Securities Code：8987

ESG Report(June 2024 Revision)

Published November 2020
Revised December 2021
Revised June 2022
Revised December 2022
Revised June 2023
Revised December 2023
Revised June 2024

■ List of Past Year’s Initiatives and Results
PolicyComment

1. Established an EMS operation manual(March 2024)◇Built an environmental management system (EMS)
to promote energy saving, CO2 emissions reduction,and effective use of resources

2. Established a new environmental KPI(October 2023)◇ Maintain the ratio of green building certified
properties at 90% or more (floor area basis)

3. Examinations for acquiring SBT
certification◇ Established science-based CO2 emission
reduction targets consistent with the levels
prescribed in the Paris Agreement andexaminations for acquiring SBT certification

TCFD
Comment

4. Regular reviewed of climate change risks
and opportunities (October 2023)

Property◇ Regular review of the current manifestation ofidentified risks and opportunities and any change
in the external environment

Comment

5. Reduced CO2 Emissions by Switching
Power(July 2023-June 2024)◇Switched to CO2-free electricity at 22 properties intotal or 73.1% of the portfolio (by floor area)

6. Obtained More Green Building
Certifications(July 2023-June 2024)◇Obtained certification at three more properties◇Obtained certification at a total of 25 properties or
84.6% of the portfolio (by floor area)

7. Newly obtained BELS certification(July 2023-June 2024)◇Obtained certification at one more property◇Obtained certification at a total of four properties or
16.1% of the portfolio (by floor area)1

■ List of Past Year’s Initiatives and Results

Finance
Comment

8. Obtained a Green Loan (December 2023)◇ Obtained a Green Loan (¥3bn) in accordance with
the Green Finance Framework

9. Issued No. 3 Green Bonds(February 2024)◇Issued Green Bonds (¥2bn) in accordance with theGreen Bond Framework◇Top-classsustainable finance* ratio (23.3% as of※サステナビリティファイナンスおよびグリーンファイナンスの総称です。
June 30, 2024) among office REITs*Refers to both sustainability finance and green finance.

SocialComment

10. Donated emergency food stocks to foodbanks (December 2023)◇ Donation of emergency rations to NPOs

External Evaluation
11. Ranked first in the Japan Listed Office category (two consecutive year) andobtained a Green Star (9th consecutive year) and Full 5 Stars (4th consecutiveyear) in 2023 GRESB Real Estate Assessments (October 2023)

2

■ Past Year’s Initiatives and Results (1)Policy1. Established an EMS operation manual (March 2024)◆ Set environmental targets related to energy, CO2 emissions, and water, comprehend actual
results, compare the actual results with the forecast, implement countermeasures, and make
improvements (PDCA cycle) based on the EMS operation manual to continue reducing ourenvironmental footprints

2. Established a new environmental KPI (October 2023)◆ Set the green building certification ratio of the properties we own (based on total floor area)
as a new environmental KPI; kept working on environmental certification acquisition andmaintained the green building certification ratio at 90% or more.

3. Examinations to acquire SBT certification◆ Set science-based CO2 emission reduction targets consistent with the levels prescribedunder the Paris Agreement and examined ways to obtain SBT certification, which is aninternational climate change initiative.

TCFD
4. Regular reviewed of climate change risks and opportunities (October 2023)◆ Regular reviewed of the current manifestation of risks and opportunities identified in aqualitative scenario analysis and the presence of any change to the external environment.
Through prompt detection of changes in the external environment, we intend to appropriately
examine and prioritize new measures.

3

■ Past Year’s Initiatives and Results (2)Property
5. Reduced CO2 Emissions by Switching Power (July 2023-June 2024)◆ Musashikosugi Tower Place switched to CO2 emission-free electricity during the period.
A total of 22 properties or 73.1% of the portfolio (by floor area) currently produce noCO2 emissions from the electricity they use.
Switch Date
Property NamePower Type(YYYY/MM)

Shiba 2-Chome Building

CO2-free power

2021/07

Daiwa Minami-morimachi Building

CO2-free power

2021/08

JEI Hiroshima Hacchobori Building

CO2-free power

2021/09

Aoba-dori Plaza

CO2-free power

2022/03

Omori Bellport D“RE100” power

2022/03

JEI Naha Building“RE100” power

2022/04

NHK Nagoya Housou-Center Building“RE100” power

2022/04

AKASAKA INTERCITY AIR“RE100” power

2022/04

AKASAKA INTERCITY“RE100” power

2022/04

Mansard Daikanyama“RE100” power

2022/04

Kowa Nishi-Shimbashi Building“RE100” power

2022/04

Kowa Kawasaki Higashiguchi Building“RE100” power

2022/04

JEI Hongo Building“RE100” power

2022/04

HAMARIKYU INTERCITY“RE100” power

2022/05

Core City Tachikawa“RE100” power

2022/05

Kawasaki Nisshincho Building“RE100” power

2022/05“RE100” power

2022/09“RE100” power

2022/09

BIZCORE JIMBOCHO“RE100” power

2022/09

Daiba Garden City Building“RE100” power

2023/10

Musashikosugi Tower Place“RE100” power

2024/04

Practically renew able energy

2024/05

GRAND FRONT OSAKA(Umekita Square / South Building)
GRAND FRONT OSAKA(North Building)

SE Sapporo Building

Through this initiative,
we are contributing to Goal 7 (Affordable and Clean Energy) and
Goal 13 (Climate Action) of the SDGs.

6. Obtained More Green Building Certifications (July 2023-June 2024)◆ Three more properties obtained Green Building Certification during the period.
As a result, the percentage of certified properties (by floor area) stood at 84.6% of the portfolio, orbased on the number of properties, at 71.4% (25 properties) as of June 30, 2024.
<The property that obtained certification>
・JEI Hiroshima Hacchobori Building:・AKASAKA INTERCITY AIR・Hiroshima Dai-ichi Seimei OS Building:

CASBEE (S rank)
CASBEE (S rank)
CASBEE (A rank)

84.6%
Percentage certified(floor area basis)4

■ Past Year’s Initiatives and Results (3)Property
7. Newly Obtained BELS Certification (July 2023-June 2024)◆ BIZCORE SHIBUYA obtained BELS Certification during the period.
As a result, a total of four properties, or 16.1% of the portfolio (by floor area), had obtained
BELS Certification as of June 30, 2024.
<Certified properties>- Nisseki Yokohama Building★★
- BIZCORE AKASAKA-MITSUKE ★★★
- BIZCORE SHIBUYA★★★
- BIZCORE JIMBOCHO★★★★

Finance
8. Obtained a Green Loan (December 2023)◆ Obtained a Green Loan (¥3bn) in accordance with the Green Finance Framework

9. Issued No. 3 Green Bonds (February 2024)◆ Issued Green Bonds (¥2bn) in accordance with the Green Bond Framework◆ Top-class sustainable finance ratio (23.3% as of June 30, 2024) among office REITs

Social10. Donated Emergency Rations to Food Bank (December 2023)◆ We donated emergency rations to NPO Mottainai Japan that provides food and everyday items
to people in need, children’s homes, and welfare facilities such as those supporting
mothers/children and people with disabilities.

