Sustainability Report
2022

Activia Properties Inc.
July 2022

IndexIntroduction• Top Messages• About API

3
5

Sustainability Policy/
Structure for
Promotion• Our Structure to• Promote Sustainability• Materiality

9
10

Topics13

External Certifications/International Initiatives
Governance• Governance Structure to• Maximize Our Unitholder
Value• APIʼs Corporate• Governance• TRMʼs Corporate
Governance• Compliance• Risk Management

15

18
20
22
23
25

Environment• Addressing Climate
Change• Initiatives throughReal Estate Investment• Measures Taken in
Owned Properties• Environmental
Performance• Green Certifications• Initiatives with
Suppliers and Tenants• Sustainable Finance

About This Report
27
35
36
38
39
40
42

Social• Stakeholder Engagement
45• Employee Engagement46• Diversity
50• Key Employee Data
52
• Contribution to
Local Communities
53• Tenant Engagement55• Supplier Engagement56• Initiatives toward Unitholders
and Investors
57
ESG Data• GRI Index• Independent AssuranceStatement

Activia Properties Inc. (“API”) and TLC REITManagement Inc. (“TRM”) to which API
entrusts the management of its assets, aremaking the best effort to disclose information
related to the sustainability initiatives to theinvestors and other stakeholders. Within thisscope, this report is issued to illustrate theESG (E: Environment, S: Social, G:
Governance) initiatives of API and TRM
which are essential to contribute to asustainable society.

Scope of Report
PeriodFrom April 2021 to March 2022
(excl. some data)

Entities

API and TRM

Contact
Dept.

Address

Shibuya Solasta 18th floor, 21-1
Dougen-zaka 1chome, Shibuya-ku,
Tokyo, JapanPhone+81-3-6455-3377

Hours

9:30 - 18:00(excl. Saturday, Sunday andholidays)

58
71

Activia Management Division,
TLC REIT Management Inc.

2

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Top Messages
From Executive Director of API
To build a portfolio with a stable and sustainable demand from our customers, API has promoted since its IPO various initiatives toreducing our environmental footprint and contributing to the surrounding communities and environment, believing that for our portfolio,
those elements are just as important as others such as the location, use, scale, and quality of properties.
Since 2013, we are participant to the GRESB Assessment, an ESG benchmark in the real estate sector, and are using the results tocontinuously improve the effectiveness of our initiatives. In July 2019, we identified our Materiality with publicly announcing our targets inenvironmental performances and a more practical management policy to achieve them.
To accelerate and develop its sustainability initiatives, API set a series of KPIs including procurement of renewable energy, green bondutilization in debt finance in January 2022, and announced other challenging targets related to renewable electricity and CO2 emission in
July 2022. Also, API has made public in this report the information disclosure based on TCFD (Task Force on Climate-Related Financial
Disclosures) recommendations and is largely promoting its effort toward environment.
API will further develop its efforts on sustainability, deepening a trustworthy relationship with the stakeholders while investing in andmanaging real estate capable of sustaining customer demand and gathering people, seeking to become an entity capable of broadlyenergizing society as the name “Activia” suggests.
I hope this Sustainability Report will provide you with a broader understanding of APIʼs sustainability initiatives and we will continue to work
together with you on social issues.

Nobuhide Kashiwagi
Executive Director
Activia Properties Inc.
3

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

From President & CEO of TRM
TLC REIT Management Inc. (“TRM”) is an asset management company aiming to maximize its shareholder value with a philosophy that
we should contribute to the development of our society through a reliable relationship with all the stakeholders.
In recent years, issues related to a sustainable society such as climate change, working style reform and relations with local communities
are recognized as risks by unitholders and investors of our investment corporations, and preparedness for those challenges is gaining
more importance. With a recognition that promotion of ESG (Environment, Social, Government)-related initiatives in a strategic way
serves to improve our corporate value, TRM is committed to work on various sustainable efforts.
In April 2019, the “Sustainability Policy”, a basic policy to contribute for a sustainable society, was established, which can be regarded asa milestone in our efforts toward sustainability. Further in July same year, TRM identified the Materiality, the mid- to long-term material
issues to be addressed by the company and has implemented different efforts including preparing internal systems.
Recently, TRM has strengthened its supportive stance toward international initiatives, as represented by the signatory to PRI (Principles
for Responsible Investment) in December 2021, and its endorsement for the recommendations of TCFD from January 2022. TRM, alongwith API, will continue to sincerely work on the targets set in line with our Materiality such as reduction of environmental impact, withmaking appropriately disclosure on our visions and achievements to our stakeholders to develop a further trustworthy relationship withyou all.

Masaoki Kanematsu
President & CEO
TLC REIT Management Inc.
4

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

About API
API is a diversified J-REIT investing in commercial properties and offices sponsored by Tokyu Land Corporation (“TLC” or the “Sponsor”).
API intends to maintain a competitive portfolio in the medium to long term with the objective to maximize its unitholder value, by investing primarily in urban
retail properties and Tokyo office properties with making these investments upon careful consideration of location, size, quality, specifications, and suitability
for use by tenants.
<Structure>

REIT (API)Asset Manager (TRM)

Name

Activia Properties Inc.

Name

Executive Director

Nobuhide Kashiwagi

President & CEO

TLC REIT Management Inc.
Masaoki Kanematsu

Address

Shibuya Solasta 18th floor, 21-1 Dozen-zaka
1chome, Shibuya-ku, Tokyo, 150-0043, Japan

Address

Shibuya Solasta 18th floor, 21-1 Dozen-zaka
1chome, Shibuya-ku, Tokyo, 150-0043, Japan

Contact

Activia Management Division, TLC REITManagement Inc. Phone: +81-3-6455-3377

Capital

200 million yen

Securities Code
Listed Date
Fiscal Period End

3279
June 13, 2012
May 31 and November 30

Shareholder
Business Segment
Fiscal Year End

Tokyu Land Corporation (100%)
Investment management
March 315

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Basic investment policies
API invests primarily in urban retail and Tokyo office properties utilizing thecomprehensive support and capabilities of the Tokyu Fudosan Holdings Groupʼs value
chain and perform strong governance structure aimed at maximizing unitholder value.

Governance

Environment

Breakdown by
category
UR 33.6%

TO 47.3%

Office58.5%

Retail
43.5%

AA 19.1%

Core asset
ratio

80.9%
(UR+TO)

SocialESG Data

Breakdown by area
Other major
cities of
Three
Japan
metropolitan 1.9%
areas
24.9%
Other wardsof Tokyo
1.8%

Asset size

6 centralwards of
Tokyo
71.4%

¥543.3bn(Acquisition price basis)(Note) As of June 30, 2022

Tokyu Fudosan Holdings Group’s value chain
TRM, to which API entrusts management of its assets is one of the member
companies of Tokyu Fudosan Holdings (“TFHD”) Group (or the “Sponsor” Group), a
comprehensive real estate developer. We take advantage of the TFHD Groupʼs multifaceted and comprehensive knowhow and value chain to consistently acquire highquality properties, as well as to operate and manage the properties so that the valueof the properties would be maintained and improved. By doing so, we plan tomaximize the unitholder value. While leveraging the value chain of TFHD Group, we
also try to ensure and enhance various systems supporting our strong governancestructure in order to maximize our unitholder value. The measures include preventive
system against conflict of interests in related-party transactions, alignment of interests
between investors and the Sponsor, as well as amendment to the asset management
fee structure including DPU-linked portion. (Cf. page 18)

Sourcing from TFHD Group(As of June 30, 2022)

87.5％
6

Sustainability
Policy/Structure for
Promotion

Introduction

External Evaluation/
International
Initiatives

TopicsGovernance

Environment

SocialESG Data

History
Since our IPO in 2012, API has continued to work to build a high-quality portfolio which is carefully selected with a focus on location and property quality andgrow and stabilize earnings by expanding assets under management. With a portfolio having grown to over 500 billion yen, API became one of the major
diversified J-REITs.
<History of API>
Sep. 7, 2011

Registration of incorporation, and foundation under Article 166 of
the Act on Investment Trusts and Investment Corporations

Sep. 20, 2011

Implementation of registration by the Prime Minister under
Article 189 of the Act on Investment Trusts and Investment
Corporations(registration no.: Director of Kanto Local Finance Bureau No.73)

June 13, 2012

Listed on the J-REIT section of the Tokyo Stock Exchange(securities code: 3279)<Trend in number of properties and assets under management of API>
42
39

27
Nb. ofproperties

18

18

20

1,704 1,704 1,813

AUM（¥100 mn）

28

30

2,826

21

31

2,929

32
3,267

35

42

39

45

44

44

44

44

5,005 4,990 5,092 5,092 5,092

47

47

5,480 5,480

4,315 4,315
4,079 4,079

3,569

2,310 2,417
1,843

45
40
35
30
25
20
15
10
5
0

12.5 12.11 13.5 13.11 14.5 14.11 15.5 15.11 16.5 16.11 17.5 17.11 18.5 18.11 19.5 19.11 20.5 20.11 21.5 21.11 22.5

7

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Initiatives of API and TRM at a Glance
Since its IPO, API has actively promoted initiatives toward a sustainable society in cooperation with TRM, including organization of TRMʼs internal system allowing
to further develop ESG initiatives.
2017/92020/5

2019/7GRESB Real Estate
Assessment: Recognized as
the Asia Listed Office & Retail
Sector Leader

MSCI ESG Rating
Ranked up to BB

Identified Materiality
Environment
・Reduce environmental
impactAPI

2022/12021/10GRESB Real Estate
Assessment: Recognized as
the top of Japanese listed
participants w/diversified
assets (office & retail)Set environment
KPIs (1)・Portfolio greening
・Sustainablefinancing

2019/2

2016/12

BecameGRESBParticipant
MemberTRM

UN Global Compact
Signatoryby Sponsor Group

Social・Human capital development
as a group of professionals
・Contribution to the local
communities
・Health and well-being of
tenants
・Supplier Engagement

Set environment
KPIs (2)・Procurement of
renewable energy

2022/7

2019/7

Governance・Management framework
corresponding to multifacetedsocial demand towards
sustainable society

2022/7

Released the second
Sustainability
ReportIssued the firstGreen Bonds

2021/6

2019/8
Rebalanced the asset
management fee(Lowered total assetbased fee and increased
DPU and NOI-based fee）

Released inaugural
Sustainability Report

2021/122021/11
Issued the forthGreen Bonds

2022/1Signatory of PRI(Principles for
Responsible
Investment)

Support of TCFD (Task
Force on Climate-related
Financial Disclosures)

2022/7
Disclosure based on
TCFD’s proposals
Governance/Strategy/
Risk Management/
Metrics and targets

2022/42020/9Established Green
Procurement
Standards

2019/4
EstablishedSustainability
Policy

2016

2017

2018

2019

2020

2021/4
Organized Sustainability
Promotion Council andestablished Sustainability
Department

2021

Established
Climate Action
Standards

2022

8

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Sustainability Policy / Structure for Promotion
Sustainability Policy

TRM considers paying consideration to environment and society and strong governance as its mission, and as a member of TFHD Group, it shares the Groupʼssustainability vision. We believe that tackling these issues is a social responsibility and it should help to realize our management philosophy and contributes tothe development of a more sustainable society. The Sustainability Policy has been set to put our beliefs into practice.
For the details of the Sustainability Policy, please refer to TRMʼs website.

Our structure to promote Sustainability

To enhance TRMʼs efforts towards the issues related to environmental or societal consideration, etc. based on its Sustainability Policy, the rules on the
Sustainability Promotion System require that the President & CEO to be the Chief Sustainability Officer and each department appoint one responsible personfrom the department. The Sustainability Promotion Council is to be held with the President & CEO as chairperson. Sustainability Department was established asof April 1, 2021 to expand the functionality of the
Sustainability Promotion System. The Sustainability Department succeeds the ESG-related missions from the Environmental Engineering Department, and wewill further promote our sustainability program.

Sustainability Promotion Council

The Sustainability Promotion Council meets regularly with President & CEO as the Chief Sustainability Officer who assumes the ultimate responsibility, and othermembers from across the organization of TRM and among members, we share relevant information and examine and promote the efforts. External experts areinvited to the Council to consult opinions when needed.

Members of the Sustainability
Promotion Council

Meeting frequency

Main issues to be discussed

Chairperson: President & CEO
Regular members: Directors, Chief Division Officers of Activia
Management Division, Comforia Management
Division, Broadia Management Division andCorporate Management Division, General Managers
of Environmental Engineering Department, andSustainability Department, Compliance Officer
Organizer: Sustainability Department
Every quarter in principle
・Amendment and abolishment of the Sustainability Policy
・Amendment and abolishment of the Materiality
・Matters related to, and common to TRM and investment corporations
・Annual activities planning, report on status

9

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Materiality
In line with the Policy and as a member of the Group, TRM recognizes the materiality issues of the Group and identified its own materiality issues by extracting
societal items which are important over the medium to long term for a sustainable society, with consideration to the environmental efforts API has already made.
This Materiality is shared between TRM and API.
Materiality

Reducing environmental
ImpactRisks(Impact of not addressing materiality)

Opportunities(Business opportunities expected by addressing materiality)

Increased physical risk from escalation of climate change(human damage, property damage, economic damage), risks
associated with a transition to a decarbonized society

・Sharing and executing clear commitment to ESG investment with
officers and employees should provide opportunities to implement
such actions into our business strategy
・Increased demand for leasing properties focused on environmental
performance

Relevant SDGs

Each employee's effort to further realize an ability and maintainmental health and stable living while fulfilling the fiduciary duty
Human capital development Lack of sufficient skilled human resources may hinder business
required of asset management business and working towards ouras a group of professionals operation, leading to stagnant or lower investor values
goal of maximizing unitholder value and enhancing our presence will
create a positive cycle and improve our performanceContribution to local
communities

・Breakdown of communication with local community at theShow presence by contributing to the safety and security of thetimes of emergency such as disaster may cause reputation risk
region and vitalization of local economy as a member of a corporate・Risk of loss of liveliness due to the image of the invested
group committed to urband development
region becoming obsolete or due to population decrease

Health and well-being of
tenants

Facilities with inferior ESG considerations may have risk oflosing support from tenants

Supplier engagement

Impact on management operation and deteriodated credit in
Cooperate with suppliers to satisfy fiduciary duty required of asset
case of significant violation against sustainable procurement
management business and contribute to becoming the REIT of choicesuch as discrimination, exploitation, destruction of nature,by the investors
contamination and violation of laws by suppliers are recognizedManagement framework
Inappropriate response to multifaceted social demands may
corresponding torisk fail in trust concerning sound and effective management
multifaceted social demandbusiness and affect market development
towards sustainable society

Contract renewal and repeated selection for relocation by tenants
can be expected by creating safe, comfortable and pleasant space fortenants

Enhanced commitment to environment and society will further
promote establishment of the medium- to long-term businessplatform, and improvement in financial value can be expected

SDGs strongly linked to our Materiality
The Materiality that API shares with TRM reflects the magnitude of impact our actions will have on the relevant risks and opportunities.
Our aim is to contribute to the Sustainable Development Goals (SDGs) through our approaches to Materiality. For the details of SDGs, please refer to thewebsite of the Ministry of Foreign Affairs.

10Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

API’s Initiatives
Materiality(E：Environment）

Reducing environmental impact

Policy・Energy use: Medium- to long-term target of 1% average annual reduction in energy use intensity
・Energy-related CO2 emissions: 100% reduction of CO2 emissions generated by electricity by the end of
March 2026, relative to a FY2015 baseline**Excluding co-owned, sectionally owned, and land-only properties that have not installed renewable electricity
as of July 2022.
・Water conservation: Medium- to long-term target of 0.5% average annual reduction in water use intensity
・Waste generation: Medium- to long-term target of 0.5% average annual reduction in waste intensity

KPI【Renewable Energy Procurement】
・Complete transition to renewable electricity in all portfolio properties by the end of March 2026**Excluding co-owned, sectionally owned, and land-only properties that have not installed renewable electricity
as of July 2022.
【Portfolio Greening】
・70% or more green-certified assets by 2030
・Promote green leases for 100% of new contracts【Sustainable Finance】
・100% of new investment corporation bond to be green bonds**On the condition of issuance based on the issuance within current framework
・Consider diversification of sustainable finance methods

Status/Examples

Relevant SDG targets

Materiality(S：Social)・Proactive introduction of environmentally friendly facilities and technologies
・Periodic measurement of environmental performance of the portfolio
・Periodic measurement of environmental performance of each property
・Constant acquisition of environmental certification , etc.
・Promotion of tenant engagement through green leases, etc.
・Periodic and continuous monitoring by Sustainability Promotion Council
・Promotion of environment-friendly procurement through the Green Procurement Standards
7.3
12.5
12.8

By 2030, double the global rate of improvement in energy efficiency
By 2030, substantially reduce waste generation through prevention, reduction,
recycling and reuse
By 2030, ensure that people everywhere have the relevant information and awarenessfor sustainable development and lifestyles in harmony with nature

Human capital development as a group of professionals

PolicyStatus/Examples

・Promote human resource strategy that indicates the requirements of desirable resources and facilitate
development
・Commitment to health and well-being of each employee
・Deployment of measures based on TFHD Group‘s KPIs (work-style reform, promotion of diversity)
・Disclosure of key employee data to present our human resources strategy and status of efforts on employee
health and well-being (ratio of female employees, number of female directors and managers, turnover ratio,stress check participation ratio, etc.)
・Support acquisition of business knowledge, skills, qualifications, and implement various trainings
・Promote career development through periodic performance evaluation/feedback
・Periodic Health Committee
・Introduction of various support systems leveraging on Tokyu Group membership, etc.

11Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Materiality(S: Social)

Governance

Environment

SocialESG Data

Contribution to local communities

PolicyStatus/Examples

・Enhance disaster prevention functions
・Prompt recovery of assets under management following occurrence of a disaster・Educational activities on fire and disaster prevention and disaster response
・Enhanced cooperation with local community
・Publication of capital expenditure/emergency reserves from disaster prevention perspective
・Improvement of seismic performance, Installation of emergency generator, and establishment of BCP・Cooperation for disaster prevention, disaster response and infectious disease prevention
・Sponsorship/participation/cooperation with local events

Health and well-being of tenants
PolicyStatus/Examples

・Improve tenant satisfaction
・Extract issues and make improvements based on tenant satisfaction survey

Supplier Engagement

PolicyStatus/Examples

Relevant SDG
targets

Materiality(G: Governance)

・Aim at smooth property management by utilizing expert know-how of Tokyu Land Corporation, Tokyu
Community, Tokyu Land SC Management, and the support agreement counterparty
Tokyu Fudosan Holdings Group companies
・Share information and actively work on environmentally friendly procurement with PM/BM companies
・Build/promote collaborative structure through periodic monitoring
・Conduct training on environment, etc.
・Promote collaboration with all stakeholders through Green Procurement Standards
11.3

By 2030, enhance inclusive and sustainable urbanization and capacity for participatory,
integrated and sustainable human settlement planning and management in all countries
12.8 By 2030, ensure that people everywhere have the relevant information and awareness forsustainable development and lifestyles in harmony with natureManagement framework corresponding to multifaceted social demand towards sustainable society

Policy・Explicitly describe statement on governance of the investment corporation
・Explicitly describe the investment decision making body, as well as the risk management system forinvestment management
・Establish framework for promoting implementation of the Sustainability Policy

Status/Examples

・Governance of the investment corporation
・Investment decision making body and the risk management system for investment management
・Establishment of Sustainability Promotion Council for the Asset Manager

Relevant SDG
targets

12.8 By 2030, ensure that people everywhere have the relevant information and awarenessfor sustainable development and lifestyles in harmony with nature
16.7 Ensure responsive, inclusive, participatory and representative decision-making at all levels

12Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

TopicsSetting environmental KPIs
API has set up a series of environmental KPIs to translate its environmental policy aligned with its Materiality into concrete initiatives. And in July 2022, targets
related to the KPIs on renewable energy procurement have been concretized: Complete transition to renewable electricity by the end of March 2026 andaccordingly reduce 100% CO2 generated by electricity by the same time, relative a FY2015 baseline.
API will further promote its initiatives to reduce environmental impact.

Jan. 2022

Jul. 2022

Renewable Energy Procurement

Renewable Energy Procurement

・Accelerate procurement of renewable energy

・Complete transition to renewable electricity in all portfolio(Plan to set up the target by July 2022 after cost estimation)

・Reduce CO2 emissions through renewable energy
Portfolio Greening
・70％ or more green-certified assets by 2030
・Promote green leases for 100% of new contracts

properties by the end of March 2026*
・100% reduction of CO2 generated by electricity by theend of March 2026* relative a FY2015 baseline*Excluding co-owned, sectionally owned, and land-only properties thathave not installed renewable electricity as of July 2022.

Sustainable Finance・100% of new issuances of investment corporation bondto be green bonds*
・Consider diversification of sustainable finance methods*On the condition of issuance based on the current framework

Acquisition of ISO14001 certification
API acquired ISO14001, an international standard of Environmental Management System, a system to minimize negative impact of business operations onenvironment using Plan-Do-Check-Action system, for its EMS in real estate investment management and management of properties. (cf. p.41)

13

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data"New Working Style" Project
TRM has constantly worked for optimization of working system and business operation, and in line with
that, a “New Working Style” project was launched in October 2021. The project discusses the gap
between the traditional working style and the impact of COVID-19 and transforming society, and makeproposals to the company management in order to realize a new working style enabling both highproductivity and fulfilled personal life.(cf. p.47)

Supporting international initiatives
TRM supports the basic idea of the PRI (Principle for Responsible Investment) and became signatory of PRI in December 2021.
For details, please refer “External Evaluation/International Initiatives” (p.16).
Also, TRM expressed its support for the recommendations of TCFD (Task Force on Climate-related Financial Disclosures) in January 2022, and prepared theinformation disclosure for API based on the TCFD recommendations along with establishment of an internal rule related to response to climate change.
For details, please refer to “Addressing climate change” (p.27).

Green bond issuance
API aims to further promote its sustainability initiatives through issuance of green bonds and invite new investors to its investment corporation bonds bystimulating their demand who have interest in ESG investment. Since the first issuance in July 2019, API has raised a total of 17.4 billion yen of green bonds.

Additional acquisition by the Sponsor
TLC made an additional acquisition of APIʼs investment units in Spring 2022. Under the volatile market due to the continual COVID-19 pandemic and theuncertainty of global situation, TLC showed anew its supportive stance toward API, which strengthened the principle of same-boat investment.
BeforeAdditional acquisition

After

Outstanding
investment units

822,754 units(Before cancellation of 10,190 own
investment units in May 2022)-

812,564 units(After cancellation of 10,190 own
investment units in May 2022)

Investment units
owned by TLC

81,137 units

8,093 units

89,230 units

TLC ownership

9.9%

-

11.0%

14

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

External Evaluation / Initial Initiatives
External evaluation
GRESB

Other

API was awarded the highest rank “5 stars” for a 4th consecutive year on
GRESB Real Estate Assessment, an overall evaluation of ESG consideration
performance. API ranked top among the listed participants with diversified
assets (office/retail) in Japan, and second among the listed and unlisted
participants with diversified assets (office/retail) in Asia. API also received arecognition of “Green Star” for 8 consecutive years for its advanced
framework and practices. Further, it achieved “A rank” in the GRESB Public
Disclosure for 4 consecutive years.

API was rated “Low Risk” on the Sustainalytics ESG risk assessment in
September 2020 and has earned “BB” rating on the MSCI ESG Ratings as ofJuly 2022.

Green Certification of owned properties
For the green certifications acquired by the properties owned by API,please refer p.39.

Considering the need to address the increasing significance of ESG as an
asset management company in the investment management industry, TRM

became a GRESB Real Estate Company & Fund Manager Member in 2019.
As a member of a global initiative, we will network and share information
with leading companies in the area of ESG and participate in activities such as
introduction of Japanese cases to the world, to improve sustainability.

15

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

International initiatives
UN Global Compact (UNGC) signatory

Principles for Responsible Investment signatory

UN Global Compact is a voluntary effort by corporations and organizations toparticipate in creation of global framework to realize sustainable growth.
Corporations and organizations that joined UNGC continue their efforts torealize the ten principles regarding protection of human rights, elimination of
unfair labor, environmental preservation and prevention of corruption. TFHD
Group has joined the UNGC in December 2016, and as a member of theGroup, TRM supports the ten principles of UNGC. (cf. p.51)

The Principles for Responsible Investment (PRI) refer to the below-listed six
principles proposed in 2006 by then secretary general of the United Nations as
a guide for members of the financial sector, and the international network ofinvestors working toward the fulfillment of the principles. PRI is promoted by
the United Nations Environment Programme Finance Initiative (“UNEP FI”) andthe United Nations Global Compact (“UNGC”).
The PRI, which calls for incorporating considerations for environmental, social,and governance (ESG) issues into investment decision making, is designed to
improve long-term investment performance for beneficiaries and havefiduciaries to fulfill their duties by having ESG perspectives integrated into theprocess of investment decision making.
TRM supports the basic idea of the PRI and became a signatory in December
2021.

Support for TCFD recommendations
Task Force on Climate-related Financial Disclosures, established by the
Financial Stability Board (“FSB”) at the request of G20, to examine how
climate-related information should be disclosed and how financial institutions
should respond. In January 2022, TRM expressed its support for therecommendations of TCFD, and also joined the TCFD Consortium which is agroup of domestic companies that supports TCFD recommendations.

For the information disclosure based on TCFD recommendations, please referp.27.

＜Six Principles for Responsible Investment (PRI)＞
1. We will incorporate ESG issues into investment analysis and decisionmaking processes.
2. We will be active owners and incorporate ESG issues into our ownershippolicies and practices.
3. We will seek appropriate disclosure on ESG issues by the entities in which
we invest.
4. We will promote acceptance and implementation of the Principles within theinvestment industry.
5. We will work together to enhance our effectiveness in implementing thePrinciples.
6. We will each report on our activities and progress towards implementing
the Principles.

16

GovernanceOur view on Governance
Under a belief that it is essential for our operation to implement a sincere andfairly compliance management, API and TRM thrive to build an effective
decision-making process and a strong corporate governance structure toprevent negative occasions, such as conflict of interests cases that would
damage the benefits of all our stakeholders including unitholders. This is derived
from a recognition that we are conducting an important and responsible
operation of managing assets which belong to the unitholders.
Taking our societal responsibility and public missions into consideration, we willcontinue to make best effort to meet expectations and reliance from ourstakeholders including unitholders, customers, business partners, and our local
communities by contributing economical and societal development through ahealthy business operation.

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Corporate governance structure to maximize our unitholder value
While leveraging the value-chain of TFHD Group, API and TRM are working to improve and enhance the governance system contributing to maximize
unitholder value, including approaches such as measures against conflict of interests with related parties, alignment of interests of unitholders and theSponsor, and amendment to the AM fee structure with DPU-linked fee.

Alignment of interests of API’s unitholders and TLC
Ownership by the Sponsor
In the Sponsor Support Agreement, TLC has made it clear that when API decides to issue additional units, a subscription of a part of such issuance shall besincerely considered.
In Spring 2022, TLC made additional acquisition of APIʼs investment units (cf. p.14). Further support from the Sponsor is expected with reinforced alignmentof interests.

Co-ownership of properties with the Sponsor
API holds co-ownership of interests with the Sponsor in the five commercial properties namely Tokyu Plaza Omotesando Harajuku, DECKS Tokyo Beach, Q
plaza HARAJUKU, and Tokyu Plaza Ginza (Land). We consider that this alignment of interests between the Sponsor and APIʼs unitholders, deriving fromoperating revenues of the owned assets including above, should lead to a better property management practice.
<Properties in co-ownership with Sponsor>

18

Sustainability
Policy/Structure for
Promotion

Introduction

External Evaluation/
International
Initiatives

TopicsAcquisition process securing fairness to protect unitholder
value
To realize an effective and transparent management, TRM has an effective
decision-making process based on internal regulations including themanagement guideline and rules on related-party transaction.
For instance, asset acquisition from related parties requires deliberation andresolution of Compliance Committee, which includes external experts and an
approval by the Board of Directors of API. At board meeting of API, more
stringent rules are applied and conducted.

Governance

Environment

SocialESG Data

Asset management fee structure including DPU-linked fee
Pursuant to the asset management agreement, API pays an asset
management fee including DPU-based portion to TRM. This structure isdesigned to incentivize TRM to enhance APIʼs unitholder value.
Ratio of performance-based fee (type II) was increased from the fiscal period
ended May 2020, which would contribute to strengthen incentive tomaximization of unitholder value.

<AM fee structure of API>

<Acquisition approval process>

Report to the Board of Directorsof TRM

Prior approval by Board of Directors ofAPI*This approval may made before or after
Investment Committee resolution*If acquisition is deemed to
be a related-party transaction

Reportto API

Approval by each relevant Chief Division Officer

Deliberation and resolutionof Investment Committee*Compliance Officer may order suspension of deliberations

Deliberation and resolution ofCompliance Committee*If acquisition is deemed to
be a related-party transaction

Approval by Compliance Officer

Proposal by responsible department

19

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

API’s Corporate GovernancePursuant to the Act on Investment Trusts and Investment Corporations of Japan (“ITA”), API entrusts its asset management operations to TRM.

API’s governance structureAPIʼs organization comprises a unitholdersʼ meeting, a board of directors currently comprised of one executive director and two supervisory directors, and an
independent auditor. API has no employees as ITA prohibits REITs to make employment contracts.

<APIʼs governance structure>

Unitholders’ Meeting
Matters and issues on API, that are originally stipulated at ITA and other relevant laws & regulations, are to be resolved at a unitholdersʼ meeting.

Executive Director and Supervisory Directors
The executive director represents API and is responsible for the administration of affaires of API. The supervisory directors have a statutory duty to review theexecutive directorʼs administration of API.

Term of office / brief biographies of directors
The term of office for directors is two years. Please refer to APIʼs website for the brief biographies of directors.

Eligibility requirements
Candidate for directors must not fall under any disqualification clause as defined in the ITA. Such candidates shall be examined and appointed at aunitholdersʼ meeting.

Compensation
The articles of incorporation of API stipulate that it may pay the executive director up to ¥700,000 per month and each of our supervisory directors up to¥500,000 per month, and the board of directors of API is responsible for determining the amount for each director.

20

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data<Concurrent positions and compensation of directors>
Excerpt from the semi-annual report for the fiscal period ended November 2021
Position
Executive
director

Name

Concurrent positions

Nobuhide Kashiwagi

Managing Director, Chief Division Officerof Activia Management Division, TLC
REIT Management Inc.

Yonosuke Yamada

Managing Partner of Yamada, Goya andSuzuki law offices

Supervisory
directors

Compensation received(\ thousand / fiscal period)-

3,300
Yoshinori Ariga

Ariga Yoshinori Accounting Office

Board of Directors
At the meeting of the board of directors, the executive director reports on the performance of its duties and the supervisory directors supervise to ensure that
API operates the asset management in compliance with legal and regulatory requirements. The meeting frequency of the board should be at least once in threemonths as stipulated under internal regulations of TRM. However, it is held every month with a 95.6% attendance of directors from April 2021 to March 2022.

Independent Auditors
The independent auditor shall audit the financial statements of API and report to the supervisory directors any improper activity of the executive director. The
term of office of the independent auditor comes to an end at the first unitholdersʼ meeting held after the first financial period closed after one year or more fromthe appointment date. The auditor shall be reappointed except as otherwise resolved in a unitholdersʼ meeting.

<Auditor fee>
Excerpt from the semi-annual report for the fiscal period ended November 2021
Position

Name

Independent
auditorErnst & Young ShinNihon LLC

Compensation(\ thousand / period)
35,671(Note) Includesfees for preparing comfort letters related to the issuance of new
investment units in September 2021 and new investment corporation bonds inNovember 2021 .

21

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

TRM’s Corporate Governance
TRM works to enhance corporate governance to exercise a fiduciary duty and a duty of loyalty to API as stipulated in the asset management agreement.

TRM management organization
Under the management organization shown below, TRM exercises its asset management operation, and the Activia Management Division undertakes the
management of assets of API. TRM has established the Investment Committee and the Compliance Committee to deliberate matters related to asset management
and compliance, and the Acquisition Priority Review Meeting to determine the order of priority for consideration.
In April 2021, TRM established the rules on the Sustainability Promotion System to strengthen the system and expand the functionality of measures. Following this,the Sustainability Promotion Council obtained a more accurate position in the organization. The Sustainability Department succeeds the ESG-related missions fromthe Environmental Engineering Department, and we will further promote our sustainability program.
＜TRM management organization＞

ESG-related performance targets of officers
and employees
Officers and employees of TRM are required to set
performance targets which include ESG-related targets.
The process they took to achieve outcome and theirperformances in operations including ESG-related aspects areassessed as same as others, and the assessment results ofpersonal performances are linked to the treatment they will
receive such as grade, position and salary in the following year.

22

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Compliance
Compliance Policy
Compliance is ensured in the business operation of TRM with the Compliance Committee and the Compliance Department established with objective tocarry out our business in compliance pursuant to the TFHD Groupʼs Code of Conduct. The framework is reinforced by the Rules on the Compliance and theCompliance Manual.
Key points of TCFD Group’s Code of Conduct
1. Ensure compliance with laws and regulations applicable to our business activities.
2. As TCFD Group employee, treat our customers sincerely to maintain their trust.
3. Generate a corporate culture that enables open-minded communication on difficult issues involving work.
4. Enhance solidarity of TCFD Group and promote mutual understanding with stakeholders.
5. Enforce proper management of information.
6. All employees will understand and focus on ethical conducts and be sensible professionals.
7. Make efforts to create safe workplace and be considerate of the environmental conservation.

