who take the leave. In recognition of our efforts,

group of major pension funds in Europe. This benchmark measures

stakeholders such as customers, business

Hulic has received a certification of “Platinum Kurumin” from the Minister of Health, Labour

sustainability and performance of the real estate sector. Hulic

partners and the local communities.

and Welfare as the Company supports employees in raising the next generation at a distinctive

received a high recognition for its progress in (i) implementing

level. At the same time, we also received “Kurumin” certification for the third time (in 2010,

management that emphasizes sustainable co-creation and co-2017 and 2020).

Received CASBEE-Wellness Office Certification

Certified as Health & Productivity Management Outstanding
Organization(Small and Medium-sized Enterprises Category)

Hulic Head Office building and Hulic JP Akasaka Building received

initiatives of buildings that support the

Hulic was certified as a Health & Productivity Management Outstanding Organization in 2021 (Small

highest rank of “S” in CASBEE-Wellness Office* certification (issued

health and comfort of building users,

and Medium-sized Enterprises Category) for the third consecutive year in recognition of our healthby Institute for Building Environment and Energy Conservation).

factors that contribute to intellectualand productivity management initiatives. The award has been promoted by the Ministry of Economy,   Comprehensive Assessment System for Built Environment

productivity improvement, and theTrade and Industry in conjunction with the Nippon Kenko Kaigi to advance health and productivity.

Efficiency (CASBEE) assesses the specifications, performance, andperformance of safety and security.

Environmental Initiatives

Hulic received a 3 Star rating in the Global Real Estate Sustainability

Corporate Certification for Eruboshi Based on the Act on Promotion of Women’sParticipation and Advancement in the Workplace Obtained
DBJ Green Building

As a result of the formulation of the Action Plan based on thesystem/ onsite childcare and nursery facilities), with the aim of

DBJ Green Building certification system is a program to comprehensively assess the building’s environmental

Act on Promotion of Women’s Participation and Advancement inensuring that female employees will be able to continue playing an

performance, crime and fire prevention, user comfort and convenience, cooperation with stakeholders, etc.

the Workplace, Hulic attained the highest rank in the “Eruboshi”

active role in the company after childbirth and while parenting.

by the Development Bank of Japan Inc. Hulic obtained the highest certification of “5 Stars” for Hulic Headcertification presented by the Minister of Health, Labor andSince we have been facilitating in creating a corporate culture

Office Building and three buildings in reconstruction projects including Hulic Shinjuku Building, and one

Welfare in 2016, in recognition of the Company as an outstanding

where employees respect the diversity among them and canbuilding was granted “4 Stars.”

company in the implementation of initiatives to promote female

perform best, we were able to meet theempowerment at the workplace. We have put effort into creating

criteria for the certification establishedan environment where diverse human resources can performby the Ministry of Health, Labour and(diversity management), especially into establishing a top-classWelfare and obtain the highest ranksystem for nurturing the next generations (a childcare support

certification.

Approaches to JHEP Certification
JHEP is a program to evaluate and certify activities that contribute to conservation and restoration of
biodiversity, which was established and is operated by Ecosystem Conservation Society-Japan. Hulic carries
out efforts to conserve and restore local vegetation as part of its reconstruction projects for company-owned
have received the JHEP certification.

Recognized for Inclusion in Diversity Management Selection 100
Diversity Management Selection 100 is a commendation system

employees improve their professional skills, Hulic is working to

run by the Ministry of Economy, Trade and Industry since 2012, totransform our organizational structure, develop an employee-

recognize companies of various sizes and from different sectors

friendly work environment, and further enhance our benefit

for their proactive initiatives towards diversity management as

programs. We believe thea contributing factor behind the economic growth of Japan. By

achievement was the result ofcommunicating best practices, this aims to broaden the fields that

our collective efforts.

encourage diversity.
From the standpoint of empowering female employees and helping

118 Hulic Co., Ltd. Sustainability Book 2021

External Evaluation

properties from the standpoint of safeguarding biodiversity. Our approach to biodiversity and many projects

Social Initiatives

Received "Platinum Kurumin" and "Kurumin" Certifications

Corporate Governance

Received a 3 Star rating and the Green Star designation from GRESBOur Approach to Sustainability

External Evaluation

Hulic Co., Ltd. Sustainability Book 2021 119