5■ Past Year’s Initiatives and Results (4)External Evaluation
11. Ranked first in the Japan Listed Office category (2ndconsecutive year) and obtained a Green Star (9thconsecutive year) and 5 Stars (the highest rank; 4thconsecutive year) in 2023 GRESB Real Estate
Assessment (October 2023)◆ In the 2023 GRESB Real Estate Assessment, we acquired a Green Star,
the highest rating for the nineth consecutive year, and 5 Stars for the fourthconsecutive year in the GRESB Rating evaluated using quintiles based on
overall score relative to other participants.
Furthermore, we ranked first in the Japan Listed Office category for two years
in a row.

6

Contents
I.

About JEI
1. Overview of JEI
2. JEAM Overview and Organization Chart
3. Key Features of JEI

8
9
10
11

II.

Sustainability Policy and Promotion Structure
1. CEO’s Message
2. Sustainability Policy and Promotion Structure

12
13
14

III.

Environmental Initiatives
1. Environmental Initiatives
2. Initiatives to Address Climate Change
3. Sustainability Certifications, Etc.

22
23
33
38

IV.

Social Initiatives
1. Initiatives for Tenants
2. Safety and Security Initiatives
3. Initiatives for the Local Community
4. Initiatives for Employees

42
43
45
46
47

V.

Corporate Governance Initiatives
1. JEI’s Corporate Governance
2. JEAM’s Corporate Governance3. Risk Management
4. Information Security

53
54
56
62
62

VI.

Initiatives for Unitholders and Investors
1. Policy for Customer-Oriented Business Conduct
2. Information Disclosure Policy
3. Status of IR-Related Activities

63
64
66
66

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About JEII. About JEI
1. Overview of JEIJapan Excellent, Inc. (JEI) was established on February 20, 2006, under the Act on Investment Trusts
and Investment Corporations (Act No. 198 of 1951 and subsequent amendments, hereinafter referred
to as the “Investment Trust Act”). Registration with the Kanto Local Finance Bureau was completed on
March 15, 2006 (registration number: Kanto Local Finance Bureau No. 52), followed by listing on the JREIT section of the Tokyo Stock Exchange on June 27, 2006 (securities code: 8987).
Since being listed, JEI has mainly pursued office building investment and management with the aim of
ensuring stable growth and revenue in the medium to long term.
JEI aims to maximize unitholder value by leveraging the combined strengths of its sponsor companies
with expertise in real estate and sponsor companies with expertise in finance while pursuing stability
and revenue expansion.
JEI entrusts its asset management activities to Japan Excellent Asset Management Co., Ltd. (JEAM).

92. JEAM
Overview and Organization Chart
Ⅰ
ジャパンエクセレント投資法人について
JEAM was established in April 2005 to handle management of JEI’s assets.
Name

Japan Excellent Asset Management Co., Ltd.

Headquarters

3F, 45th Kowa Building, 1-15-9 Minami Aoyama, Minato-ku, Tokyo, Japan

Established

April 14, 2005

Capital

450 million yen

Shareholders

Nippon Steel Kowa Real Estate Co., Ltd.
The Dai-ichi Life Insurance Company, Limited
The Dai-Ichi Building Co., Ltd.
Sohgo Housing Co., Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.

Business

Financial instrument business

Registration
Number

No. 331, Director-general of the Kanto Local Finance Bureau (FIBO)
Member of The Investment Trusts Association Japan

Directors

President & CEO
Director
Director
Auditor (part-time)

Shuichiro Kayama
Kenji Fujiwara
Kazuhiro Ono
Masakatsu Sakamoto

Organization Chart

10

54%
26%
5%
5%
5%
5%

Ⅰ
ジャパンエクセレント投資法人について
3. KeyFeatures of JEI
The key features of JEI, whose mission is to be a high-quality Tokyo-area office REIT
that maintains growth, are as follows.
◼ Continuously acquired large-scale properties in central Tokyo with high specifications
mainly by utilizing the sponsor pipeline• Percentage of properties acquired from the sponsor in the portfolio: 80.5 %(end of Dec. 2023, based on acquisition price)◼

Maintained a high occupancy rate by also gaining ample sponsor support on property operation andmanagement, and stably increased revenue• Occupancy rate at end of Dec. 2023: 97.9% (average occupancy rate in the past 5 years: 96.3 %)• Rental revenue for fiscal period ended Dec. 2023: 9,300 million yen◼ Established a solid financial base supported by a megabank sponsor• Ratings: AA- (JCR)• Average remaining period of interest-bearing debt: 4.1 years (end of Dec. 2023)

43.6% (end of Dec. 2023)• LTV:

Japan Excellent, Inc.
Japan Excellent Asset Management Co., Ltd.

Continuous expansion of
the asset size through theprovision of property
acquisition opportunities

Enhancement of profitability and property
competitiveness with strong property
management and leasing capabilities

Steady, agile fundraisingCore Sponsors
The Dai-ichi Life Insurance Company,
Limited.

Nippon Steel Kowa Real Estate Co., Ltd.
Investment ratio: 54%

Mizuho Bank, Ltd.

Mizuho Trust & Banking Co., Ltd.

Investment ratio: 26%

The Dai-Ichi Building Co., Ltd.

Sohgo Housing Co., Ltd.

* The investment ratio by each core sponsor shown above is the investment ratio in Japan Excellent Asset Management Co., Ltd,

which is the Asset Management Company.

11

Sustainability Policy
andPromotion StructureII. Sustainability Policy and Promotion Structure
1. CEO’s Message
In recent times, a growing number of investors have been factoring medium- and long-termsustainability into their investment decisions, with a focus on companies’ policies relating to theenvironment (E), society (S), and governance (G).
Furthermore, there is a global push for corporations to contribute to addressing social andenvironmental issues such as climate change and play their part in realizing a sustainable society.
With the aim of contributing to the realization of a sustainable society as part of their corporatesocial responsibilities, JEI and JEAM recognize reducing the environmental impact associated withthe real estate investment and management business, collaborating and partnering with various
stakeholders as an active member of society, and working to strengthen corporate governance as
high-priority management issues.
We also recognize that ESG-oriented efforts are indispensable to improving JEI’s medium- to longterm growth and unitholder value, and our policy is to proactively work to further enhance them.
To date, JEI and JEAM have implemented various ESG-oriented initiatives since we formulated our
Sustainability Policy in 2015.
We recently prepared this revised report, the sixth revision, in the hope that it will help our
stakeholders better understand the initiatives, policies, etc. that JEI and JEAM have implemented
and adopted to date.
Going forward, we will strive to promote ESG-related initiatives in our real estate investment andmanagement business and, together with our stakeholders, continue striving to realize a sustainable
society and improve unitholder value.

Executive Director, JEI
President & CEO, JEAM

Shuichiro Kayama

13Ⅰ
ジャパンエクセレント投資法人について
2. Sustainability
Policy and Promotion Structure(1) Sustainability Policy
Recognizing the importance of environment, society, and governance (ESG) considerations in
the real estate investment and management business, JEI and JEAM will aim to realize asustainable society as part of their social responsibilities and strive to reduce their environmental
impact while collaborating and partnering with stakeholders.

① Reducing Environmental Burden(1) Energy-Saving and CO2 Emission Reduction
JEI will contribute to energy-saving and CO2 emission reduction by improving operations inorder to increase energy efficiency and promoting measures such as the introduction ofenergy-saving equipment at the properties it manages.
(2) Effective Use of Resources
JEI will strive to contribute to the realization of a recycling-oriented society through waterconservation initiatives and promoting the 3Rs (reduce, reuse, recycle) in order to minimize
waste.