Compliance Committee
To perform a compliance reinforced management, TRM holds the Compliance Committee comprised of members including one or more external experts(licensed expert such as attorney) on a regular basis. The committee shall resolve the following matters.
The Committee shall resolve the following matters.
1. Establishment and amendment of basic investment policy concerning asset management by each REIT
2. Determination and change in acquisition or disposal of assets by each REIT and the terms and conditions
thereof3. Establishment and amendment of asset management plan by each REIT
4. Establishment and amendment of basic policy concerning asset management by each REIT
5. Establishment and amendment of basic policy concerning funding, capital policy and dividend policy foreach REIT
6. Matters related to transactions with related parties (provided, however, excluding transactions defined as
not requiring prior approval by the Compliance Committee)
7. Preparation and amendment of the Compliance Manual and Compliance Program
8. Deliberation and resolution on improvement measures concerning inappropriate acts in terms ofregulatory compliance and preventative measures, etc.
9. Any and all matters that the Compliance Officer decided that a discussion at the Compliance Committee
should be required*With respect to 1 to 5, agenda shall be restricted to transactions with related parties and mattersdeemed necessary to be resolved by the Compliance Officer

23

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Measures to prevent corruption, bribery and malpracticeTRM shares the THFD Groupʼs anti-corruption policy, and in the belief that corruption creates significant obstacles against sustainable development andcorrodes the social structure, recognizes that commitment to prevention of corruption is an important issue for the society and is making the best effort toprevent any unfair practice in the operation. The rules of employment and rules on the compliance stipulate that we shall not conduct those acts, andperiodical trainings are implemented to the employees. The effort includes also that compliance verification by supervisors while keeping evidence to make a
judgment of compliance is required at a business transaction. Harsh punishment shall be imposed to on the employee who conducted those acts.
TFHD Group is a signatory to the United Nations Global Compact (UNGC), and as a member of the Group, TRM supports the ten principles of UNGC. (cf. p.51)
TFHD Group’s Anti-Corruption Policy
TFHD Group recognizes that corruption and bribery are serious risks that could considerably damage the trust and credibilityof a company. We are committed to maintaining sound relationships with stakeholders and will never engage in businessentertainment or gift-giving that elicits suspicion or mistrust from society. Specifically, we will thoroughly implement thefollowing.
(1) We will never engage or be complicit in any and all forms of bribery, including money laundering, embezzlement, or
obstruction of justice, etc.
(2) In fully understanding laws and regulations about relationships with public offices and other similar
persons in Japan or other countries, we will never engage in business entertainment or gift-giving thatelicits suspicion or mistrust from society and we will never provide monetary or other benefits to gain illicit profits.
(3) We will not provide or receive business entertainment or gifts from business partners or other parties that deviates fromsound business practices or social norms.
We will not use our position or authority to demand personal benefits from our business partners or other parties.
In addition, a code of conduct is stipulated in the code of ethics for executive officers approved by the Board of Directors
Meeting to counteract all corruption activities including bribery.

Whistleblower system
TRM established the Compliance Helpline Counter as a contact point to report and consult on compliance matters including when harassment and bullying
is experienced or observed, enabling all officers and employees to directly report to the Compliance Officer of TRM, General Manager of Legal Affairs
Department of TLC, General Manager of Group Legal Affairs Department of TFHD, or external attorneys. Also, a system is already in place to structurally
protect the whistleblowers when such reports were conducted.

Measures taken to enhance compliance awareness
Divisional compliance staff
Each year divisional compliance staff are appointed from each division of TRM to perform periodic monitoring on compliance matters. The officers reportcompliance status in his/her division and share related information.

Corporate ethics / compliance training
In order to ensure compliance and increase awareness of officers and employees to compliance, we provide compliance training two times each year to allof them focusing on the enforcement of the compliance basic policy and standards,
FY2018FY2019FY2020
FY2021and learning applicable laws and regulations, etc. An orientation and follow-up
Awareness ofcourses (for employees new to the financial instruments business, after six
Compliance
90%
87%
90%
88%
months have passed since hiring) are held as well.
Helpline Counter24

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Risk Management
Basic Policy on Risk Management
TRM established a basic policy on the strategic targets, as well as risk management rules to implement appropriate management of risks.

Basic Policy on Risk Management
1.
2.
3.
4.
5.
6.

Based on the above, and in accordance with our management principles, we aim to secure long-term stable revenue and maximize unitholder value by establishinga management system in accordance with these Rules and implementing appropriate risk management against various risks involved with engaging in investment
management business.
Officers and employees, etc., shall recognize the importance of risk management, be aware the fact that each is responsible for risk management, understandthese Rules and internal rules, etc., and strictly comply with the same.
Necessary and appropriated rules, detailed ruled and standards about risk management shall be established.
Actual risk management shall be conducted through organizational and human resources oriented countermeasures so that such responsibility of relevant risk
management would be clarified.
Necessary and appropriate management and supervision shall be implemented for business outsourcing partners as well as to officers and employees, etc.
Risk management training, etc., shall be conducted to promote thorough awareness by officers and employees, etc., and to maintain/improve effectiveness of the
Basic Policy.
Basic Policy stated in this Article shall be reviewed periodically as necessary. A change in our strategic targets would be a good example for such timing.

Risk management framework
TRM conducts sophistication of its risk management framework with a certain support from external experts. Risk management function falls under the
responsibility of the Compliance Department supervised by the Compliance Officer. The Compliance Department is a stand-alone department, independent
from business operating divisions. It performs a series of risk assessment including operational risk, etc.

Information security
In order to enhance security of information assets and appropriate use of them, TRM has set forth basic rules on information security management which
stipulates principal matters related to information protection with clarifying the responsibility for information management. TRM has also established therules on IT management to stipulate appropriate management of information asset by each officer and employee according to the level of their roles andresponsibilities.

Risk management training
TRM provides periodical risk management educational session with all officers and employees by external lecturers and works to improve risk management
ability of members of each department.

Business continuity planning
To strengthen its resilience, TRM set a business continuity plan, related rules and manuals, and make updates when necessary, in preparation for
unexpected crisis such as disaster and social disruption. In accordance with these rules, we work to prevent and mitigate impact from crisis including recent
natural disasters and COVID-19. We also pay close attention to the materials and equipment used in the properties of API and make every effort to prevent
incident by staying well informed of defect products and carrying out research.

25

Environment
Our view on Environment
API considers climate change as a significant risk and identified reducing
environmental impact as part of its Materiality. Our medium- to long-termtargets are 1.0% average annual reduction in energy use intensity, and 0.5%
annual average reduction in water use intensity and waste intensity. And in July
2022, we set a new target of CO2 emissions: 100% reduction of CO2 generated
from electricity. We believe that effort to reduce environmental impact tomitigate climate-change related risk such as abnormal climatic conditions andsea-level rise would lead to maximization of our unitholder value. Therefore, we
continue to fulfill our mission to reduce environmental impact and provide highenergy-saving performance in the owned properties.
API and TRM consider that contribution to the local communities as well asurban revitalization, with environmental consideration, through management ofour properties is one of our important missions. With regard to investment in
undeveloped site (greenfield), we recognize that act of development will havean impact on the natural environment and ecosystem, and we will continue tomake investment in light of such recognition.

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Addressing Climate Change
1. How we look at and address climate change(1) Our perception of and basic approach to climate change
We are well aware that climate change is a critical issue that has a great impact on our business activities.
The Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC), published in 2021, firmly concludes that humans have warmed theatmosphere, ocean, and land. The report attributes increases in greenhouse gas (GHG) concentrations including carbon dioxide since around 1750 to humanactivities such as heavy consumption of fossil fuels. At the 26th United Nations Climate Change conference (COP26) also held in 2021, participating countries
formally agreed that they will pursue efforts to limit temperature increase to 1.5℃. This agreement came amid growing awareness that limiting the increase in
the global temperature to 2℃ above levels in the Industrial Revolution, the maximum allowable level under the Paris Agreement of 2015, will not preclude
tremendous negative impacts. Given the global temperature has already risen by more than 1℃, however, we believe that achieving this target requires bold
actions, including social and structural changes.
We need to adapt to emerging waves of change generated by these increasing impacts of climate change, more solid global frameworks for climate change, andtransition to a decarbonized society. We also need to secure both stable earnings and steady growth in assets under management over a medium to long term.
To these ends, it is important for us to predict risks and opportunities that climate change may present to our business, to work with our investors and otherstakeholders, and to reflect such risks and opportunities in our investment strategies and property management.
TRM, the asset manager to which API entrusts the management of its assets, is mindful of the need for environmental and social considerations and strong
governance. And, as a member of the TFHD Group, TRM shares the Groupʼs Sustainability Vision.
TRM believes that addressing these needs constitutes part of its social responsibilities and is also an avenue to practice its management philosophy. It also believes
that doing so will contribute to development of a sustainable society. To put this belief into practice, TRM has identified material issues under its Sustainability
Policy and shares them with API. For more information on the Sustainability Policy and the material issues, please refer to TRMʼs Sustainability Initiatives.
The escalation of climate change has a huge impact on our efforts toward “reducing environmental impact,” one of our material issues. For this reason, we
demonstrate to our suppliers our commitment to environmentally preferable purchasing with our Green Procurement Standards, established in September 2020.
We join hands with our suppliers in taking action based on mutual understanding.
To redouble its efforts to address these issues, TRM has signed on to the Principles for Responsible Investment (PRI), joined GRESB as a member, and embraced
the UN Global Compact (UNGC) in conducting business activities.

27

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data(2) Support for the TCFD Recommendations
TCFD stands for “Task Force on Climate-related Financial Disclosures,” a unit established by the Financial Stability Board (FSB) at the request of the G20. With therecognition that climate change poses a serious risk to the global economy, the TCFD is tasked with examining how climate-related information should be
disclosed as well as what action should be taken on the part of financial institutions.
In January 2022, TRM announced its support for the TCFD Recommendations. Also, TRM became a member of the TCFD Consortium, an association of Japanesebusinesses that endorse the recommendations.

2. Organizational governance for addressing climate change(1) Our structure to promote sustainability

For information on the implementation setup at TRM (including responses to climate change; hereinafter the same), please refer to Our Structure to Promote
Sustainability.
(2) Sustainability Promotion Council
As part of its efforts to address sustainability issues, TRM convenes the Sustainability Promotion Council regularly to share sustainability-related information(including responses to climate change) and discuss measures to take on these challenges and implement them. The Council also monitors progress in oursustainability efforts regularly and continuously. For more information about the Council, please refer to “Sustainability Promotion Council” under “Our Structure

to Promote Sustainability.”(3) Our ISO 14001-certified environment management system
API and TRM have in place a unique environment management system (EMS) that builds on a PDCA cycle to reduce environmental impacts of their business,
including the management of properties owned by API. By taking advantage of this EMS, we have been making efforts to build up a framework to manage andpromote sustainability initiatives. These efforts, which involved holding regular divisional meetings and reporting to management, and as needed, to the
Sustainability Promotion Council, eventually paid off. In April 2022, this particular EMS was certified to have met the international standard in two categories ofservice: real estate investment management and proprietary property management. For information on how API uses the EMS in asset management, pleaserefer to “Environment Management System” under “Initiatives to Reduce Environmental Impact”.

28

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data(4) Climate Action Standards
For matters related to addressing climate change, TRM has in place a set of climate action standards, under which it has built its structure to promotesustainability and established an action policy that builds on the TCFD framework. For information on the management of risks and opportunities related toclimate change, see “4. Managing Risks and Opportunities Related to Climate Change.”(5) Reporting on performance
Meeting entity

Convening entity

Meeting frequency

ESG meeting at Activia Management Division

TRM

Three times or more a year

Sustainability Promotion Council

TRM

Four times a year

TRM’s Board of Directors meeting

TRM

Once a year (reporting)

API’s Board of Directors meetingAPI

As needed (reporting)

3. Strategy that factors in risks and opportunities related to climate change(1) Scenario analysis assumptions
Climate change risks can be largely divided into transition risks and physical risks. API has analyzed three scenarios: 1.5℃, 2℃, and 4℃ scenarios, using futureclimate predictions announced by two international organizations*.
These scenario analyses have used two timeframes during which we will continue to be affected: mid-term (2030) and long-term (2050).
* International Energy Agency (IEA), World Energy Outlook 2021
UN Intergovernmental Panel on Climate Change (IPCC), The Fifth Assessment Report (AR5)29Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Global outlook under 4℃ scenario
In this scenario, GHG emissions remain high due to a lack of progress in decarbonization action, resulting in more frequent natural disasters. Actions need to betaken to address physical risks rather transition risks, which are outweighed by the former.

Global outlook under 2℃ and 1.5℃ scenario
In these scenarios, GHG emissions are curbed thanks to various environmental regulations, and there are more ZEBs. Actions need to be taken to addresstransition risks rather than physical risks.

30

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data(2) Analytical procedure
The analysis of the 4℃ scenario, which assumes a world in which physical risks need to be addressed more than transition risks, has involved identifying andanalyzing long-term (2050) risks, which outweigh mid-term (2030) risks. The analysis of the 2℃ and 1.5℃ scenarios, which assumes a world in which transition
risks need to be addressed more than physical risks, has involved identifying and analyzing both mid-term (2030) and long-term (2050) risks and opportunities foreach scenario. In both analyses, financial impacts have been analyzed and assessed both quantitatively and qualitatively.
The analyses, both qualitative and quantitative in nature, have been conducted in light of the status of API's asset holdings, with reference made to currently
available scenarios as published by the IEA and the IPCC and to objective projections published by other third-party specialized institutions. The impact
assessments thus made assume some risk factors and their uncertainties; therefore, they do not guarantee their accuracy or safety that they may suggest.

Financial Impact
Risk
Category

Type

Item

Description of
Risks and Opportunities

Category

4℃
2050

Technology

1.5℃

2030

2050

2030

2050

Minor

Moderate

Minor

Moderate

Minor

Minor

Minor

Minor

Minor

Major

Minor

Major

Minor

Minor

Minor

Minor

Minor

Minor

Minor

Minor

Increased costs arising from
Risk
introduction of new technologies

Minor

Major

Minor

Major

Higher efficiency due to shift toproperties with higher eco
performance

Minor

Minor

Minor

Minor

Cost arising from carbon tax levy Risk
Increased pricing of GHG
emissions
Higher efficiency due to shift toproperties with higher eco
Opportunity
performance
Increased construction costs
arising from compliance with
Policies, Laws
Risk
ZEB-related and other&移Regulations
environmental regulations
行
Increased verification costs
Mandates on andTransition リ
arising from compliance withregulation of existing
Risk
Risks
ス
ZEB-related and otherproducts and services
ク
environmental regulations
Higher efficiency due to shift toproperties with higher eco
Opportunity
performance
Substitution of existingproducts and services
with lower emissions
options

2℃

Opportunity

31

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Financial Impact
Risk
Category

Type

Item

Description of
Risks and Opportunities

Category

4℃
2050

Changing customer
behavior
MarketTransition
Risks

Shift to high-efficiency
properties
移行
リスReputation
ク

Acute

Increased stakeholder
concern or negative
stakeholder feedback
Changing customer
behavior

Increased severity of
extreme weather events

PhysicalRisks
物
理 Chronic
リス
ク

Rising mean
temperatures and sea
levelsHigher vacancy of properties
with lower environmental
Risk
performance
Lower demand due to little shift
to properties with higher fireRisk
resistance
Securing competitive edge byshifting to properties with higher Opportunity
environmental performance
Divestment or poor access tocapital markets

Risk

Lower demand due to little shift
to properties with higher fireRisk
resistance
Costs incurred from the need toaddress torrential rain disasters, Risk
etc.

2℃

1.5℃

2030

2050

2030

2050

Minor

Minor

Minor

Minor

Minor

Minor

Minor

Minor

Major

Major

Major

Major

Minor

Minor

Minor

Minor

Minor

Minor

Minor

Minor

Moderate

Loss of sales opportunities due toRisktorrential rain disasters, etc.

Minor

Increased costs of air
conditioning due to risingtemperatures

Risk

Minor

Inundation due to sea level rise

Risk

Minor

(Note) Risks are represented in orange and opportunities in blue. The scale of the financial impact (minor, moderate, major) is expressed by the depth of color: the deeper
the color is, the larger the impact is.

32

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data(3) Analysis findings
Both the 2℃ and 1.5℃ scenarios entail substantial transition risks. In these two scenarios, the introduction of a high carbon tax designed to curb CO2
emissions in Japan is likely to mean higher operational costs stemming from, for example, a heavier tax burden on CO2 emissions from proprietaryproperties. Stricter environmental regulations with regard to ZEBs, energy saving standards, and the like are likely to translate into additional costs ofrefurbishments needed to comply with them.
Tighter regulations will have a tremendous impact on tenantsʼ choice of properties. It is expected that in comparing properties of different real estateagencies, demand for properties with lower energy efficiency will decline.
With an eye on a transition to a decarbonized society under the scenarios of 2℃ or lower, API is committed to addressing these risks and maintaining its
competitive edge. To these ends, API will take a number of actions. These include deploying renewables, switching over to LED lighting in a systematicmanner, and retrofitting its properties with more energy efficient equipment. To make its portfolio greener, API will also increase the proportions ofenvironmentally certified properties and green lease agreements with new tenants.
Under the 4℃ scenario in which little progress will be made in decarbonization, API expects damage to its proprietary properties due to increased severityof extreme weather events and resultant increases in repair expenses. It is worth noting here that API' buildings are originally disaster-resistant and that
API's investment focuses on properties in areas resistant to inundation and other risks. With regard to chronic changes such as rising mean temperatures,
API is committed to reducing CO2 emissions by, for example, deploying renewables and considering and replacing existing key equipment such as electricand air conditioning equipment with more energy-efficient equipment wherever possible when it reaches its end of life.

4. Managing risks and opportunities related to climate change
Matters related to material issues regarding climate-related risks and opportunities and adaptation and resilience to climate change are regarded by TRM
as matters related to climate action in accordance with its climate action standards. They also constitute specific sustainability initiatives and are therefore
part of the matters related to promoting sustainability.
In January 2022, we announced our support for the TCFD Recommendations, which prompted us to conduct scenario analyses described above. The
analyses were aimed at identifying risks and opportunities arising from the impact climate change may have on API, assessing the impacts of these risks
and opportunities on our business, and making changes to our future strategies as needed. Risks of particular importance were singled out in light of how
likely they emerge, when they emerge if ever, and how they may impact our finances.
Based on the analysis findings, we will improve on our initiatives. To this end, we will execute function management with the help of the EMS andmonitor API's actions and their progress through the Sustainability Promotion Council.

5. Setting metrics and targets related to climate change(1) Metrics and Targets
API has identified its metrics and targets related to climate change under the category of “reducing environmental impact,” one of the material issues it shareswith TRM. For the purposes of identification, API assessed risks and opportunities presented by the impacts of climate change as well as the importance ofspecific actions aimed at addressing these impacts.

33

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

API has also set out a policy for reducing environmental impact. The policy covers four key areas: energy use, energy-related CO2 emissions, water
conservation, and waste generation. To translate the policy into specific actions, API has set new key performance indicators (KPIs) for climate action in two
categories: renewable energy procurement and portfolio greening, as shown below:

Renewable energy procurement
・Complete transition to renewable electricity in all portfolio properties by the end of March 2026*
・100% reduction of CO2 generated by electricity by the end of March 2026**Excluding co-owned, sectionally owned, and land-only properties that have not installed renewable electricity as of July 2022.

Portfolio greening
・70％ or more green-certified assets by 2030
・Promote green leases for 100% of new contracts-

Green certified assets refer to the properties certified to the Certification for CASBEE for Real Estate, BELS Certification, Tokyo Low-Carbon Small andMedium-Sized Model Building Certification, and DBJ Green Building Certification.
- The figure is calculated based on the floor area of our properties excluding land with limited proprietary rights.
- API concludes green lease agreements with tenants in light of the need for energy efficiency and environmental considerations, thus sharing with them its
ideals for improving and maintaining building-wide comfort and productivity.

(2) Progress toward Targets as Well as Practices
API regularly discloses information on Environmental Performance with regard to energy consumption, CO2 emissions, water consumption, and waste
generation; Environmental Certifications; and Environmental Impact Reducing Works. It also provides relevant information on the annual Sustainability Report
and Financial Statements as part of ESG-related information.

34

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Consideration in Real Estate
Investment

Renewable Energy Procurement

Environmental risk assessment in acquisitions

In the fiscal period ended May 2022, API has started with four properties
the 100% procurement of renewable electricity. Three of them are using
the electricity from TFHD Groupʼs generation.
It also determined to complete transition to 100% renewable electricity to
be used in the properties by March 2026.

When API is acquiring a new property, TRM conducts due diligence using
third party experts to assess environmental risks regarding toxic
substances (usage/storage of asbestos, PCB, CFC, other chemical
substances, soil contamination, etc.) before investment decisions.

*Excluding co-owned, sectionally owned, and land-only properties that have not installed
renewable electricity as of July 2022.

Sponsor’s initiatives
TLC started renewable energy business such as solar and wind power
generation in 2014. In 2019, it became member of RE100* as a firstJapanese real estate developer. To achieve RE100, it advanced the initial
target year to complete 100% transition of 2025 to 2022 and accelerates
the initiatives toward climate change.
*RE100 is a global initiative bringing together the worldʼs most influential businesses
committed to 100% renewable electricity.

Number of
projects

Rated
capacity

Equivalent to power
consumed by approx.

82

1,325MWc. 630k households（As of May31, 2022）

Wind energy plant in
Hokkaido

Photovoltaic power
plant in Chiba

35

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Measures Taken in Owned
Properties
In the one of APIʼs flagship properties, various environmental efforts aretaken including CO2 emission reductions through wind-power generation,conservation of water resources as well as resource saving by using
recycling materials.

Reducing CO2 emissions

・ Use of natural energy through wind-power generationand top light
・ Energy-saving equipment (LED lighting, motion sensors,
outdoor sprinklers)・ Mitigation of the heat-island effect through rooftop garden

2Conservation of Biodiversity

・Attracting living creatures (watering place forbirds and birdhouses)
・Contributing to an ecological network nearby

3

Environment

SocialESG Data

Consideration to Urban Greening andBiodiversity

Tokyu Plaza Omotesando Harajuku

1

GovernanceRooftopgardenIn management of APIʼs owned properties, we respect biodiversity throughefforts toward conservation of and improvement in ecosystem in urban
greening and natural area in the premises or neighborhood.
API does not invest in new development project, though carefully considers
biodiversity and efforts include acquisition of ABINC certification related
biodiversity.

On the rooftop named the “Forest of Omohara”, a nature-friendly environment
with water mountain for birds has been created. A large-sized rooftop garden
with tall trees, such as zelkova and Katsura trees, in the center of
Omotesando and Harajuku areas, is registered as a “Birdpia” (a word coinedby combining bird and utopia) by the Japanese Society for Preservation ofBirds. As part of a “green network” consisting of Meiji Jingu shrine and zelkova
trees near the property, the Forest of Omohara links the urban area with anatural environment that is home to many birds and other living creatures.
<Features of Forest of Omohara>

Meiji Jingu
Meiji Jingu Shrine
Zelkova trees
ShrineZelkova trees

Conservation of Water Resources

・ Water-saving equipment (water-saving toilets,
water-saving faucets)

4

More than 30 medium-tall and tall trees are planted,
including zelkova and Katsura trees, which are also
growing along the Omotesando street nearby.

Resource Saving

・ Use of recycled materials (wood decks made ofrecycled wood, carpets made of recycled materials)

5

Attention to Health・ Reducing harmful substances (using building materials
emitting less VOCs)
・ Rooftop gardening for psychological healing and thecleanup of air (absorbing dust)
For more measures taken in each property, please refer APIʼs website.

The Forest of Omohara is a resting place where anyone can relax,
enjoying the changing seasons.

There are six birdhouses in the forest, of which
two were hand-created by pupils of anelementary school nearby.

36

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Resource recycling programs

Environmental impact reducing works

In Tokyu Plaza Omotesando Harajuku, we collect and compost raw garbage
generated in the restaurants in the properties. Manure is utilized to growstrawberries in the rooftop garden. Visitors can enjoy menus prepared withthe strawberries.

In accordance with the medium- to long-term asset management plan, inevery fiscal period, API undergoes engineering works to reduce
environmental impacts such as installation of LED lightings and energysaving air-conditioners. Not only common areas, but tenant spaces also getrenovated occasionally in the event of the tenant replacements.

We participate also in a project “Pool Project Tokyo” which collects andrecycle plastic materials in retail facilities in Tokyo and verifies recycle systemfor packaging waste from clothing and apparel shops.

<Examples of engineering works to reduce environmental impact>

Commercial Mall Hakata
New air conditioners introduced in common areas
and backyard are conform to the PremiumStandard of the Ministry of the Environment and
37% CO2 emissions were reduced.

DECKS Tokyo Beach
The property cooperated in “Make Tokyo ODAIBA Beach Swimmable,
Restart! ORAOBA PLAGE 2022” hosted by the Minato ward office.
There initiatives were introduced
including underwater screens andwater-quality forecasting system forthe beach in Odaiba prior to the sea
bathing event “ODAIBA PLAGE” to beresumed in the summer of 2022.

A-FLAG SHIBUYA
New elevators capable tocontrol speed depending on thenumber of users reduced 20%
electricity consumption due toinverter controlled by
microcontroller.

37

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Environmental Performance
FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

86,660102,039

104,804

112,120

116,744

48,774(107,339)

34,943(101,800)

0.23

0.25

0.22

0.22

0.21

0.29
(0.20)

0.21(0.19)

0.05

0.03

0.03

0.04

0.02

0.14

0.1

Actual (total)(t-CO2)

34,19737,28540,91046,172

45,347

40,68342,274

Scope 1
(direct emission)

-

-

-

-

-

1,465

2,612

Scope 2(indirect emission)

-

-

-

-

-

18,037

13,464

Scope 3(emission from tenants)

-

-

-

-

-

21,181

26,198Intensity (total/Scope 1&2)
(t-CO2/㎡)

0.093

0.090

0.087

0.089

0.083

0.116
(0.07)

0.091(0.08)

Actual(㎡)

526,515533,757

591,392

675,847

701,847

443,885

414,775

1.42

1.29

1.25

1.30

1.29

0.82

0.75

-

3,492

6,667

18,99230,76815,54913,292

2,824

3,209

3,665

4,262

4,367

2,899

2,558

-

-

-

-

-

ActualEnergy consumption
per year(MWh)Intensity(Note 2)

(MWh/㎡)

Renewable energy generation per year
(MWh)

CO2 emissions per
year(Note 3)

Water consumption
per year

Intensity(㎡/㎡)
Recycled water (Grey water and Drainage)(㎡)
Waste generation per year (t)(Note 4)

Third-party assurance statement(Note 1) Principally the figures shown above are the cumulative amounts of the entire portfolio (excluding those in which API owns only land) during each fiscal year.
(Number of properties: FY2015：30, FY2016：37, FY2017：40, FY2018：42, FY2019：43, FY2020 : 41, FY2021：45)(Note 2) The figures shown are total amount of consumption fuel (gas, heavy oil, etc.), electricity and district heating / cooling of the properties.
From FY2020, the actual amounts cover the area of the properties for which API has operational control of energy consumption. Figures in parentheses include emissions by tenants, same as the previous fiscal years.
(Note 3) The factor and the method applied to the calculation are in accordance with "GHG Emissions Accounting, Reporting and Disclosure System" of the Ministry of the Environment. Figures reported as Scope 3 fall under category 13 and are limited
to the data
which was able to be collected from tenants.
Figures for intensity from FY2015 to FY2019 as well as those in parenthesis from FY2020 are calculated based on the total area of the properties with reference to the occupancy. Figures from FY2020 are total of the intensity for Scope 1 and(Note 4) Excludes waste directly generated by tenants. Figure for FY2016 excludes properties of which data were not available (Figure represents 91.5% of the entire portfolio).

38

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

Green Certifications

SocialESG Data

Green-certified assets

API works to improve the ratio of the green-certified properties in belief that an environmental-friendly portfolio will lead toenhancement of unitholder value in the medium to long term.

65%<Overview of green certifications>29
properties

CASBEECASBEE (Comprehensive Assessment System for Built Environmental Efficiency)
is an evaluation system that ranks buildings and structures in terms of theirenvironmental performance. In addition to each building's ability to reduce its
environmental impact across a variety of areas including energy and resource
conservation as well as recycling, this system comprehensively evaluates theenvironmental performance of each building and structure including its aesthetic
appeal. The evaluation result is represented in 5 ranks (from one "★" to fivestars "★★★★★").

(GFA basis, as of May 31, 2022)

DBJ Green Building
Shiodome Building

CASBEE★★★★★

BELS
Tokyo Low-Carbon Small and Medium-Sized Model Building

BELS assessment is provided under a public evaluation system, which evaluates
the energy conservation performance of houses and buildings, established in
April 2014 by the Ministry of Land, Infrastructure, Transport and Tourism. Third
parties evaluate the performance of buildings based on the primary energy
consumption defined in energy saving act, regardless of whether a building is
new or not, and the evaluation result is represented by a number of stars (fromone "★" to five stars "★★★★★").

Tokyo Low-Carbon Small and Medium-sized Model Building
Tokyo Low-Carbon Small and Medium-Sized Model Building is a building ranked
A1 or higher level by the Tokyo Metropolitan Government, evaluating CO2
emission intensity with the self-assessment indicator (CO2 emission benchmark)established by the government in 2012 with an aim to promote a real estatemarket in which low-carbon buildings with fewer emissions of CO2 have higher
value.

DBJ Green Building
DBJ Green Building Certification, offered by Development Bank of Japan Inc.
(DBJ), is a comprehensive evaluation system which includes not only anenvironmental perspective but also a social one (owner response to social needsof the diverse stakeholders of the properties), DBJ identifies and certifies "Green
Buildings", which are essential in today's real estate market.

Luogo Shiodome (Note)

A1

BELS

CASBEE

Tokyu Plaza Omotesando Harajuku★★★★★

Q plaza EBISU★★★★

A-FLAG BIJUTSUKAN DORI★★★★★

A-FLAG SHIBUYA★★★★

A-FLAG DAIKANYAMA WEST★★★★★

Q plaza SHINSAIBASHI★★★★

A-PLACE Ebisu Minami★★★★★

TLC Ebisu Building★★★★

A-PLACE Yoyogi★★★★★

Luogo Shiodome (Note)★★★★

A-PLACE Aoyama★★★★★

A-PLACE Ikebukuro★★★★

Tokyu Plaza Omotesando Harajuku★★★★★

OSAKI WIZTOWER★★★★★

A-PLACE Gotanda★★★★

icot Nakamozu (Konan bldg.)★★★★★

A-PLACE Shinagawa Higashi★★★★★

A-PLACE Shinagawa★★★★

Commecial Mall Hakata★★★★★

icot Mizonokuchi★★★★★

A-PLACE Ebisu Higashi★★★★

Kyoto Karasuma Parking Building★★★★★

Osaka Nakanoshima Building★★★★★

A-PLACE Shibuya Konnoh★★★★

A-PLACE Ebisu Higashi★★★

Market Square Sagamihara★★★★★

Ebisu Prime Square★★★★

A-PLACE Shibuya Konnoh★★★

Umeda Gate Tower★★★★★

icot Nakamozu★★★★

Q plaza EBISU
Q plaza HARAJUKU(Bldg.A / Bldg.B)
A-PLACE Yoyogi★★

A-PLACE Kanayama★★★★

A-PLACE Ikebukuro★★

A-PLACE Gotanda

★★

★★
★★

OSAKI WIZTOWER
Umeda Gate Tower
A-PLACE Shinagawa★★
★★
★
icot Nakamozu (Bank bldg.)★
(Note) Luogo Shiodome is planned to be disposed of in three stages: 20% co-ownership interests on November 30, 2022,
29% co-ownership interests on May 31, 2023, and the remaining 51% co-ownership interests on June 1, 2023, respectively.

39

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Initiatives with Suppliers and Tenants
TFHD Group’s Sustainable Procurement Policy
As a member of TFHD Group, TRM shares the Groupʼs Sustainable Procurement Policy published on January 31, 2020 and works on challenges to environmental
crisis such as climate change. Our objective is to work on this goal, together with all the stakeholders including our suppliers.