② Collaboration/Partnership with Stakeholders(1) Employee Education and Awareness
JEI will work to develop eco-conscious employees by implementing education andawareness activities such as ESG training, for the purpose of promoting sustainability-related
initiatives.
(2) Collaborating with External Parties
JEI will work to promote interaction with the local community while striving to reduce its
environmental impact by collaborating with tenants, property management companies, etc.
(3) Information Disclosure
JEI will proactively disclose its sustainability policies and the status of related initiatives tounitholders, tenants, customers, and other relevant parties.

14

(2) Sustainability Promotion Structure
In order to promote sustainability initiatives at the organizational level, JEAM has established a
Sustainability Committee whose key members include the president and division managers. The
committee sets targets and has developed an internal structure to regularly monitor the progress of
initiatives.

Sustainability Committee: A committee body based on sustainability rules
Purpose:Deliberation and decision on matters related to sustainability
goals and specific measures to achieve the goals

Members:

President, division managers, Compliance Officer, department
heads of Real Estate Investment, Real Estate Management,
Real Estate Engineering, Corporate Planning, Finance andAccounting, Business Planning

Frequency:

Once every three months in principle

Chair/Decisionmaker: President
Decisions:

1. Sustainability goals
2. Measures to achieve sustainability policy
3. Overall action plan for sustainability
4. Other important matters regarding sustainability efforts

Establishment of Sustainability Promotion Office
JEAM established a Sustainability Promotion Office in April 2022 as a body independent frommanagement in order to further promote initiatives to address climate change and for othersustainability issues.
The Sustainability Promotion Office will lead the drafting of plans for the sustainable growth of
JEI and company-wide cross-sectional management of sustainability activities, thereby further
strengthening initiatives.

15

(3) Establishment of an EMS Operation Manual
In its sustainability policy stipulated in its sustainability rules, JEAM identifies
energy saving, CO2 emissions reduction, and effective use of resources asimportant environmental challenges and expresses its commitment to workon these challenges. Furthermore, JEAM’s Sustainability Committee chairedby the President determines concrete measures to reduce ourenvironmental footprints.
The environmental management system (EMS) operation manual provides
the details to implement these policy and measures to help build, operate,
and maintain an environmental management system based on a PDCA
cycle through the Sustainability Committee. The manual follows therequirements presented in the EcoAction 21 Guidelines.

16

(4) Principles for Responsible Investment (PRI)The Principles for Responsible Investment (PRI) refers both to six principles (see below for asummary of these) and an international network of investors devoted to their realization. They
are being promoted by the United Nations Environment Programme Finance Initiative (UNEP FI)
and the United Nations Global Compact (UNGC).
PRI advocates the incorporation of ESG perspectives into investment decision-making
processes with the aim of improving beneficiaries’ long-term investment performance andfulfilling fiduciary responsibilities more effectively than before.
JEAM endorses the basic philosophy of PRI, and in July 2020, it was recognized as a signatoryorganization.

<Summary of the Principles for Responsible Investment (PRI)>

1. We will incorporate ESG issues into investment analysis and decision-making processes.
2. We will be active owners and incorporate ESG issues into our ownership policies 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 the investment industry.
5. We will work together to enhance our effectiveness in implementing the Principles.
6. We will each report on our activities and progress towards implementing the Principles.

2022 Annual PRI Evaluation
Area

Evaluation★★★★
(4 stars)

Policy, Governance and Strategy★★★★★
(Highest rank)

Real Estate★★★
(3 stars)

Confidence building measures17

(5) Support for TCFD
JEAM supported the Financial Stability Board’s (FSB) Task Force on Climate-related
Financial Disclosures (TCFD), established to examine how to handle climate-related
information disclosure and financial institutions, in June 2021 and joined the TCFD
Consortium, a domestic organization of endorsing companies.

(6) Principles for Financial Action for the 21st Century Signature
JEAM signed the Ministry of the Environment’s Principles for Financial Action for the 21stCentury, formulated in October 2011 as guidelines for financial institutions that want tofulfill their responsibilities and role in forming a sustainable society, in June 2021.

Seven Principles:【Principle 1】 Basic posture
Recognizing the responsibilities and roles that financial institutions themselves play for the formation ofa sustainable society, we aim to create positive impacts on the environment, society and economy, andmitigate negative impacts. Take the initiative in practicing these efforts.
【Principle 2】 Contribution to a sustainable global society
We will lead the formation of a sustainable global society by developing and providing financial
products and services that contribute to the creation and development of industries and businesses
through innovation, toward steady and fair transitions in society.
【Principle 3】 Contribution to the formation of sustainable communities
We will support the solution of environmental, social and economic issues based on regional
characteristics, and lead the formation of sustainable local communities through the improvement ofregional inclusiveness and resilience.
【Principle 4】 Human resource development
Recognize the importance of human capital in financial institutions, and develop human resources who
can think for themselves and take action on environmental and social issues.
【Principle 5】 Collaboration with various stakeholders
Recognizing the importance of cooperation among various stakeholders, including financial institutions,in order to form a sustainable society, we not only participate in such efforts but also play an active role.
【Principle 6】 Building a sustainable supply chain
Actively tackle environmental issues such as global warming and biodiversity and social issues suchas human rights, and build a sustainable supply chain through constructive engagement with business
partners including investment and loan partners.
【Principle 7】 Information disclosure
Recognizing that activities to enhance the sustainability of society are management issues, we will
disclose our efforts to a wide range of stakeholders and make constant improvements based on
domestic and international trends and disclosure frameworks.
18

(7) Contributing to SDGs
Based on the Sustainability Policy, JEI and JEAM determined materiality (material
issues) in October 2020 in order to achieve a sustainable society as our corporatesocial responsibility, recognizing the importance of consideration for the environment,
society, and governance (ESG) and have thereafter updated it annually.
In accordance with our current initiatives such as climate change actions, we partiallyrevised our materiality in March 2024.
■ Key issues (materiality) newly identified and main changes
1. E (Environment) Added maintaining the ratio of properties that have obtained
environmental certification at 90% or more of the portfolio to theinitiatives under the “Acquisition of environmental certification”(Red text: Added portion in March 2024)
Area

Materiality

Initiatives

Promotion of measures against
climate change through reduction ofenvironmental burden, etc., andinformation disclosure in line with
TCFD Recommendations

・Establishment of FY2050 net zero
emissions target and FY2030 CO2emissions (intensity) reduction target
and implementation of reduction
initiatives.
・Identification of climate-related risks
and opportunities andconsideration/implementation ofcountermeasures.
・Expansion of information disclosure inline with TCFD Recommendations.
・Curb water consumption and wastematerials.

Acquisition of environmental
certification

・Maintain the ratio of properties thathave obtained environmental
certification at 90% or more (by floorarea) of the portfolio

Collaboration with tenants concerning
environmental considerations

・Increase the number of green lease
contracts.

Promotion of funds procurement
through sustainability finance(including green finance)

・Active utilization of sustainability
finance at the time of new borrowing
and refinancing.

Employee job satisfaction /enhancement of wellness, skill
development

・Conduct employee satisfaction surveys,
and discuss/implement measures toimprove satisfaction.
・Conduct training by job class.
・Set up an opinion box for employees
as well as an anonymous consultationdesk.
・Practicing human rights policy at JEAM

Enhancement of tenant satisfaction

・Conduct tenant satisfaction surveys,
and discuss/implement measures toimprove satisfaction.