TFHD Group’s Sustainable Procurement Policy

1) Legal compliance1)-1 Total compliance with relevant laws andregulations

2) Respect forhuman rights2)-1 Compliance with and respect for international
human rights and labor standards2)-2 No tolerance of discrimination2)-3 No tolerance of harassment2)-4 Respect for local residents2)-5 Respect for minority rights

3) Ensuring a work
environment basedon safety, healthand well-being3)-1 Freedom of association, collective bargaining
rights3)-2 No tolerance of forced labor3)-3 No tolerance of child labor3)-4 Fair wages3)-5 Elimination of excessive working hours3)-6 Workplace health and safety measures3)-7 Emergency preparedness3)-8 Prevention of occupational accidents and illness3)-9 Industrial Hygiene measures3)-10 Measures for physically demanding work3)-11 Proper sanitary facilities, meals and housing3)-12 Protection of foreign and migrant worker rights

4)Ensuring proper
business ethics4)-1 Preventing corruption4)-2 Preventing contact with organized crime4)-3 Ensuring fair trade practices4)-4 Appropriate response to conflicts of interest4)-5 Responsible political involvement4)-6 Protection of intellectual property rights4)-7 Maintaining confidential information anddisclosure4)-8 Compliance hotline and whistleblower protection5)Environmental
measures5)-1 Combatting climate change5)-2 Biodiversity protection5)-3 Protection of pollution5)-4 Effective use of resources5)-5 Proper water use
5)-6 Ensure appropriate use of forest resources6)Improving service
and quality6)-1 Ensuring safety6)-2 Quality control and quality assurance systems6)-3 Proper information disclosure for products andservices

7)Proper information
management7)-1 Proper information management8)Business Continuity
Planning8)-1 Business Continuity Planning9)Contributing to local
communities9)-1 Contributing to local communities

10)Extension of the
Sustainable
Procurement Policy10)-1 Extension to business partners
10)-2 Cooperation for monitoring40

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Environment Management System
Green Procurement Standards
In line with the Group's Procurement Policy, TRM established the Green
Procurement Standards to translate the policy into practical measures. This
standard broadly states to suppliers that environment-friendly procurement
is to be carried out, and together with them, TRM works to promote moresophisticated efforts based on the Policy. The scope of application ofthis standard includes direct or indirect transactions related to products,
services, raw materials, and design/construction procured by TRM and API.

TRM established a unique environment management system (EMS) whichapplies PDCA cycle to continuously approach to environmental challenges.
We are working to continuously reduce environmental impacts in the
management operation for API, through the cycle of four steps; set targets(P), assess performance (D), analyze budget vs. actual (C), and implement
countermeasures for a better performance (A). The Asset Management
Department of Activia Management Division reviews actual performances in
its monthly meeting and reports the results to the management once a year,
then receives feedbacks and instructions for further improvement for thefollowing year, from the management.

Green lease agreement
API and its tenants have concluded agreements which includes the green
clause and share the importance of preservation and improvement of the
comfort and productivity of tenants and properties. The green clausestates that they should share information and work together for green
certification acquisition, environmental target setting, response toenvironmental regulations, etc.
API and one of its tenants have signed the memorandum of understanding
on a green lease linked to refurbishment works. It stipulates that when thetenant enjoys profit from energy-saving effect of the refurbishedequipment the property owner invested in, the tenant shall return areward to the owner.
In January 2022, we have set a target of 100% green lease included in the
new lease agreements. We keep making effort to reduce environmental
impact in cooperation with tenants such as information sharing.

Acquisition of ISO14001
In April 2022, API acquired ISO14001 for its EMS in real estate investment
management and management of portfolio properties.
<Overview of certification>
Applicable standard:ISO14001:2015, JIS Q
14001:2015
Certification scope: Real-estate investment
management and management of portfolio
properties
Certification institution: EQA
Registration No: EA220076

41

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Sustainable FinanceGreen bondTo build a portfolio with a stable and sustainable demand from our customers,
we believe that in addition to the location, use, scale, and quality ofproperties, reducing our environmental footprint and contributing to thesurrounding communities and environment are important.
API aims to further promote its sustainability initiatives through issuance ofgreen bonds and invite new investors to its investment corporation bonds bystimulating their demand who have interest in ESG investment.
In January 2022, API has set a target of 100% of new issuances ofinvestment corporation bond to be green bonds*. We will also consider
diversification of sustainable finance methods to support initiatives in debt
finance.
* On the condition of issuance based on the current framework

A. Eligible Green projects
Buildings that have achieved the top two levels of one or more of the thirdparty green building certifications/recertifications listed below within 36
months prior to the payment date of green bonds or are expected to achieve:
Certification for CASBEE for Real Estate (A or S rank), DBJ Green Building (4or 5 stars), BELS (4 or 5 stars)

Green bond framework
Use of proceeds
The proceeds from the green bonds will be allocated to funds for (i)acquisition of the Eligible Green Projects which are existing or new buildings
fulfilling the item A of the Eligibility Criteria defined below, or (ii)refurbishments fulfilling the item B of the Eligibility Criteria, or (iii) refinancing
the existing loans/investment corporation bonds which have been allocatedto funds to acquire Eligible Green Projects or refurbishments.

B. Refurbishments
Refurbishments with a primary purpose of achieving one of the targets listed
below and are completed within 36 months prior to the payment date ofgreen bonds or are expected to be completed:

Eligibility criteria
The proceeds of the green bonds will be allocated to the projects that
conform to one or more of the following criteria.

42Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Management of proceeds

Impact reporting

API calculates the amount of debts of Eligible Green Projects bymultiplying the calculable total book value of the Eligible Green
Projects* at end of the financial period immediately preceding eachdate of bond issuance by its LTV (Loan to Value / interest-bearing debt
to total assets) ratio. API will then monitor to ensure that the total
amount of unredeemed green bonds does not exceed the amount ofdebts of Eligible Green Projects.

If there is unredeemed balance of green bonds, API will annually disclose thesummary, progress and levels of certifications of the Eligible Green Projects.
Additionally, API will annually provide the following indicators of the Eligible Green
Projects where API has control over energy usage: Energy consumption, CO2
emissions, water consumption, and waste generation.
<Impact reporting>
Energyconsumption<Green balance sheet>per year(MWh)(Note 2)

CO2 emissions per year (t-CO2)(Note 3)

ActualScope 1

Scope 2

Scope 3

(Direct
emission)(Indirect
emission)(Emission from

Water
consumption

Waste
generation

per year (m3)per year (t)tenants)

FY201852,171

22,614---

271,0211,994

FY201944,66918,125---2474582,056

22,963

58

11,077

11,828226,405

1,913

FY2020(Note 1)
(Note 2)
(Note 3)

26,585(60,318)

Principally the figures shown above are relevant to the amounts of consumption, emissions or generation fromthe Eligible Green Assets (qualified as of the end of May of the following year) based on the cumulative amounts
for a fiscal year from April to March of the entire portfolio excluding lands.
Total amount of consumption fuel (gas, heavy oil, etc.), electricity and district heating / cooling of the properties.
For FY2020, the amount covers the area of the properties for which API has operational control of energy
management. Figure in parentheses includes emissions by tenants, same as the previous fiscal years.
The factor and the method applied to the calculation conform to "GHG Emissions Accounting, Reporting andDisclosure System" of the Ministry of the Environment. For FY2020, figure reported for Scope 3 falls undercategory 13 and is limited to the data which was able to be collected from tenants.

<Green bond summary>

ReportingAs far as there is unallocated amount of funds, API will disclose on its
website the list of financed/refinanced Eligible Green Projects andrefurbishments, allocation status including the amount of unallocatedproceeds, allocation schedule and managing method of net proceeds ofgreen bonds at end of May each year. API also disclose that theamount of unredeemed green bonds does not exceed the amount ofdebts of the Green Eligible Projects. After the issuance, as long as there
is an unredeemed balance of the green bonds, API will disclose theamount of total book value of the Eligible Green Projects and theamount of debts of Green Eligible Projects, as well as amount of
unredeemed green bonds at end of May each year.

Total issued
amount (\ mn)

Interest
rate

Issuance date

Redemption date

Description

The 10th unsecured
investment corporation
bonds (green bonds)

5,000

0.220%

2019/7/9

2024/7/9

Unsecured, nonguaranteed

The 11th unsecured
investment corporation
bonds (green bonds)

4,000

0.530%

2019/11/18

2029/11/16

Unsecured, nonguaranteed

The 12th unsecured
investment corporation
bonds (green bonds)

4,500

0.510%

2020/10/21

2030/10/21

Unsecured, nonguaranteed

The 14th unsecured
investment corporation
bonds (green bonds)

3,900

0.400%

2021/11/16

2031/11/14

Unsecured, nonguaranteed

Total

17,400

-

-

-

-

43

SocialOur view on Society
We believe that engagements with all our stakeholders including unitholders,
employees, local communities, tenants, and suppliers are essential for API andTRM to continue businesses. Fostering a good relationship with them in themedium to long term is one of the significant elements to maximize theunitholder value of API. Believing real estate as social instrument, whichconnect people living in the city with other people, we are on a mission tocontinue our business in compliance with social responsibility.

Introduction

Sustainability
Policy/Structure for
Promotion

External Evaluation/
International
Initiatives

TopicsGovernance

Environment

SocialESG Data

Stakeholder Engagement
In the pursuit of APIʼs and TRMʼs businesses, our relationships with investors and various other stakeholders, including employees, local communities, tenants,
and suppliers such as property managers (“PM”), building managers (“BM”), engineering report issuers, and real-estate appraisers are absolutely vital. We also
recognize that building favorable relations with these stakeholders in the medium-to long-term is an essential factor in our aim of maximizing unitholder value,
which is CRRʼs priority. We will continue to pursue our business as a member of society and work to further strengthen our relationships of trust with all
stakeholders involved with CRRʼs and TRMʼs activities.

Unit holders・Lenders

Employees◆Financial result briefing・Unitholders’ meeting◆Meetings with domestic andforeign institutional investors◆Seminar for Individual Investors◆Presentation Video

Suppliers◆Various Training programs◆Work-Life Balance◆Diversity

API
TRM

◆Joint seminars◆Local staff awards

Local
Communities◆Disaster
prevention measures◆Participation incommunity activities◆Security maintenance

Tenants◆Tenant satisfaction survey◆Cooperation with tenants◆Effort to advance
health/wellness◆Disaster prevention measures

45

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Employee Engagement
API, as a J-REIT, cannot have employees as stipulated under the Act on Investment Trusts and Investment Corporation of Japan. Therefore, the figures anddescriptions provided herein refer to those of TRM, the asset manager. As a group of experts in real estate management, TRM provides high-quality asset
management services with objective to maximize the value of its shareholders, and to that ends, we promote our own human-capital strategy in view of theimportance of human capital development. TRM is making continuous effort to have various systems to form a working environment and organization enabling torealize and promote the health and comfort of employees.

Human capital development & retention
Employee skill development
TRM provides a wide variety of training systems and offers self-learningmenu for the company's better investment management. Those training
systems are not only for permanent employees but also for contract
employees.

Support for acquiring business related qualifications
We support acquisition of necessary qualifications by employees in various
measures including financial aid for examination fees and class fees. We
also hand in monetary reward once employees pass specified
examinations.

<Status of employeesʼ qualifications>
Training program examples
Position-based trainings:
Examples include orientation training for mid-career hires on wide range ofknowledge on asset management business and understanding of regulatorycompliance; management training for senior management and medium level
employees; business skills training and anti-harassment seminar for all
employees
ESG training:
As part of awareness program on ESG investment, we invite external experts
to provide employees with periodic training for their deeper understanding of
ESG and introduction to new trends.
Courses to improve computer skill, English conversation and other lessons
are also provided.

Recruitment website

In December 2021, TRM launched in
the companyʼs website a career page toattract candidates by broadly presenting
the companyʼs businesses, features,and culture, etc. The contents include
interviews with current employees,
round-table talk, career paths possible
to take in the company.

(as of June 2022)

Use ofqualification
support system

Real Estate Broker

90

9

ARES* Certified Master

67

23

Certified Building
Administrator

18

0

Certified Property Manager

14

4Chartered Member of the Securities
Analysts Association of Japan

2

0

Real Estate Consulting Master

3

0Real Estate Appraiser

70First-class Architect

7

1

Qualification

Nb. ofemployees(FY2021)*Association for Real Estate Securitization

46

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

For Work-life Balance & Health of Employees
Personal system

Working-style reform

We have regular communication opportunities with employees
including one-on-one session with the direct supervisor and review
staffʼs performance based on the objective of career development
set by each. We encourage each staff to have their own career planand to acquire skills that are competent inside and outside of thecompany. ESG-related efforts and relevant items are included in
the annual target to set.

Recently, under the working-style reform trend including rectifying the practiceof working long hours, TRM actively takes approaches to introduce more flexible
working style of employees with objective to improve their work-life balance.

Human resource exchange

TRM receives staff seconded from the Sponsor or group companies
and dispatches its employees to the Sponsor to provide its
employees with varied professional experiences. Based upon thefact that the number of employees of TRM had increased to acertain size, partly because of the merger happened in 2017, we
decided to conduct shuffling of employees among different divisions
in order to raise career development of our employees. Meanwhile
when conducting such occupational relocation, we pay close
attention to the information firewall between the different businessdivisions.

Exchange with university students
API and TRM participated in 2019 in the IR presentationcompetition organized by USIC, a university studentsʼ investment
union and provided them with an opportunity to learn. The
Sponsor organizes intern programs and creates opportunities tocommunicate with students. TRM is not hiring new graduates,
though those from the Sponsor are seconded to TRM. Throughsuch efforts, we will continue to work to retain talented employees
and activate our organization.

“New working style” projectA team of employees voluntary launched in October 2021 a new project aiming todesign how to work effectively with three key words: ”office and digital
environment”, “communication”, and “in-company systems”, and is working tocreate a company where they can achieve more their best performances andprofessionally grow further. Proposals are made to the company, and as a resultof accepting one of them, online suggestion box has been set up.

Paid-leave usage encouragement
Every year, employees are required to set up so-called “commitment holidays”, aseven-day paid leave (five days in a row + two days immediately before or afterthat week) and to share such committed calendar within the teams they belong to.
TRM is also creating business environment for the employees to digest their
allocated paid leaves, by proactively setting up recommended days to use paid
leaves.
Flex-time work system
We have introduced a flex time working system for all employees.
Core time is set between 11:00 and 15:00, and employees are free to set startand finish of their work hours around the core time to support more flexible
working style considering the wide variety of living environment of each individual.
Work-from-home system
The Covid-19 outbreak pulled the need for introduction of work-from-home, andwe are working to improve productivity with reducing commuting time toworkplace. Use of serviced office space is also allowed under preset rules.
Effort to reduce overtime
In order to prevent excessive long working hours, TRM is taking necessary
measures. The employees are required to set an upper limit of overtime working
hours at the beginning of the fiscal year, and such objectives are regularly
monitored and reminded. In certain cases, we intentionally raise them as ameeting agenda if the working hours are excessively long.

47

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Welfare Programs
TRM values its employees, their well-beings, and healthy performance inwork, and provides staff with various welfare programs to improve theirsatisfaction.
Cafeteria plan
To support self-support and independence of permanent employees, we
provide them with financial aid for medical fees, subsidies for use of sports
facilities, studying, volunteer activities, employee shareholding program, anduse of the facilities Tokyu group companies operate.
Welfare programs-Various systems are in place to provide support for employees at each stageof life, such as maternity leaves, childcare leaves, child medical leave,nursing-care leave.
-We support asset formation by permanent employees, by inviting externalfinancial planners to offer introductory sessions on topics including defined
contribution pension matching program which TRM offers and the insurance
system by the Tokyu group.
-We increased the number of available facilities to enable more employees to
use the popular exclusive resort membership “Tokyu Harvest Club.”
Cumulative unit investment program
We provide employees with an opportunity to invest in the investment unitsof API and Comforia Residential REIT as well as the share of TFHD. We
support to build their personal assets through offering financial incentives
and encourage them to raise their consciousness of those management
performance. The program should also lead to the continual growth of API
and enhancement of APIʼs unitholder value.

Internal communication
TRM periodically organizes employee satisfaction surveys and explanatory
sessions on the corporate annual objective and medium- to long-term vision,
for a more profound understanding between the company and employees,
expecting to develop the productivity of our organization where employees
can deliver their best performance.

Employee study groups
Younger employees have led voluntary organization of cross-divisional study
groups to share information on businesses unique to each division, and onnecessary knowledge/skills.
Support for company circle activities
Financial support is provided to employees for company club activities.
Luncheon
To enhance communication among employees, regular luncheons by groups
of a small number of staff have been organized.

48

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Employee Health & Comfort

Governance

Environment

SocialESG Data

Healthcare

TRM is making effort to maintain the workplace healthy and comfortable,encouraging employees to show the best performance.

Employees are obliged to take annual medical checkups. There is also a mental
health consultation desk.

Working environment
Workplace of TRM is in Shibuya, an exciting and innovative city where theareas people live and play are closely connected.
Employees can take beverages for free and use individual spaces, and aspace for refreshment is created with green on the terrace of the building
where TRM is located, Shibuya SOLASTA. The building earned the CASBEE
Wellness Office, a recognition of the building's ability to promote health andcomfort of people work in the building.