Contribution to local communities

・Own buildings that contribute to solving
issues in local communities(Ex. Disaster-prevention, medical care,childcare support, etc.)

Solid governance system

・Decide on sustainability (ESG)-related
measures at in-house meetings andfollow up initiatives

Strengthening of information
disclosure for investors

・Further strengthen information
disclosure through preparation of ESG
reports, etc.
・Improve external evaluation.

E(Environment)

S(Society)G(Governance)

19

Related SDGs

Materiality Risks and Opportunities
Area

Materiality

Risks

Opportunities

Promotion of measuresagainst climate change
through reduction ofenvironmental burden, etc.,
and information disclosurein line with TCFD
Recommendations• Personal/material damage, etc.
due to increase in occurrenceof abnormal weather brought
about by global warming.
• Relative deterioration of
performance of owned
properties in line withreinforcement of policies, laws
and regulations, andadvancement of energy-saving
technology, etc.
• Decrease in evaluation fromtenants and investors who areenvironmentally conscious.

• Reduction of operating costthrough enhancement ofenvironmental performance ofowned properties, andimprovement of evaluation fromtenants and investors who areenvironmentally conscious.

Acquisition ofenvironmental certification• Lowering of evaluation fromtenants and investors who
include environmental
certification in their evaluation
criteria.

• Increase in tenant demand due
to enhancement ofenvironmental performance ofowned properties.
• Expansion of the investor base.

Collaboration with tenants
concerning environmental
considerations• Decrease in tenant satisfaction.
• Increase in energy-related
expenses.

• Improvement in evaluationfrom tenants.
• Reduction of energy-related
expenses.

Promotion of funds
procurement throughsustainability finance(including green finance)• Decrease in funding source.
• Increase in funding costs.

• Expansion of funding sourceand diversification of funding
methods.
• Reduction of funding costs.

Employee job satisfaction/enhancement of wellness,skill development• Decrease in managementcompetence due to decrease in
the quality of employees.
• Outflow of talent.

• Improvement in managementcompetence throughimprovement in employee skills.
• Stabilization of businessthrough securement of talent.

Enhancement of tenantsatisfaction• Tenant move-outs due tolowered satisfaction, anddecrease in rent revenue.

• Increase in rent revenue by
reducing tenant move-outs.

Contribution to local
communities• Decrease in credibility due todeterioration of relationshipwith the community• Strengthening ofcompetitiveness of properties
through enhancement of valueof a community.

Solid governance system• Decrease in evaluation andcredibility from investors.

• Improvement in evaluation andcredibility from investors forsound management system.

• Decrease in evaluation frominvestors who emphasize
sustainability (ESG).

• Improvement in evaluation frominvestors through a wide range
of initiatives and enhancementof recognition and external
evaluation.
• Expansion of the investor base.

E(Environment)

S(Society)G(Governance)
Strengthening of
information disclosure forinvestors

20

(8) Stakeholder Engagement
JEI and JEAM are pursuing the following initiatives that focus on engagement with stakeholders.

Stakeholders

Approach to Engagement

Engagement Methods• Tenant satisfaction survey

Tenants

Working with tenants to improve theirsatisfaction, prevent disasters, andreduce environmental burden.

• Implementation of disaster contingency
measures• Promotion of green leases• Holding periodic concerts and providing
spaces for various events in officebuilding common areas

Local community

Promoting interaction with the communityand supporting communities from a social
perspective with measures such as
disaster contingency planning and theestablishment of daycare facilities.

• Providing venues for neighborhood
association disaster-preparation drills• Maintaining stores of water, food, andportable toilets• Implementation of preparations toaccommodate stranded commuters in
the event of a disaster• Establishment of daycare facilities• Supporting acquisition of professional
certifications

Employees

Recognizing people as our mostimportant management resource andworking to recruit top talent, provide
training, and create a rewarding work
environment where a wide range of
personnel can thrive.

• Training programs• Hosting various seminars, etc., run byexternal organizations• Transparent personnel evaluation
system based on regular performanceappraisals and feedback• Employee satisfaction survey (annual)

Unitholders/investors

Customers (PMs, etc.)

In addition to statutory disclosure, striving
to disclose accurate, unbiased information
to investors in a timely, easy tounderstand manner, with a view toensuring transparency, as well as
voluntarily disclosing information deemed
important and useful to investors
whenever possible.
Working to strengthen relations withcustomers and instill sustainability
awareness.

21• Unitholders’ meetings• Results briefings• IR meetings (domestic and overseas)• Participation in IR events for private
investors• Regular sharing of information• Implementation of sustainability training
for customers

E
Environmental Initiatives

Ⅲ．環境への取組
III.
Environmental Initiatives
1. Environmental Initiatives
JEI and JEAM believe that seizing the opportunities and possibilities offered by buildings equippedwith green building capabilities, such as energy/water efficiency and reduced waste generation, will
improve the investment corporation’s profits over the medium to long term. We are pursuing thefollowing initiatives for the purpose of improving the environmental performance of our portfolio.

(1) Climate Change Policy
JEAM has enacted a Climate Change Policy as its basic policy for dealing with climate changerelated risks and opportunities as well as business and strategy resilience.

(2) Environmental KPIs
JEI has set reduction targets for CO2 emissions intensity, energy consumption intensity, water
consumption intensity, and green building certification ratio.
CO2 emissions intensity
Energy consumption intensity
Water consumption intensity
Green building certification ratio• 46% reduction in intensity by FY2030 compared with FY2013• Net zero emissions by FY2050
1% reduction per year, 5% reduction from the average of FY2020 toFY2024 compared with FY2015 to FY2019 as mid to long term
perspective.
Maintain 90% or more (floor area basis)(3) Energy-Efficiency Renovations
JEI aims to improve the energy efficiency of equipment for lighting, heating, air-conditioning, etc.,
when upgrading them.
• We are steadily replacing or upgrading lighting in common areas (corridors, stairwells, parking lots,etc.), leased rooms, and emergency lighting systems such as emergency lights and guide lights
with LED lighting.
• We are upgrading facilities such as heating and air-conditioning equipment to high-efficiency
energy-saving equipment.
As of the end of June 2024

Proportion of Common Area
Lighting Converted to LED

97.1% (based on number of properties) *Including properties partially converted(4) Initiatives to Save Energy Based on Improved Operating Methods
As part of its efforts to save energy, JEI is pursuing initiatives based on improved operating methods
for air-conditioning, lighting, and other systems.
• Air-conditioning: We are aiming to reduce the air-conditioning load by restricting the introduction of
external air during pre-heating and pre-cooling.
• Outdoor lighting, etc.: We are aiming to optimize management of outdoor lighting, etc., by setting
and adjusting the time period when lights are in use according to the season, using automatic
lighting management.
23

(5) Reduction in CO2 Emissions by Switching PowerJEI is working to reduce CO2 emissions by switching power usage at its properties.
As of the end of June 2024, we had switched power at 22 properties , and we willcontinue to reduce CO2 emissions by switching power sources going forward.
AcquisitionPrice(million yen)

Property Name

Leasable Floor
Area

Power Type

Switch Date(YYYY/MM)(m2)