Health Committee
Health Committee is established to improve employees' occupational health.
The Committee examines labor-related problems occurred in the company,
reports the results of investigation on comfort and safety in the workspace, andtakes measures to increase awareness for mental and physical health by poster,
etc. Lectures by industrial physicians on related themes are held.
One-on-one session with HR
Once a year, employees have one-on-one session with HR department, where
they can discuss and share their career development plan and explain their
troubles and expectations related to the relationship with supervisors andcolleagues.
Employee satisfaction survey
Every year, TRM conducts an employee satisfaction survey with a third-party
partner. Based upon the results of the survey, we are taking variety of means
to improve employee satisfaction level.

FY2020

FY2021

Employee engagementlevel*

60.8

62.8

Nb. of responses / Nb. of
eligible employees

96/98

100/100

Participation rate

98％

100％

*Quantifies the attachment and trust between employees and the company

49

Sustainability
Policy/Structure for
Promotion

Introduction

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Diversity
TFHD Group accepts the difference in a variety of attributes such as gender, age, nationality and handicap and brings about innovation by showing individual
ability to the maximum and continues to create value through its business activities. TRM is working to make a workplace without any discriminatory treatment
and compensation due to different attributes, where all employees can rely on.

Human Right Policy
TRM shares the Human Right Policy published in January 2020 by TFHD Group and carries out its business in belief that respect the human rights ofstakeholders of the group including employees is essential and it is what all companies are expected to do.

TFHD Group’s Human Rights Policy
TFHD Group solves social issues through our business activities and works with stakeholders to realize a sustainable society and growth. The Group recognizes that
respecting the human rights of employees and all stakeholders involved in its businesses is an essential requirement of a company with global operations.
1.

Adherence to International Human Rights Standards: The Group upholds and respects human rights as outlined in the International Bill of Human Rights(Universal Declaration of Human Rights, the International Covenant on Civil and Political Rights, and the International Covenant on Economic, Social andCultural Rights) and the ILO Declaration on Fundamental Principles and Rights at Work. It promotes responsible management according to the UN Guiding
Principles on Business and Human Rights, as well as the principles of the UN Global Compact. Whenever there is a conflict between internationally recognizedhuman rights standards and the laws of a country in which it operates, the Group seeks ways to uphold global human rights principles.

2.

Importance of this Policy: The Group states “Respect human rights” in its Code of Conduct and encourages individual employees to give due consideration tohuman rights in their activities. In addition to respecting basic human rights in compliance with the local laws and regulations implemented in the regions where
it has bases, it takes steps to prevent discriminatory behavior and speech, sexual harassment and power abuse while making efforts to respect the diverse
values, individually, and privacy of individuals. The Tokyu Fudosan Holdings Group Human Rights Policy (the “Policy”) serves as a detailed explanation
concerning the requirement to respect human rights in the Group Code of Conduct.

3.

Scope: This Policy applies to all Group officers and employees, and the necessary education and training is provided. The operating officer in charge of humanresources is responsible for the application of this Policy. Business partners of the Group are expected to support this Policy and to work with the Group toprotect human rights.

4.

Human Rights Due Diligence and Remedies: The Group carries out human rights due diligence to identify any actual or potential impacts that business activities
may have on human rights, and the Group then prevents or mitigates the. Whenever it is discovered that the Groupʼs activities have caused or contributed toadverse impacts on human rights, the Group will work to remedy the situation. The Group will make efforts to rectify any business or service that may be linked
to adverse impacts on human rights through the actions of business partners or other relevant parties. A mechanism will also be established that allows internaland external stakeholders to report and consult on Group activities that may affect human rights.

5.

Stakeholder Dialogue: As the Groupʼs wide-ranging business areas, including real estate, largely affect communities and society, it is essential to work closelywith a variety of stakeholders. With this in mind, the Group engages in dialogue with its stakeholders, including employees, local communities, business
partners, and customers. It also shares the progress of its efforts on its website and in its integrated reports.

6.

Priority Human Rights Issues: In order to avoid any infringement of human rights as a result of business activities, the Group will maintain a close dialogue withstakeholders and external experts concerning social and environmental changes and its business direction, and it will identify priority human rights issues as
they arise.

50

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

UN Global Compact
Respecting basic labor rights and aiming at coexistence and co-prosperity with employees, TFHD Group supports and respects the OECD Guidelines forMultinational Enterprises, international labor standards and Guiding Principles on Business and Human Rights. In December 2016, the Group stated its support
for the UN Global Compact. In accordance with the ten principles of the UN Global Compact in the areas of human rights, labor, environment and anticorruption, we promote responsible management and contribute to a sustainable society. TFHDʼs support for UN Global Compact shall apply to all groupcompanies including TRM.

The 10 Principles of the UN Global Compact

Human rights

LabourPrinciple 1: Businesses should support and respect the protectionof internationally proclaimed human rights; andPrinciple 2: make sure that they are not complicit in humanrights abuses
Principle 3: Businesses should uphold the freedom of associationand the effective recognition of the right to collective
bargaining
Principle 4: the elimination of all forms of forced and compulsory
labour:Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respect of
employment and occupation

Environment

Principle 7: Businesses should support a precautionary approachto environmental challenges;
Principle 8: undertake initiatives to promote greater
environmental responsibility; andPrinciple 9: encourage the development and diffusion ofenvironmentally friendly technologies

Anticorruption

Principle 10: Businesses should work against all forms ofcorruption, including extortion and bribery

Fundamental rights in hiring and employment of TFHD GroupTFHD Group will respect the following matters as a set of fundamental rights in hiring andemployment in order to achieve co-existence and co-prosperity with employees.
1.Prohibition of discrimination: We will eliminate all discriminatory actions based onnationality, race, religion, beliefs, gender, age, sexual orientation and/or disability and will
strive to maintain equal opportunity and treatment in hiring and employment.
2.Prohibition of harassment: We will never engage in sexual harassment, power harassment,or any other form of harassment toward people in the workplace. We will also never tolerate
language or actions related to harassment.
3.Prevention of forced labor: We will strive to eliminate and prevent all forms of forced labor.
4.Curtailment of overwork and reduction of overtime: We will establish a fundamental policy
on work management to curtail overwork and reduce overtime work giving consideration toemployeesʼ work-life balance and their health maintenance/improvement. In Japan, we willcomply with the “Article 36 Agreement.”
5.Prevention of child labor: We will support and practice the effective abolishment of childlabor.
6.Respect for freedom of association and the right to collective bargaining: In recognizingthat the freedom of association and the right to collective bargaining are fundamental
human rights that must be respected by a company, in countries and regions where theformation of labor unions is allowed, we fully recognize employeesʼ right to organize, right tocollective bargaining and right to strike in labor agreements. In addition, even in countries
and regions that do not allow the formation of labor unions due to laws or practice, we will
effectively promote conflict resolution through dialogue involving management and laborwith the purpose of securing the freedom of association and the right to collective bargaining.
7.Payment of wages above and beyond the minimum wage: We will comply with labor laws
and regulations and adopt a fundamental policy on labor management in which we will pay
wages to employees above and beyond the minimum wage for acceptable living conditions.

51

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Key Employee Data
Apr. 30, 2020

Apr. 30, 2021

Apr. 30, 2022

97
55
42
47
25
22
12
1
11
7
1
6
38
29
9
4
3
1
29
26
3
1
1
0
8
5
3
1
1
0
3.9 yrs
3.4 yrs
4.4 yrs

106
59
47
53
30
23
14
1
13
8
2
6
39
28
11
4
4
0
31
26
5
3
3
0
6
5
1
0
0
0
4.4 yrs
3.6 yrs
5.5 yrs

103
60
43
56
32
24
13
1
12
9
3
6
34
27
7
4
2
2
32
27
5
2
2
0
6
5
1
5
3
2
4.8 yrs
4.0 yrs
5.9 yrs

Number of employees*1
MaleFemaleOf which permanent staff
Male
FemaleOf which contract staff
Male
FemaleOf which temporary staff
Male
FemaleOf which seconded from TLC
MaleFemaleNumber of Directors*2
Male
FemaleNumber of senior management
Male
FemaleNumber of employees aged 60 or more
Male
FemaleNew hire
Male
FemaleTurn over*3
MaleFemaleAvg. aggregated years of service *4
MaleFemaleHealth check participation
Stress check participation
Annual paid leave per capita
Ratio of handicapped employee
Monthly avg. overtime per capita
Work-related injury and death
Absentee rate
Ratio of employees on leave
Childcare leave users
Childcare short working hour
/Childcare off-peak commuting users
Nursing-care leave users
Home office utilization rate *1

FY201996.0%
100.0%
11.5 days
1.2%
21.2 hours
0
0.5%
0.0%
0

FY202094.7%
98.9%
9.9 days
1.0%
19.4 hours
0
0.4%
0.0%
3

FY2021100.0%
100.0%
11.1 days
1.0%
24.0 hours
0
0.3%
1.0%
6

1

0

5

0
100.0%

0
100.0%

0
100.0%*1 For FY2019, the rate represents the ratio of employees utilized home office from March to April 2020
*2 Financial year from April of the year to March of the next year

Training hours per capita
Training expense per capita

FY202126.5 hours¥89,736*1 Trainings include those for human capital development, personal skill development
and essential trainings related to ESG, compliance and risk management.
*2 ESG trainings are mandatory for all employees and participation rate for FY 2020 is 100%.
*3 Financial year from April of the year to March of the next year

*1 Permanent staff, contract staff and staff seconded from TLC*2 Includes contract and temporary staff*3 Permanent staff*4 Includes the years working at the asset managers before merger to TRM in July 201752

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Contribution to Local Communities
API and TRM believe that contribution to local communities lead to the improvement in value of the APIʼs owned properties and ultimately by the unitholder value.
We make a variety of efforts in the owned properties to enhance communication with the local communities with an expectation that our business operation is toserve an important role for the society.

Measures taken in owned properties
Tokyu Plaza Omotesando Harajuku
In the “Forest of Omohara” at the rooftop terrace of Tokyu Plaza
Omotesando Harajuku, we set a water fountain for birds and created anenvironment comfortable for them and other living creatures.
A variety of experiences are proposed to local communities including an
installation of bird houses hand-crafted by kids from a neighborhood
elementary school and vegetable harvest experience by a group ofkindergarten children.

In Spring 2022, an exhibition of students and graduatesʼ pieces was heldin the property in collaboration with Tokyo Design Academy.
The event provided a place for students who have lost exhibition
opportunities during the pandemic, and also contributed to revitalizing theproperty.

DECKS Tokyo BeachWe created a playground for kids in the floor for children's wear and products,
and installed furniture and green area on the Seaside Deck, offering visitorsfrom inside and outside of Japan a refreshing space.

Shiodome Building
We create a community in the area through participation to the local events.
Vacant spaces of the property are offered to the “HAMASITE Summer
Festival”, a traditional summer event, which is joined by various stakeholders
in the area including residents, workers, tenants, PM and BM, etc.

53

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Preparation for disasters
In the owned properties of API, we hold disaster drills to test rapid response
under emergency and implement BCP-purposed renovation works.
The properties are equipped with AEDs (Automated External Defibrillator),other emergency supplies, and fixtures.
Further, the premise of Ebisu Prime Square is designated by Shibuya ward
one of temporary gathering sites for people living or working in the area inthe event of a disaster.

Governance

Environment

SocialESG Data

Donation through regional revitalization support tax
payment
As part of the effort to the “contribution to local communities” that TRM
shares with API as one of its Materiality, it participated a fundraising program
to the Hokkaido prefecture utilizing the regional revitalization support tax
payment system in 2020 and 2021. We expect that the participation to theprogram helps to further strengthen relationship with the community, TRM
and API.

(Source) Hokkaido pref. website

54

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Tenant Engagement
API believes that its owned properties should always meet tenant preferences to enhance the medium- to long-term value of our unitholders, and therefore
tenant satisfaction serves an essential role for that. To that end, we consistently communicate with them to understand their needs and reflect them for ourasset management operation.

Satisfaction survey
API makes effort to improve tenant satisfaction by regularly conducting thirdparty surveys to understand their needs and complaints.
In a previous year, the results scored low in terms of cleanliness of the officebuildings, and after providing intense training to building keepers andperforming renovation work of toilets and kitchenettes, there was asignificant satisfaction improvement in the survey held in the following year.
Survey has originally targeted office tenants and a part of retail tenants, but
the number of retail respondents has recently extended.

Effort to advance health / wellness
We regularly implement renovation works at common area to provide ourtenants with comfort working space, which reflects the results of tenantsatisfaction survey and discussion with PMs. Our efforts for tenantsʼ healthand comfort include renovation of areas catching peopleʼs attention such as
restrooms, mini kitchens, elevators and escalators, and as preventive
measures against COVID-19, installation of antiseptic solution, temperature
inspection, anti-virus coating on the walls, etc.

Cooperation with tenants
As part of approaches for cooperation with tenants, we created asustainability-guidance leaflet and distributed to them. The guidance
introduces our initiatives presenting practical examples with a view onenvironment and health and wellness of working people. API continue toenhance sustainability effort in cooperation with tenants.

Green lease agreement (cf. p.41)

Measures taken in owned properties
Tenant awards / customer service competition
Three times a year, we award a commercial tenant with the best tenant prize
to with an aim to encourage operations of all the tenants and to raise
employee motivations. Customer service competition and training are alsoorganized with objective to further raise the level of the customer service oftenant company staff and therefore increase customer satisfaction.

Perks for tenant employees working
in API’s office properties
Various perks are offered to tenant employees such as
discount coupon for the Sponsor groupʼs commercial
facilities and hotels.
It enables tenant companies to enhance employee
benefits which represents an opportunity for API to betenantsʼ first choice.

55

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Supplier Engagement
TRM recognizes the importance of cooperation with its suppliers, as stated in the Sustainability Policy, that it provides initiatives and procurement withconsideration to the environment and society, through engagement to suppliers such as property managers. As part of the initiatives, TRM established the Green
Procurement Standards and monitors ESG consideration in the operation of its important suppliers including property managers.

ESG trainings toward PMs
We work to foster a culture that ESG initiatives are to be taken by our entire
supply chain, not limited to the officer and employees of TRM. To that end,
ESG training sessions are organized for PMs. In FY2021, TRM organized also
virtual seminars themed ESG trend, Materiality and application of the Green
Procurement Standards.

Cooperation through the Green Procurement Standards(cf. p.41)
TRM communicates the principle of the Green Procurement Standards to its
direct and indirect suppliers it works with, aiming to further enhance its
initiatives on a basis of mutual understanding.

Introducing label-free bottles:
3R (reduce, reuse, recycle) practice based on Green
Procurement Standards

PM awards
This award recognizes the outstanding performance of property
management staffs contributing to upward rent revision, lease-up,
prevention of lease cancellation and downward rent revision, contracting
green lease, implementation of renovation works to reduce environmental
impact, etc.
We expect that this award helps to foster a unified partnership between
TRM and property managers.

Since April 2022, TRM has introduced
label-free pet bottles. Label-freebottles serve to reduce use of plastic
and simplify the sorting of waste.
We use the label-free bottles whenholding meetings and receiving visitors
and procure them from suppliers whoare committed to work for asustainable society and environment.
We believing that a daily purchase of
supplies with a view of sustainability
will contribute to support thesustainability.

56

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Initiatives toward Unitholders and Investors
API and TRM view appropriate information disclosure to and proactive dialogue with investors as essential tasks.
Based on the policy described above, TRM holds regular meetings with institutional investors in Japan and from abroad (Europe, North America, Asia, etc.). In
addition, it is engaged in proactive information disclosure by holding briefings for individual investors, participating in events and online seminars aimed at
individual investors, publishing presentation videos of financial result briefings, and more.

J-REIT glossary on API’s website

For institutional investors
During the pandemic, API and TRM remain proactive to carry out investor
relation activities utilizing teleconference and videoconferences.
From July 2021 to August, we had 66 dialogues with domestic and foreign
investors for the financial results of the fiscal period ended May 2021, andover 110 dialogues from January to April 2022 for the fiscal period ended
November 2021. Also, we respect the fair disclosure principle for the foreign
investors by preparing the financial result presentation videos in Japaneseand English and publishing them at the same time.

Glossaries for J-REITs in general and API-specific vocabularies are posted on
our website. (Japanese only)

For retail investors
We are maintaining opportunities to communicate with individual investors
through participation to webinars organized Nikkei and Nihon Securities
Journal, etc.