Shiba 2-Chome Building

9,450

11,749.30

CO2-free power

2021/07

Daiwa Minami-morimachi Building

4,410

6,633.93

CO2-free power

2021/08

JEI Hiroshima Hacchobori Building

2,760

6,639.38

CO2-free power

2021/09

Aoba-dori Plaza

2,120

6,265.22

CO2-free power

2022/03

Omori Bellport D

22,55225,828.29“RE100” power

2022/03

JEI Naha Building

1,380

3,220.59“RE100” power

2022/04

NHK Nagoya Housou-Center Building

5,610

11,768.25“RE100” power

2022/04

AKASAKA INTERCITY AIR

6,590

2,580.24“RE100” power

2022/04

AKASAKA INTERCITY

28,146

11,021.03“RE100” power

2022/04

Mansard Daikanyama

11,4205,420.80“RE100” power

2022/04

Kowa Nishi-Shimbashi Building

11,431

8,949.04“RE100” power

2022/04

Kowa Kawasaki Higashiguchi Building

10,976

18,612.72“RE100” power

2022/04

JEI Hongo Building

5,400

4,078.37“RE100” power

2022/04

HAMARIKYU INTERCITY

19,08019,718.11“RE100” power

2022/05

Core City Tachikawa

6,500

9,230.09“RE100” power

2022/05

Kawasaki Nisshincho Building

4,725

10,516.72“RE100” power

2022/05

GRAND FRONT OSAKA(Umekita Square / South Building)

9,518

5,084.45“RE100” power

2022/09

GRAND FRONT OSAKA(North Building)

7,632

8,001.51“RE100” power

2022/09

BIZCORE JIMBOCHO

10,2005,261.75“RE100” power

2022/09

Daiba Garden City Building

11,00012,122.85“RE100” power

2022/10

Musashikosugi Tower Place

13,89024,928.37“RE100” power

2024/04

SE Sapporo Building

5,500

13,384.95 Practically renew able energy

Portfolio total

210,291

231,015.96

Area
By floor area

73.1%

－

2024/05－

No. of properties
231,000 m2

By number ofproperties

64.7%

22

* The coverage ratio is the ratio with respect to the total number of properties or leasable floor area owned by JEI (not including land leaseholds).
* The leasable floor area for joint ownership properties is calculated by multiplying the total leasable floor area for the property by JEI’s co-ownershipinterest.

24

(6) Environmental Performance■ Environmental Performance Data
FY 2020

FY 2021

FY 2022

FY 2023

Total

(MWh)

65,751

63,23960,84559,986

Intensity(kWh/㎡)

200.1

197.1

196.8

193.7

Total

(MWh)

20,03823,312

18,632

16,546

Intensity(kWh/㎡)

61.0

72.6

60.2

53.4

Total

(MWh)

23,50323,98324,13125,815Intensity(kWh/㎡)

71.5

74.7

78.0

83.3

Total

(MWh)

109,293

110,536

103,609102,347

Intensity(kWh/㎡)

332.7

344.6

335.2

330.5

Scope1(t-CO2)

3,577

4,164

2,934

2,349

Scope2(t-CO2)33,222

26,323

7,541

8,286

Scope3(t-CO2)

－

―

4,507

6,290

Total

(t-CO2)

36,79930,487

14,983

16,925Intensity(t-CO2/㎡)

0.11

0.09

0.04

0.05

Total

(1,000㎥)

289

267

281

305

(㎥/㎡)

0.88

0.83

0.90

0.98

(t)

3,411

3,063

3,159

1,920

Electricity

Fuels

District
Heating&cooling

Total Energy Consumption

GHG emissions

Water use
Intensity
WastesTotal* As a general rule, the above data covers all properties held at the end of March of each fiscal year.
* Intensities shall be calculated as follows: (Total use or CO2 emissions) / (Total leasable area [m²]) × (Occupancy rate[annual average][%])* “Scope1” is direct emissions of GHG which is from using fuels in buildings.
“Scope2” is indirect emissions of GHG which is using electricity and district heating & cooling supplied from other companies. Scope 3 covers emissions from fuels,
electricity and district heating&cooling used by tenants in tenant controlled areas(Category 13).

■ Status of Achievement of Targets (Compared with “(2) Environmental KPIs” on P23)
① CO2 Emissions
FY2013(base fiscal year)
Total (t-CO2)
Intensity (t-CO2/m2)
Intensity reduction rate(%)

FY2020

FY2021

FY2022

FY2023

Reduction target

54,28436,79930,487

14,983

16,925

0.18

0.11

0.09

0.04

0.05

－

-40.3%-49.3%-74.2%-70.9%• 46% reduction in intensity
by FY2030 comparedwith FY2013• Net zero emissions by
FY2050② Energy Consumption
Annualreduction target

5-year average
reduction target

1% reduction in intensity year on year in each fiscal year
FY2020Total (MWh)Intensity (kWh/m 2)

FY2021

FY2022At least 5% reduction in the intensity average of FY2020 to FY2024
compared with the intensity average of FY2015 to FY2019

FY20235-year average(FY2015–FY2019)109,293

110,536

103,609102,347

332.7

344.6

335.2

330.5

Intensity average(kWh/m2)

－

3.6%

-2.7%

-1.4%

Intensity reduction rate(%)

Intensity reduction rate (yoy) (%)

4-year average(FY2020–FY2023)

356.2

335.7

－

-5.8%

③ Water Consumption
Annualreduction target

5-year average
reduction target

1% reduction in intensity year on year in each fiscal year
FY2020

FY2021

FY2022At least 5% reduction in the intensity average of FY2020 to FY2024
compared with the intensity average of FY2015 to FY2019

FY20235-year average(FY2015–FY2019)

Total (1,000m3)

289

267

281

305

Intensity (m3/m2)

0.88

0.84

0.90

0.98

Intensity average(m3/m2)

8.3%

Intensity reduction rate(%)

Intensity reduction rate (yoy) (%)-10.2%

-5.1%

8.9%

4-year average(FY2020–FY2023)

1.23

0.90

－

-26.4%※CO2 emissions, energy consumption, and water consumption are subject to third-party assurance by Ernst & Young ShinNihon LLC

25

(7) Water Consumption Reduction
JEI endeavors to reduce water consumption by introducing water-saving devices when updating
toilets.
(Example) Kowa Kawasaki Higashiguchi Bldg.: Switched to energy/water-saving devices whenrenovating toilets (Flush water used: 13L (before)⇒ 8L (after))
JEI also works on reducing clean water consumption by installing rainwater and greywater recycling
facilities in seven of the properties it owns.

(8) Waste Reduction
With the collaboration of tenants and cleaning companies, JEI is proactively working to establish
thorough waste-sorting rules and enhance recycling, with the aim of reducing the amount of waste it
generates.

(9) Management of Hazardous Substances
When acquiring real estate, JEI checks the usage and storage conditions with respect to hazardous
substances such as PCB, asbestos, and fluorocarbons as well as verifying in advance whether
there is a possibility of ground contamination.
If hazardous substances, etc., are present, we manage, store, and dispose of them in an
appropriate manner in compliance with the laws and regulations.