<March 2021, March 2022>
Nikkei J-REIT Infrastructure
Fund Forum Web Seminar<April 2022>
Nihon Securities Journal“J-REIT online seminar”

57

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

GRI Index
The latest version of the table is on APIʼs website as well.
API
Disclosure
GRI 100: Universal Standards
102: General Disclosures 2016
1. Organizational Profile
102-1
Name of the organizationa Name of the organization
102-2

102-4

102-5

102-6

Location or reason for omission

https://www.activiareit.co.jp/en/about/company.html

Profilehttps://www.tokyu-trm.co.jp/en/profile/Profilehttps://www.activiareit.co.jp/en/features/index.html

API Features

https://www.tokyu-trm.co.jp/en/profile/ProfileAPI Features

https://www.tokyu-trm.co.jp/en/index.html

Home

Portfolio List

https://www.tokyu-trm.co.jp/en/profile/ProfileProfilehttps://www.tokyu-trm.co.jp/en/profile/ProfileProfilehttps://www.tokyu-trm.co.jp/en/profile/ProfileAPI Structure

https://www.tokyu-trm.co.jp/en/profile/ProfileProfilehttps://www.tokyu-trm.co.jp/en/profile/ProfileTotal unitholders'
capitalhttps://www.tokyu-trm.co.jp/en/profile/ProfileAPI Structure

https://www.tokyu-trm.co.jp/en/profile/ProfileActivities, brands, products, and services
a A description of the organization’s activities.

102-3

TRM

Location or reason for omission

Primary brands, products, and services, including
https://www.activiab an explanation of any products or services that
reit.co.jp/en/features/index.html
are banned in certain markets.
https://www.activiareit.co.jp/en/portfolio/index.html
https://www.activiareit.co.jp/en/ir/library.html
Location of headquarters
https://www.activiaa Location of the organization’s headquarters.
reit.co.jp/en/about/company.html
Location of operations
Number of countries where the organization
operates, and the names of countries where it
https://www.activiaa
has significant operations and/or that are relevant reit.co.jp/en/about/company.html
to the topics covered in the report.
Ownership and legal form
https://www.activiaa Nature of ownership and legal form.
reit.co.jp/en/about/structure.html
Markets served
https://www.activiaa Markets served, including:reit.co.jp/en/about/company.html
i. geographic locations where products andhttps://www.activiaservices are offered;
reit.co.jp/en/finance/capital.html
https://www.activiaii. sectors served;
reit.co.jp/en/about/structure.html
iii. types of customers and beneficiaries.

https://www.activiareit.co.jp/en/finance/capital.html

Asset Management
ReportCapital and Major
Investors
https://www.tokyu-trm.co.jp/client/

Customer-first
Business Operation
Policy (inJapanese)58Introduction

102-7

Sustainability
Policy/Structure for
Promotion

Disclosure
Scale of the organizationa Scale of the organization, including:i. total number of employees;

102-8

102-9

TopicsExternal Evaluation/
International
Initiatives

GovernanceAPI
Location or reason for omission

Environment

SocialTRM
Location or reason for omission

https://www.activiaAPI Structure
https://www.tokyu-trm.co.jp/en/profile/
reit.co.jp/en/about/structure.html
Due to legal restrictions, there are no
employees in the investment corporation,and management is entrusted to the asset
https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3
management company, TLC REITManagement Inc.
1(Head Office only)
1(Head Office only)
https://www.activiaFinancial Highlights
reit.co.jp/en/ir/highlight.html

ii. total number of operations;iii. net sales (for private sector organizations) or
net revenues (for public sector organizations);
iv. total capitalization (for private sector
https://www.activiaInterest-Bearingorganizations) broken down in terms of debt andreit.co.jp/en/finance/debt.html
Debt
equity;https://www.activiav. quantity of products or services provided.
Portfolio Data
reit.co.jp/en/portfolio/data.html
Since the investment corporation does nothave employees due to legal restrictions,
Information on employees and other workers implementations by the asset managementcompany's employees are applicable to this
topic.
Total number of employees by employmentacontract (permanent and temporary), by gender.
Total number of employees by employmentbcontract (permanent and temporary), by region.
Total number of employees by employment typec(full-time and part-time), by gender.
Whether a significant portion of the organization’s
activities are performed by workers who are notd employees. If applicable, a description of thenature and scale of work performed by workers
who are not employees.
Any significant variations in the numbers reported
in Disclosures 102-8-a, 102-8-b, and 102-8-ce(such as seasonal variations in the tourism oragricultural industries).
Supply chain
A description of the organization’s supply chain,
Tokyu Fudosan
including its main elements as they relate to the https://www.activiaHoldings Group'saorganization’s activities, primary brands, products, reit.co.jp/en/features/feature_02.html
Comprehensive
and services.
Value Chain
https://www.activiaAPI Structure
reit.co.jp/en/about/structure.html

ESG Data

ProfileKey Employee Data

https://www.tokyu-trm.co.jp/en/profile/Profilehttps://www.tokyu-trm.co.jp/en/attention/

About Financial
Transactions

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

Key Employee Data

The asset management company solely operates at the Head
Office, there is no regional difference by region.
https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

Key Employee Data

Not applicable (major part of activities are performed by
employees)

No significant variations in the numbers reported.

https://www.tokyu-trm.co.jp/en/index.html

SDGs strongly
related tomateriality

59Introduction

Sustainability
Policy/Structure for
Promotion

TopicsDisclosure
Significant changes to the organization and its
102-10supply chain
Significant changes to the organization’s size,astructure, ownership, or supply chain, including:External Evaluation/
International
Initiatives

GovernanceAPI
Location or reason for omission

Environment

SocialESG Data

TRM
Location or reason for omission

Notice Concerning
Changes in
i. Changes in the location of, or changes in,
https://www.activia-reit.co.jp/file/en-news- Organizational
operations, including facility openings, closings, and 024389594b32514520574e8af085bb4cda6 Structure
expansions;
7ee62.pdf
of the AssetManagement
Company

Notice Concerning
https://www.activia-reit.co.jp/file/en-news- Changes in
119b982f73dfc4cfb0b24bd7292c2d23f7649 Organizational
0d2.pdf
Structure, etc. andDirectors
Notice Concerning
Change ofPresident & CEO
https://www.activia-reit.co.jp/file/en-news- and Appointment ofhttps://www.activia-reit.co.jp/file/en-newsa239ef3c7766ff7874c31858c23e0bee4e06 Chairman anda239ef3c7766ff7874c31858c23e0bee4e06e32c.pdf
e32c.pdf
Directorsof the AssetManagement
Company
Notice Concerning
https://www.activia-reit.co.jp/file/en-news- Changes to Articles
97ae7adc3cbc694a785068615291ee9bb60 of Incorporation and03b85.pdf
Appointment of
Directors
Notice Concerning
Completion ofii. Changes in the share capital structure and other https://www.activia-reit.co.jp/file/en-news- Additional
capital formation, maintenance, and alteration
82645f76d33573b52f69306ea511e4099d99 Acquisition of API’s No significant changes
operations (for private sector organizations);
10bf.pdf
Investment Units
by Tokyu Land
Corporationiii. Changes in the location of suppliers, thestructure of the supply chain, or relationships with No significant changes
No significant changes
suppliers, including selection and termination.
102-11
Precautionary Principle or approach
Whether and how the organization applies thehttps://www.activiaa
Sustainability Policy https://www.tokyu-trm.co.jp/en/sustainability/index.html
Precautionary Principle or approach.
reit.co.jp/en/sustainability/index.html
https://www.tokyu-trm.co.jp/en/sustainability/esg.html

Notice Concerning
Change of President& CEO andAppointment ofChairman and
Directorsof the AssetManagement
Company

Sustainability
Policies
Risk Management

60

Introduction

Sustainability
Policy/Structure for
Promotion
Disclosure
External initiatives

102-12a102-13Topics

A list of externally-developed economic,
environmental and social charters, principles, orother initiatives to which the organization
subscribes, or which it endorses.

External Evaluation/
International
Initiatives

API
Location or reason for omission

Governance

Environment

SocialESG Data

TRM
Location or reason for omission

TLC REIT Management Inc., the asset
management company of theInvestment corporation, is a GRESBMember, and Tokyu Fudosan Holdings
Corporation is a signatory of the United
Nations Global Compact. The
investment corporation is operated
along with the support for these
intiatives.

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c5

Membership of associations
A list of the main memberships of industry or otherassociations, and national or international
advocacy organizations.

International
Initiatives

The Investment Trusts Association, Japan
The Association for Real Estate Securitization
GRESB Real Estate

2. Strategy
102-14

Statement from senior decision-makerA statement from the most senior decision-makerof the organization (such as CEO, chair, or
https://www.activiaa equivalent senior position) about the relevance ofreit.co.jp/en/about/index.html
sustainability to the organization and its strategy
for addressing sustainability.
102-15Key impacts, risks, and opportunities
A description of key impacts, risks, andhttps://www.activiaa
opportunities.
reit.co.jp/en/sustainability/material.html
3. Ethics and Integrity
Values, principles, standards, and norms of102-16
behavior
A description of the organization’s values,
https://www.activiaa
principles, standards, and norms of behavior.
reit.co.jp/en/features/index.html
Since the investment corporation does
not have employees due to legal
Mechanisms for advice and concerns about
102-17
restrictions, implementations by the
ethicsasset management company's
employees are applicable to this topic.

Messagehttps://www.tokyu-trm.co.jp/en/message/

Message

Materiality
Identification

https://www.tokyu-trm.co.jp/en/sustainability/materiality.html

Materiality

API Features

https://www.tokyu-trm.co.jp/en/philosophy/

Philosophy

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c4

Establishment ofwhistle-blowing
systemEstablishment ofhttps://www.tokyu-fudosan-hd.co.jp/english/about/compliance/ ComplianceHelpline
4. Governance102-18Governance structure
Governance structure of the organization,a including committees of the highest governancebody.

Committees responsible for decision-making onbeconomic, environmental, and social topics.
102-19Delegating authority

https://www.activiareit.co.jp/en/about/management.html
https://www.activiareit.co.jp/en/about/structure.html
https://www.activiareit.co.jp/en/sustainability/index.html
https://www.activiareit.co.jp/en/sustainability/index.html
https://www.activiareit.co.jp/en/about/structure.html

Management

https://www.tokyu-trm.co.jp/en/profile/ProfileAPI Structure

https://www.tokyu-trm.co.jp/en/organization/

Organization

Our Structure tohttps://www.tokyu-trm.co.jp/en/sustainability/
Promote Sustainability
Our Structure tohttps://www.tokyu-trm.co.jp/en/sustainability/
Promote Sustainability

Promotion System
Promotion System

API Structure

61

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsDisclosure
Executive-level responsibility for economic,
environmental, and social topics

102-20External Evaluation/
International
Initiatives

API
Location or reason for omission
Due to the organizational
characteristics, the responsible officer isappointed in the asset managementcompany.

Whether the organization has appointed an
executive-level position or positions withhttps://www.activiaresponsibility for economic, environmental, andreit.co.jp/en/sustainability/index.html
social topics.
Whether post holders report directly to the highest https://www.activiab
governance body.
reit.co.jp/en/sustainability/index.html
Consulting stakeholders on economic,
environmental, and social topicsa102-21

102-22Governance

Environment

SocialESG Data

TRM
Location or reason for omission

Our Structure tohttps://www.tokyu-trm.co.jp/en/sustainability/
Promote Sustainability

Promotion System

Our Structure tohttps://www.tokyu-trm.co.jp/en/sustainability/
Promote Sustainability

Promotion System

Processes for consultation between stakeholders
https://www.activiaSDGs strongly linked
a and the highest governance body on economic,
https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c2
reit.co.jp/en/sustainability/material.html to our Materiality
environmental, and social topics.

Commitment toEnvironment

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c2

Commitment toSocietyhttps://www.tokyu-trm.co.jp/en/organization/

Organization

https://www.tokyu-trm.co.jp/en/profile/

Executive Board

https://www.tokyu-trm.co.jp/en/profile/

Executive Board

Composition of the highest governance bodyand its committees

102-23Chair of the highest governance body102-24

Nominating and selecting the highest
governance bodyhttps://www.activiareit.co.jp/en/about/structure.html

API Structure

https://www.activiaArticles ofreit.co.jp/file/ir_library_other_fileIncorporation (in6b6b9bc49fab02aafb56fef3913196c491
Japanese)
41507a.pdf

https://www.activiaArticles ofreit.co.jp/file/ir_library_other_fileIncorporation (in6b6b9bc49fab02aafb56fef3913196c491
Japanese)
41507a.pdf
https://www.activiaCriteria used for nominating and selecting highest
Articles ofreit.co.jp/file/ir_library_other_filegovernance body members, including whether andIncorporation (in6b6b9bc49fab02aafb56fef3913196c491
how:Japanese)
41507a.pdf
i. stakeholders (including shareholders) are
involved;
ii. diversity is considered;iii. independence is considered;iv. expertise and experience relating to economic,
environmental, and social topics are considered.
Conflicts of interest
Processes for the highest governance body toGovernance Structure
https://www.activiaa ensure conflicts of interest are avoided andTo Maximize
https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c4
reit.co.jp/en/features/feature_03.html
managed.
Unitholder Value
https://www.activiaReport on
Whether conflicts of interest are disclosed toreit.co.jp/file/ir_library_other_fileManagementb
https://www.tokyu-trm.co.jp/en/profile/stakeholders, including, as a minimum:
c5d20a55705e5ea471b1cbe311dcc1d8 Structure of the REIT
b0af06e6.pdf
Issuer (in Japanese)i. Cross-board membership;
ii. Cross-shareholding with suppliers and otherstakeholders;iii. Existence of controlling shareholder;iv. Related party disclosures.
Nomination and selection processes for thehighest governance body and its committees.

102-25Compliance

Profile62Introduction

102-26102-27102-28102-29Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

API
Disclosure
Location or reason for omission
Role of highest governance body in setting
purpose, values, and strategy
Highest governance body’s and senior executives’roles in the development, approval, and updating
https://www.activiaa of the organization’s purpose, value or mission
reit.co.jp/en/sustainability/index.html
statements, strategies, policies, and goals related
to economic, environmental, and social topics.
Collective knowledge of highest governancebody
Measures taken to develop and enhance thea highest governance body’s collective knowledge of
economic, environmental, and social topics.
Evaluating the highest governance body’s
performance
Processes for evaluating the highest governancea body’s performance with respect to governance ofeconomic, environmental, and social topics.
Identifying and managing economic,
environmental, and social impacts
Highest governance body’s role in identifying andmanaging economic, environmental, and social
https://www.activiaa topics and their impacts, risks, and opportunities –reit.co.jp/en/sustainability/material.html
including its role in the implementation of due
diligence processes.
Whether stakeholder consultation is used tosupport the highest governance body’s
https://www.activiab identification and management of economic,
reit.co.jp/en/sustainability/material.html
environmental, and social topics and their impacts,
risks, and opportunities.

Governance

Environment

SocialESG Data

TRM
Location or reason for omission

Our Structure tohttps://www.tokyu-trm.co.jp/en/sustainability/
Promote Sustainability

Promotion System

https://www.tokyu-trm.co.jp/en/sustainability/esg.html

Performance
Evaluation Process

https://www.tokyu-trm.co.jp/en/sustainability/esg.html

Performance
Evaluation Process

Materiality
Identification

https://www.tokyu-trm.co.jp/en/sustainability/materiality.html

Materiality

Materiality
Identification

https://www.tokyu-trm.co.jp/en/sustainability/materiality.html

Materiality

102-30Effectiveness of risk management processes

https://www.activiareit.co.jp/en/features/feature_03.html

Governance Structure
To Maximize
https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c4
Unitholder Value

Efforts on
Governance102-31

Review of economic, environmental, andsocial topics

https://www.activiareit.co.jp/en/sustainability/index.html

Our Structure tohttps://www.tokyu-trm.co.jp/en/sustainability/index.html
Promote Sustainability

Promotion System

102-32102-34Frequency of the highest governance body’s
review of economic, environmental, and social
topics and their impacts, risks, and opportunities.
Highest governance body’s role inhttps://www.activiaOur Structure tohttps://www.tokyu-trm.co.jp/en/sustainability/index.html
sustainability reporting
reit.co.jp/en/sustainability/index.html
Promote Sustainability
No critical concerns reported during the
Nature and total number of critical concerns
No critical concerns reported during the reporting period.
reporting period.

Promotion System

63Introduction

102-35

Sustainability
Policy/Structure for
Promotion

TopicsDisclosure
Remuneration policies

External Evaluation/
International
Initiatives

API
Location or reason for omission

102-46102-47102-48102-49https://www.activiaMateriality
reit.co.jp/en/sustainability/material.html Identification
https://www.activiaMateriality
reit.co.jp/en/sustainability/material.html Identification
Nothing in particularNothing in particular

102-50

Reporting period

https://www.activiareit.co.jp/en/sustainability/gri.html

102-51

Date of most recent report

Not applicable

SocialESG Data

https://www.tokyu-trm.co.jp/en/sustainability/esg.html

Our commitment

100%

https://www.tokyu-trm.co.jp/en/sustainability/esg.html

Our commitment
Materiality (S)No key topics or concerns raised
TLC REIT Management Inc.is 100% subsidiary of Tokyu
Fudosan Holdings Corporation and subjected to consolidated
financial statements.