(10) Promotion of Greening
JEI is proactively pursuing the greening of facilities it owns.
BIZCORE AKASAKA-MITSUKE and BIZCORE JIMBOCHO have been equipped with rooftop
gardens that may also be used as relaxation spaces and lounges. The panoramic view and pleasant
greenery contribute to improved tenant satisfaction.
At AKASAKA INTERCITY AIR, we have created an urban cool spot and a relaxing space open to
the community through the development of an extensive green space with a greening ratio of over
50% and green paths integrated with the surrounding district.
At GRAND FRONT OSAKA, a tree-lined avenue called Icho Namiki extends for a total length of 500
meters along the edge of the property, while another tree-lined avenue, Keyaki Namiki, runs eastwest between the North and South Buildings. There is a garden spanning 4,000 m2 on the northside of the North Building, and there are gardens with a total area exceeding 10,000 m2 on therooftops of the ninth floor of the South and North Building.

26

(11) Biodiversity Conservation Initiatives
The following biodiversity conservation initiatives are underway at JEI’s properties.
AKASAKA INTERCITY AIR- Installation of 237 kinds of seasonal trees and flowers, and birdhouses for small
wild birds- Waterscape regeneration based on land use and topography dating back to the Edo
periodAKASAKA INTERCITY AIR’s green urban development:
https://www.intercity-air.com/ourstories/development-concept/ (Japanese only)

AKASAKA INTERCITY- Selected as one of 100 properties by companies for biodiversity conservation (2010)- Waterscape design of pond and stream, leaving existing green slope intact

AKASAKA INTERCITY’s selection as one of 100 properties by companies forbiodiversity conservation:
https://www.nskre.co.jp/company/news/ksr/2010/20100602.html (Japanese only)27

(12) Collaboration with Tenants① Promotion of Green Leases
As a rule, newly signed lease agreements with JEI contain green lease clauses, and weare working to reduce our environmental burden in collaboration with tenants.
Green lease clauses stipulate that tenants must work in collaboration with us to improve
environmental performance, share energy consumption data, factor in environmental
considerations when performing renovation work, and so forth.
The green lease ratio is 92.9% (as of March 2024).

② Collaboration with Property Management Companies
When selecting property management (PM) companies, JEI and JEAM assess their sustainabilityrelated initiatives, and we secure their agreement to cooperate with our sustainability policies and soforth after providing an explanation.
Furthermore, we monitor PM companies’ compliance with sustainability requirements on an annual
basis.

③ Tenant Renovation Guide
We introduce each tenant to JEI’s sustainability initiatives and have created and disseminated a
Tenant Renovation Guide that introduces and recommends construction during renovation that will
reduce environmental load and improve health and wellbeing.

(13) Ensuring Environment, Health, and Safety in Real Estate
Investment
At JEI, as part of our due diligence when acquiring real estate, we conduct on-site
observations and inspections for all properties prior to concluding the purchase contract.
We also strive to avoid risks by using external experts to verify social and environmental
risks.
We partially revised our asset management guidelines in January 2023, making clearthat consideration must be given to whether there is any disaster risk, such as water
damage and landslides, and green building certification when assessing real estate forinvestment and that investments in undeveloped land must be limited only to theprojects that have obtained or are able to obtain green building certification with therecognition that an act of development impacts the natural environment and ecosystem.

28

(14) Sustainable Procurement Policy
The Sustainable Procurement Policy establishes guidelines for the selection criteria forconstruction orders and related procurement as well as selection and evaluation criteria
for suppliers in order to promote ESG consideration across the entire value chain of
JEI’s real estate portfolio.
In addition to criteria for quality, price, trustworthiness and service, the status ofsustainability initiatives is one of our criteria for supplier selection and evaluation.
We use public information, questionnaires and other means to consider (1) and (2)when selecting and evaluating.
(1) Sustainability Initiative Framework
1. Corporate Ethics
Establishing policies and systems for corporate ethics such as preventing
corruption by bribery
2. Respect for Human Rights and Diversity
a. Respecting the human rights of officers and employees and promoting
initiatives such as human resource diversity and work-life balanceb. Prohibiting unfair labor practices such as forced or child labor
3. Appropriate Working Environment and Health and Safety
Implementing appropriate working environment and health and safetymeasures for officers and employees, such as ensuring appropriate working
hours and holidays
4. Employee Health and Wellbeing
Implementing initiatives that consider the health and wellbeing of employees
5. Community Involvement
Implementing initiatives that contribute to the community/region
6. Disaster Risk Management System
Actively working to build a business continuity plan (BCP) in preparation fordisasters(2) Cooperation with JEAM’s Sustainability Practices
1. GHG Emission Reduction through Energy Conservation
a. Measuring and monitoring energy consumption
b. Promoting energy conservation through operation and renovation
2. Effective Use of Resources
Saving water, controlling waste generation and promoting recycling
3. Collaboration with Stakeholders
Reducing environmental load and promoting social consideration throughcollaboration with tenants and the community29

(15) Sustainable Finance
At JEI, in addition to promoting the acquisition of assets that target environmental performance andaddress social issues, from a finance perspective, we are taking steps to expand the investor baseactively pursuing ESG investments. As part of this, we are actively engaged in forward-looking
procurement based on sustainability finance and green finance.

① Sustainability Finance
Sustainability finance refers to loans or bonds to be taken out or issued by an entity to raise funds
required for acquiring Eligible Sustainability Projects and are generally procured in accordance withthe principles stipulated by the International Capital Markets Association (ICMA).

JEI’s sustainability finance framework has obtained the highest rating of “SU1 (F)” from the Japan
Credit Rating Agency (JCR).
URL: https://www.jcr.co.jp/greenfinance/sustainability/(1) Sustainability Finance Frameworki. Use of Procured Funds
Funds procured by means of sustainability finance shall be allocated as new funds for acquiring
Eligible Sustainability Projects (as defined in Item ii below) or funds for refinancing or redemption ofloans or investment corporation bonds required for the acquisition of Eligible Sustainability Projects.

ii. Eligible Sustainability Projects
Eligible Sustainability Projects shall be projects selected by the JEAM Sustainability Committee thatmeet the following criteria.
• Properties that have received one of the following certifications within the three years prior to the
procurement date or which are to acquire it within the remaining sustainability finance term
DBJ Green Building certification: 5-star, 4-star, or 3-star rating
CASBEE Real Estate certification: S, A, or B+ ranking• Properties that meet or exceed a given standard with respect to the following functions that help
to address social issues:
Community disaster prevention
Healthcare services
Childcare support
Adaptation to needs of elderly/disabled individuals
Socio-economic advancement and empowerment, etc.
iii. Sustainability Finance Maximum AmountThe maximum amount for sustainability finance shall be the debt (“eligible sustainability projectdebt”) obtained by multiplying the most recent total period-end book value of Eligible Sustainability
Projects by the total assets-based LTV ratio at the end of the most recent period.
iv. Finance Status (Sustainability Loans)

Lenders

Mizuho Bank, Ltd.

Loan Amount(million yen)Interest Rate

Loan Date

Principal
Repayment
Date

Loan
Term

2,000

Base interest rate
(JBA 3-Month
Japanese Yen
TIBOR) + 0.200%

September 30,
2022

March 31,
2025

2.5
years

30

② Green FinanceGreen finance is loans and bonds that an issuer procures for green projects (environmentally friendly
investments and loan projects). In general, they are procured in accordance with the Green Bond
Principles stipulated by the International Capital Market Association (ICMA) and Green Loan
Principles stipulated by the Loan Market Association (LMA).

JEI has obtained a second-party opinion (see URL below) from ESG assessment firm Sustainalytics
regarding its Green Finance Framework.
https://mstar-sustops-cdn-mainwebsite-s3.s3.amazonaws.com/docs/default-source/spos/japanexcellent-inc.-green-finance-framework-second-party-opinion-(japanese).pdf?sfvrsn=8b2364e2_1(Japanese)
https://mstar-sustops-cdn-mainwebsite-s3.s3.amazonaws.com/docs/default-source/spos/japanexcellent-inc.-green-finance-framework-second-party-opinion.pdf?sfvrsn=a54d9cba_1 (English)
1) Green Finance Frameworki. Use of Funds Procured through Green FinanceFunds procured through green finance will be allocated to new acquisition, refinancing and fundredemption of assets that meet Eligibility Criteria A below and construction costs that meet
Eligibility Criteria B.
Eligibility Criteria A- Assets that have obtained a DBJ Green Building certification of 3 stars or higher or a CASBEE
certification of B+ or higher within three years of the date of green finance execution or willobtain such during the remaining green finance period.
* See ii. Eligible Green Projects below for details.
* However, this excludes Eligible Sustainability Projects stipulated in the Sustainability Finance
Framework.
Eligibility Criteria B- Renovation work aimed at reducing CO2 emissions or energy consumption by 20% or more
- Renovation work aimed at obtaining Green Building certification or increasing current
certification level by at least one rank
ii. Eligible Green Projects
Eligible Green Projects indicates specified assets owned by JEI that have received one of thefollowing certifications within the three years prior to the Green Bond issuance date or which are
set to acquire it in the future (except for those corresponding to Eligible Sustainability Projects).
① DBJ Green Building certification: 5-star, 4-star, or 3-star rating② CASBEE Real Estate certification: S, A, or B+ ranking
Eligible Green Projects are selected by the JEAM Sustainability Committee (a committee
composed of directors, etc., formed for the purpose of promoting sustainability initiatives at theorganizational level).
iii. Maximum Amount of Green Finance Procurement
The maximum amount of green finance procurement is the sum of eligible green debt (most recent
period-end total book value of Eligible Green Projects multiplied by the most recent period-end
total assets-based LTV ratio) and total repair work expenditure.

31

iv. Finance Status (Green Bonds)
Amount ofGreen Bond
Issued(million yen)Interest rateIssuance date

Redemption date

Term ofissuance

No. 14 Unsecured
Investment Corporate
Bonds(JEI Green Bonds)

4,000

0.63%

August 10, 2018

August 10, 2028

10 years

No. 16 Unsecured
Investment Corporate
Bonds(No. 2 JEI Green Bonds)

5,000

0.75%

October 29, 2020

October 29, 2035

15 years

No. 19 Unsecured
Investment Corporate
Bonds(No. 3 JEI Green Bonds)

2,000

0.724%

February 8, 2024

February 8, 2029

5 yearsName

v. Finance Status (Green Loans)
Lenders

Mizuho BankMUFG Bank
Sumitomo Mitsui
Banking Corporation
Sumitomo Mitsui Trust
Bank

Loan
Amount(million yen)

3,760

Fixed/
VariableInterest Rate

Loan Date

Principal
Repayment
Date

Loan
Term

Variableinterest rate

Base interest
rate (JBA 3Month
Japanese Yen
TIBOR) +0.33000%

November29, 2021

November 29,
2025

4 years

December30, 2021

December 30,
2029

8 years

Mizuho BankMUFG Bank
Mizuho Trust & Banking
Resona Bank

5,750

Variableinterest rate

Base interest
rate (JBA 3Month
Japanese Yen
TIBOR) +0.43000%

Sompo Japan Insurance

500

Fixed interest
rate

0.34000%

November 30,
2022

November 30,
2027

5 years

Tokio Marine & Nichido
Fire Insurance

500

Fixed interest
rate

0.34000%

November 30,
2022

November 30,
2027

5 years

December 30,
2022

January 31,
2030

7.1
years

December 7,
2023

December 7,2033

10 yearsMizuho BankMUFG Bank
Mizuho Trust & Banking
Resona Bank

5,750

Variableinterest rate

Base interest
rate(JBA 3-Month
Japanese Yen
TIBOR) +0.37000%

The Dai-ichi Life
Insurance Company

3,000

Fixed interest
rate

1.300%

32

2. Initiatives to Address Climate Change
Addressing climate change is one of the most important social issues, and moves to build adecarbonized society is accelerating.
JEI will contribute to the development of a sustainable society by working to solve climate change
and other various environmental issues.

(1) GovernanceIn order to promote sustainability initiatives at the organizational level, JEAM has established a
Sustainability Committee chaired by the President and whose key members include the division
managers.
At the Sustainability Committee, matters related to identification, assessment and management ofclimate-related risks and opportunities, progress in adaptation and mitigation efforts, and thesetting of indicators and targets are reported on a regular basis. The Chief Executive Officer makes
final decisions after the participants in the Sustainability Committee deliberate and examine eachagenda item.
Organization Chart
Sustainability Committee (meets four times a year)
Theme

Sustainability initiatives, including climate change
President and Representative Director (Chief Executive Officer)
Planning and Management Division, and Real Estate Investment Division managers, and Compliance Officer

Members

Corporate Planning Department, Real Estate Investment Department, Real Estate Management Department,
Real Estate Engineering Department, Finance and Accounting Department, and Business Planning Department managers(operational managers)
Sustainability Committee Secretariat
Persons in charge at each department

Agenda andcontent ofactivities, etc.

・Setting targets and drafting various action plans
・Monitoring efforts and following up to achieve targets
・Implementing sustainability training for executives and employees(2) Strategy
In our qualitative analysis of climate-related risks and opportunities, we identify risks andopportunities and assess their financial impact on business. We also consider futurecountermeasures for each risk and opportunity.
Going forward, we will work to improve the resilience of our business by implementing
environmental and energy-saving measures for the buildings we own, improving the efficiency ofenergy use, reducing CO2 emissions by further introducing renewable energy-derived electricity
and CO2-free electricity, and conducting risk assessments through the use of hazard maps andothers. In addition, we will further work to reflect the results of these scenario analyses in JEI’s
operational and financial plans.

(3) Risk Management
The Sustainability Committee will consider identifying and assessing climate-related risks once ayear. In identifying risks, to the extent possible efforts are made to evaluate the time horizon,
possibility, and degree of impact of each risk and scenario.
Based on the results of a study on the possibility and the degree of impact of identified climaterelated risks, priorities for risk management responses are set, and action plans for climate-relatedrisks and opportunities that are of high priority in business and financial planning are formulated andexecuted.
To upgrade our climate change actions based on TCFD recommendations, we have added items
and indicators related to climate change risks in our risk management framework and report them to
JEAM’s Board of Directors.