Entities included in the consolidated financial
Nonestatements
Defining report content and topic Boundaries
An explanation of the process for defining theareport content and the topic Boundaries.
List of material topics
A list of the material topics identified in theaprocess for defining report content.
Restatements of information
Changes in reporting

Environment

TRM
Location or reason for omission

https://www.activiaRemuneration policies for the highest governance
Articles ofreit.co.jp/file/ir_library_other_filebody and senior executives for the following types
Incorporation (in6b6b9bc49fab02aafb56fef3913196c491
of remuneration:
Japanese)
41507a.pdf
i. Fixed pay and variable pay, including
performance-based pay, equity-based pay,bonuses, and deferred or vested shares;
ii. Sign-on bonuses or recruitment incentive
payments;
iii. Termination payments;
iv. Clawbacks;
v. Retirement benefits, including the difference
between benefit schemes and contribution rates
for the highest governance body, senior
executives, and all other employees.
5. Stakeholder Engagement102-40
List of stakeholder groups
A list of stakeholder groups engaged by the
https://www.activiaa
API’s Initiatives
organization.
reit.co.jp/en/sustainability/approach.html
102-41
Collective bargaining agreements
Since the investment corporation does
not have employees due to legal
Percentage of total employees covered byarestrictions, implementations by thecollective bargaining agreements.
asset management company's
employees are applicable to this topic.
102-43
Approach to stakeholder engagement
The organization’s approach to stakeholder
engagement, including frequency of engagementby type and by stakeholder group, and an
https://www.activiaa
API’s Initiatives
indication of whether any of the engagement was reit.co.jp/en/sustainability/approach.html
undertaken specifically as part of the report
preparation process.
102-44
Key topics and concerns raised
No key topics or concerns raised
6. Reporting Practice102-45Governancehttps://www.tokyu-trm.co.jp/en/sustainability/materiality.html

Materiality

https://www.tokyu-trm.co.jp/en/sustainability/materiality.html

Materiality

Nothing in particularNothing in particular

Sustainability
information disclosure https://www.tokyu-trm.co.jp/en/sustainability/gri.html
and GRI Index

Sustainability
information
disclosure and GRI
Index

Not applicable64

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsDisclosure102-52

Reporting cycle

External Evaluation/
International
Initiatives

API
Location or reason for omission

https://www.activiareit.co.jp/en/sustainability/gri.html

102-54102-55102-56

Environment

SocialSustainability
information disclosure https://www.tokyu-trm.co.jp/en/sustainability/gri.html
and GRI Index
https://www.tokyu-trm.co.jp/en/contact/

https://www.activiaMateriality
https://www.tokyu-trm.co.jp/en/sustainability/materiality.html
reit.co.jp/en/sustainability/material.html
https://www.activia103-2
The management approach and its components reit.co.jp/en/sustainability/approach.htm API’s Initiatives
https://www.tokyu-trm.co.jp/en/sustainability/esg.html
lhttps://www.activiaOur Structure to103-3
Evaluation of the management approachhttps://www.tokyu-trm.co.jp/en/sustainability/
reit.co.jp/en/sustainability/index.html
Promote Sustainability
201: Economic Performance 2016
Financial implications and other risks and
201-2
opportunities due to climate change
Risks and opportunities posed by climate changethat have the potential to generate substantive
https://www.activiaMaterialityahttps://www.tokyu-trm.co.jp/en/sustainability/materiality.html
changes in operations, revenue, or expenditure,
reit.co.jp/en/sustainability/material.html Identification
including:
205: Anti-corruption 2016
Since the investment corporation does
not have employees due to legal
Operations assessed for risks related to205-1
restrictions, implementations by thecorruption
asset management company's
employees are applicable to this topic.
Total number and percentage of operations
１（The asset management company solely operates at theaassessed for risks related to corruption.
Head Office）, 100%

205-2

205-3

Significant risks related to corruption identified
through the risk assessment.
Communication and training about anticorruption policies and procedures

Sustainability
information
disclosure and GRI
Index
Contact Us

Sustainability reporting is prepared with reference to GRI
standards
GRI Content Index (this table)
None

GRI 200: Economic
Management Approach
Explanation of the material topic and its
103-1
Boundaryb

ESG Data

TRM
Location or reason for omission

Contact point for questions regarding thehttps://www.activia-reit.co.jp/en/contact/ Contact us
reportClaims of reporting in accordance with the GRI Sustainability reporting is prepared withStandards
reference to GRI standards
GRI content index
GRI Content Index (this table)
External assuranceNone102-53GovernanceMateriality
Our Commitment
Promotion System

Materiality

None
Since the investment corporation does
not have employees due to legal
restrictions, implementations by theasset management company's
employees are applicable to this topic.

Total number and percentage of governance bodyd members that have received training on anticorruption, broken down by region.
Total number and percentage of employees thate have received training on anti-corruption, broken
down by employee category and region.
Confirmed incidents of corruption and actions
No incidents
taken

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c4

ComplianceTraining

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c4

ComplianceTraining

No incidents

65Introduction

Sustainability
Policy/Structure for
Promotion

TopicsDisclosure
206: Anti-competitive Behavior 2016
Legal actions for anti-competitive behavior,
206-1
anti-trust, and monopoly practices

GRI 300: Environmental
Management Approach
Explanation of the material topic and its
103-1
Boundary
The management approach and its
103-2
components
103-3

Evaluation of the management approach

External Evaluation/
International
Initiatives

GovernanceAPI
Location or reason for omission
No incidents

Environment

SocialESG Data

TRM
Location or reason for omission
No incidents

https://www.activiaMateriality
https://www.tokyu-trm.co.jp/en/sustainability/materiality.html
reit.co.jp/en/sustainability/material.html
https://www.activiaAPI’s Initiatives
https://www.tokyu-trm.co.jp/en/sustainability/esg.html
reit.co.jp/en/sustainability/approach.html
https://www.activiaOur Structure tohttps://www.tokyu-trm.co.jp/en/sustainability/index.html
reit.co.jp/en/sustainability/index.html
Promote Sustainability

Materiality
Our Commitment
Promotion System

302: Energy 2016
302-1

Energy consumption within the organization

302-2

Energy consumption outside of theorganization

302-3

Energy intensity

https://www.activiaEnvironmental
reit.co.jp/en/sustainability/environment.h
Performancetml
https://www.activiaEnvironmental
reit.co.jp/en/sustainability/environment.h
Performancetml
https://www.activiaEnvironmental
reit.co.jp/en/sustainability/environment.h
Performancetml

303: Water 2018
303-3

Water withdrawal

303-5

Water consumptionaTotal water consumption from all areas inmegaliters.

https://www.activiaEnvironmental
reit.co.jp/en/sustainability/environment.h
Performancetml
https://www.activiaEnvironmental
reit.co.jp/en/sustainability/environment.h
Performancetml

305: Emissions 2016
305-1

Direct (Scope 1) GHG emissions

305-2

Energy indirect (Scope 2) GHG emissions

305-3

Other indirect (Scope 3) GHG emissions

305-4

GHG emissions intensity

https://www.activiaEnvironmental
reit.co.jp/en/sustainability/environment.h
Performancetml
https://www.activiaEnvironmental
reit.co.jp/en/sustainability/environment.h
Performancetml
https://www.activiaEnvironmental
reit.co.jp/en/sustainability/environment.h
Performancetml
https://www.activiaEnvironmental
reit.co.jp/en/sustainability/environment.h
Performancetml

66

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsDisclosure
306: Effluents and Waste 2016306-2

Waste by type and disposal method

307: Environmental Compliance 2016
Non-compliance with environmental laws and307-1
regulations

GRI 400: Social
Management Approach
Explanation of the material topic and its
103-1
Boundary

External Evaluation/
International
Initiatives

API
Location or reason for omission

Governance

Environment

SocialESG Data

TRM
Location or reason for omission

https://www.activiaEnvironmental
reit.co.jp/en/sustainability/environment.
Performancehtml
No violations during the reporting
period

No violations during the reporting period

https://www.activiaMateriality
https://www.tokyu-trm.co.jp/en/sustainability/materiality.html
reit.co.jp/en/sustainability/material.html
https://www.activia103-2
The management approach and its components reit.co.jp/en/sustainability/approach.htm API’s Initiatives
https://www.tokyu-trm.co.jp/en/sustainability/esg.html
lhttps://www.activiaOur Structure to103-3
Evaluation of the management approachhttps://www.tokyu-trm.co.jp/en/sustainability/index.html
reit.co.jp/en/sustainability/index.html
Promote Sustainability
401: Employment 2016
Since the investment corporation does
not have employees due to legal
401-1
New employee hires and employee turnoverrestrictions, implementations by theasset management company's
employees are applicable to this topic.
Total number and rate of new employee hires
a during the reporting period, by age group, gender
https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3
and region.
Total number and rate of employee turnover duringb the reporting period, by age group, gender andhttps://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3
region.
Since the investment corporation does
Benefits provided to full-time employees that not have employees due to legal
401-2
are not provided to temporary or part-time
restrictions, implementations by the
https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3
employees
asset management company's
employees are applicable to this topic.
Since the investment corporation does
not have employees due to legal
401-3
Parental leave
restrictions, implementations by the
https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3
asset management company's
employees are applicable to this topic.

Materiality
Our Commitment
Promotion System

New Hire

Turnover ratio
Employee welfare
programs(representative
examples)Status of WorkStyle Reform andDiversity Promotion

67

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsDisclosure403: Occupational Health and Safety 2018403-2

Hazard identification, risk assessment, andincident investigation

External Evaluation/
International
Initiatives

API
Location or reason for omission
Since the investment corporation does
not have employees due to legal
restrictions, implementations by theasset management company's
employees are applicable to this topic.

A description of the processes used to identify
work-related hazards and assess risks on aa routine and non-routine basis, and to apply thehierarchy of controls in order to eliminate hazards
and minimize risks, including:A description of the policies and processes forworkers to remove themselves from workc situations that they believe could cause injury or ill
health, and an explanation of how workers areprotected against reprisals.

403 -4

Worker participation, consultation, andcommunication on occupational health andsafety403-5

Worker training on occupational health andsafety403-6

Promotion of worker health403-9

Work-related injuries

403-10Work-related ill health

Governance

Environment

SocialESG Data

TRM
Location or reason for omission

https://www.tokyu-trm.co.jp/en/sustainability/esg.html

Health Committee

Implementation of health committee, feedback throughworkplace inspections by industrial doctos, confirmation ofworking hours of all officers and employees, implementationof feedback and lectures based on periodic stress checks,
etc.
Lectures by industrial doctors, individual interviews withindustrial doctors, and feedback to superiors
Since the investment corporation does
not have employees due to legal
restrictions, implementations by theasset management company's
employees are applicable to this topic.
Since the investment corporation does
not have employees due to legal
restrictions, implementations by theasset management company's
employees are applicable to this topic.
Since the investment corporation does
not have employees due to legal
restrictions, implementations by theasset management company's
employees are applicable to this topic.
Since the investment corporation does
not have employees due to legal
restrictions, implementations by theasset management company's
employees are applicable to this topic.
Since the investment corporation does
not have employees due to legal
restrictions, implementations by theasset management company's
employees are applicable to this topic.

Employees also take part in the health committee disclosed
below.
https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

Health Committee

Carring out lectures by industrial doctors and planned classes Various employee
related to harassment.
training programs
https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3
Health Committee

Carrying out stress checks and regular health checks.
https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

Our Commitment
Status of WorkStyle Reform andDiversity Promotion

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

Status of WorkStyle Reform andDiversity Promotion

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

Status of WorkStyle Reform andDiversity Promotion

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

Various employee
training programs(examples ofrepresentative
cases)

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

Employee
Development

404: Training and Education 2016

404-1

Average hours of training per year per
employee

404-2

Programs for upgrading employee skills andtransition assistance programs

Since the investment corporation does
not have employees due to legal
restrictions, implementations by theasset management company's
employees are applicable to this topic.
Since the investment corporation does
not have employees due to legal
restrictions, implementations by theasset management company's
employees are applicable to this topic.

68

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsDisclosure

External Evaluation/
International
Initiatives

API
Location or reason for omission

Environment

SocialBoth contracted employees and regular employees receive
performance and career development reviews in the samestructure, and aim to set the goals and communicate withsuperiors.
https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

Percentage of total employees by gender and by
employee category who received a regularperformance and career development review
during the reporting period.
405: Diversity and Equal Opportunity 2016405-1
Diversity of governance bodies and employeesaPerformance
Evaluation Process

100%

Percentage of individuals within the organization’s
https://www.activiaa governance bodies in each of the following
reit.co.jp/en/about/management.html
diversity categories:

Management

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

https://www.activiareit.co.jp/en/about/management.html

Management

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

ii. Age group: under 30 years old, 30-50 years old, https://www.activiaover 50 years old;
reit.co.jp/en/about/management.html

Management

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

i. Gender;

ESG Data

TRM
Location or reason for omission

Since the investment corporation does
not have employees due to legal
Percentage of employees receiving regular
restrictions, implementations by theperformance and career development reviews
asset management company's
employees are applicable to this topic.

404-3

Governance

Key Employee Data
Status of WorkStyle Reform andDiversity Promotion
Key Employee Data
Status of WorkStyle Reform andDiversity Promotion
Key Employee Data
Status of WorkStyle Reform andDiversity Promotion

Since the investment corporation does
not have employees due to legal
Percentage of employees per employee categorybrestrictions, implementations by thein each of the following diversity categories:
asset management company's
employees are applicable to this topic.

i. Gender;

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

ii. Age group: under 30 years old, 30-50 years old,
over 50 years old;

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

iii. Other indicators of diversity where relevant(such as minority or vulnerable groups).

https://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3

Ratio of basic salary and remuneration of
women to men
406: Non-Discrimination 2016
Incidents of discrimination and corrective
406-1
actions taken
405-2

There is no gender difference for each
employee category.

There is no gender difference for each employee category.

No incidents during the reporting period

No incidents during the reporting period

Key Employee Data
Status of WorkStyle Reform andDiversity Promotion
Key Employee Data
Status of WorkStyle Reform andDiversity Promotion
Key Employee Data
Status of WorkStyle Reform andDiversity Promotion

69

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsDisclosure
411: Rights of Indigenous Peoples 2016
Incidents of violations involving rights of
411-1
indigenous peoples
413： Local Communities 2016413-1

Operations with local community
engagement, impact assessments, anddevelopment programs

External Evaluation/
International
Initiatives

API
Location or reason for omission

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

No incidents during the reporting period

https://www.activiareit.co.jp/en/sustainability/approach.h API’s Initiatives
tml

https://www.tokyu-trm.co.jp/en/sustainability/esg.html

https://www.activiareit.co.jp/en/sustainability/social.html

https://www.activiareit.co.jp/en/sustainability/material.html
https://www.activiareit.co.jp/en/sustainability/approach.html

https://www.activiareit.co.jp/en/sustainability/index.html

SocialESG Data

TRM
Location or reason for omission

Contribution to thehttps://www.tokyu-trm.co.jp/en/sustainability/esg.html#c3
Local Communities

Our Commitment

Contribution to theregionNo political contributions provided

TenantEngagement419: Socioeconomic Compliance 2016
Non-compliance with laws and regulations in
419-1
No violations during the reporting period
the social and economic area

GRI G4: Construction and Real Estate Sector Disclosures
Management Approach
Explanation of the material topic and its
103-1
Boundary
The management approach and its
103-2
components

Environment

No incidents during the reporting period

Note: We report information on our properties in https://www.activiaconsideration of the purpose of this standard.
reit.co.jp/en/sustainability/social.html
414： Supplier Social Assessment 2016
New suppliers that were screened using
No suppliers were screened during the414-1
social criteria
reporting period
Negative social impacts in the supply chain No suppliers were screened during the414-2
and actions takenreporting period
415: Public Policy
2016
415-1
Political contributions
No political contributions provided
416：Customer Health and Safety 2016
416-1

GovernanceNo violations during the reporting period

Materiality

https://www.tokyu-trm.co.jp/en/sustainability/materiality.html Materiality

API’s Initiatives

https://www.tokyu-trm.co.jp/en/sustainability/esg.html

Our Commitment

Our Structure to
PromoteSustainability

https://www.tokyu-trm.co.jp/en/sustainability/index.html

Promotion System

103-3

Evaluation of the management approach

CRE8

Type and number of sustainability
https://www.activiacertification, rating and labeling schemes forEnvironmental
reit.co.jp/en/sustainability/environment.htm
new construction, management, occupation
Certificationland redevelopment

CRE

70

Introduction

Sustainability
Policy/Structure for
Promotion

TopicsExternal Evaluation/
International
Initiatives

Governance

Environment

SocialESG Data

Independent Assurance Statement71