(4) Metrics and Targets
Our targets are to reduce CO2 emissions intensity by 46% by FY2030 compared with the level of
FY2013, to achieve net zero emissions by FY2050, to reduce energy consumption intensity andwater consumption intensity by 1% year on year in each fiscal year, and on a medium- to long-termbasis, to reduce the average consumption intensity of them between FY2020 and FY2024 by at least
5% from the level between FY2015 and FY2019.
33

(5) Financial Impact Assessment and Response Measures for Climaterelated Risks and Opportunities
1. Qualitative financial impact analysis
4˚C scenario

1.5˚C scenario

Financial impact

Financial impact

Short Medium Long
term
term
term

Short Medium Long
term
term
term

Low

Low

MediumLow

MediumHigh・ Improving energy efficiencyof existing properties
through facility upgrades
and renovations
・ Replacement with and newacquisition of properties
that have highenvironmental performance

Low

Low

MediumLow

MediumHigh

Increase in the cost of
introducing new・ Replacement with and new
Evolution and diffusion technologies toof renewable energy
prevent equipment inacquisition of properties
Technology
and energy-saving
the existing properties
that have the latest energytechnologies
from becomingsaving facilities
technologicallyobsolete

Low

Low

MediumLow

MediumHigh

Introduction ofenvironmental
performance anddisaster resilience
standards for realestate appraisals

・ Increasing the ratio of DBJ
Green Building Certification
・ Improving energy efficiency
and reducing CO2
emissions through facility
upgrades and renovations
Decline in the fund’s・ Implementation of risk
Net Asset Value (NAV)
assessment using hazard
maps, etc.
・ Reducing the risk ofproperty damage bymaking reinforcements asneededLow

MediumHigh

Low

MediumHigh

ESG evaluation of
rating agencies andchanges ininvestors’/lenders’stance on ESG
investment andlending

・ Promotion of ESG andIncrease in debt equity
climate change measuresfunding costs due toand enhancement of
delays in addressing
disclosure
ESG and climate
・ Improved ESG appraisalschangeby external organizations

Low

MediumHigh

Medium Medium

High

Changes in tenant
demand (choosing
properties that are
more climate resilient
or avoiding properties
that are not)Decrease in revenue
due to difficulty inacquiring new tenants

Low

MediumHigh

Medium Medium

High

Decline in brand value
due to delayed
response to climatechangeLower revenue andlower unit prices due
to lower occupancy
rates

Low

MediumHigh

Medium Medium

High

Policy and
Law

Transition
Risks

MarketReputation

Climate-relatedrisks andopportunities

Financial impact on
JEI

Increase in taxes on
GHG emissions due tothe introduction ofcarbon tax

Increased tax burden
on properties
associated with GHG
emissions

Strengthening ofenergy conservation
standards for existingand new buildings

Increase in renovation
costs and property
acquisition costs
related to addressing
climate changeCountermeasures andrisk management to beconsidered・ Reduction of CO2
emissions by switching to
renewable energy-derived
electricity and CO2-freeelectricity

・ Increasing the ratio of DBJ
Green Building Certification
・ Reduction of CO2
emissions by switching to
renewable energy-derived
electricity and CO2-freeelectricity
・ Improving energy efficiencyof existing properties
through facility upgrades
and renovations
・ Reducing the risk ofproperty damage bymaking reinforcements asneeded(Note) Assumed time horizons — Short term: to 2025; Medium term: to 2030; Long term: to 2050

34

Climate-relatedrisks and opportunities
Increase in damage toproperties due to storms
and floods
Acute

Inundation due to inland
flooding caused byconcentrated heavy rain,
flooding of nearby rivers,
etc.
Inundation of property
due to a rise in sea level,
rainfall or changes inweather patterns

Physical
Risks

Chronic

Higher demand for air
conditioning due to anincrease in extreme
climates such as
extremely hot andextremely cold days

Provision of facilities andservices that reduce therisk of disasters such as
Products floods
andServices
Attracting tenants andusers by providing highly
efficient and lowemission facilities andservices

Financial impact on
JEI

Increase in repair and ・ Implementation of risk
insurance costs andassessment using
decrease in occupancy
hazard maps, etc.
rates
・ Holding properties inareas less affected byflood damage
・ Reducing the risk of
Incurring of costs forproperty damage bymajor renovation
making reinforcements(raising) andas neededreinforcement ofinundation-resistantfacilities
・ Improving energy
efficiency of existing
properties throughfacility upgrades andrenovations
Increase in air
・ Expansion of green
conditioning operation,lease contracts andmaintenance and repair
implementation ofcosts
energy-saving
measures incooperation with tenants
・ Promotion of greening infacilities
・ Implementation of risk
assessment using
hazard maps, etc.
・ Reducing the risk of
incurring damage bymaking reinforcements
as needed
Increase in rent, andincrease in revenue by
attracting new tenants
and continuing tenantsContinued provision ofrental properties in linewith changes in tenant
preferences anddevelopment of new
customer segments

Opportunities

Markets
Responding to changes
in the stance of lenderdebt equity investors on
investing and lending due
to the further progress in
ESG investments

Countermeasures andrisk management to beconsidered

Diversification offunding methods andreduction of funding
costs by responding toand appealing toinvestors who place
importance on
addressing ESG andclimate change

・ Increasing the ratio of
DBJ Green Building
Certification
・ Reduction of CO2
emissions by switching
to renewable energyderived electricity andCO2-free electricity
・ Improving energy
efficiency and reducing
CO2 emissions throughfacility upgrades andrenovations
・ Promotion of ESG andclimate change
measures andenhancement of
disclosure
・ Reducing funding costs
through further use ofgreen finance andsustainability finance(Note) Assumed time horizons — Short term: to 2025; Medium term: to 2030; Long term: to 2050

35

4˚C scenario

1.5˚C scenario

Financial impact

Financial impact

Short Medium Long
term
term
term

Short Medium Long
term
term
term

Medium Medium

High

Medium Medium

High

Medium Medium

High

Medium Medium

High

Low

MediumHigh

Low

Medium Medium

Low

MediumHigh

Low

Medium Medium

Medium Medium

High

Medium Medium

High

Low

Medium Medium Medium Medium

High

Low

Medium Medium Medium Medium

High

Low

Medium Medium Medium MediumHigh2. Quantitative financial impact analysis

Impacts in each scenario
SectionItems(Risks and Opportunities)

Increase in taxes on GHG emissions
due to the introduction of carbon tax
Policy and Law

Technology

Transition risk

Market4°C scenario

No increase in taxes on GHG emissions fromproperties (status quo)・Increase in renovation costs to support energy
saving (-)
・Decrease in utilities expenses, CO2 emissions
and carbon tax through energy-saving
renovations (+)

Evolution and diffusion of renewableenergy and energy-saving technologies

Increase in the cost of introducing newtechnologies to prevent equipment in the existing
properties from becoming technologicallyobsolete (-)

Increase in the cost of introducing newtechnologies to prevent equipment in the existing
properties from becoming technologicallyobsolete (-)

Introduction of environmental
performance and disaster resilience
standards for real estate appraisals

Environmental certification has impact on realestate appraisals (+) (-)

Environmental certification has impact on realestate appraisals (+) (-)

ESG evaluation of rating agencies andIncrease in debt equity funding costs due toIncrease in debt equity funding costs due tochanges in investors’/lenders’ stance ondelays in addressing ESG and climate change (-) delays in addressing ESG and climate change (-)
ESG investment and lending

Decline in brand value due to delayed
response to climate change

Physical risk

income (-)
Inundation due to inland flooding caused Large portion of loss covered by insurance (+)
by concentrated heavy rain, flooding of
nearby rivers, etc.
Inundation of property due to a rise in
sea level, rainfall or changes in weather
patterns

Chronic

Products andServices

Decreased rent income in properties without
environmental certification (-)

Lower revenue and lower unit prices due to lower Lower revenue and lower unit prices due to lower
occupancy rates (-)
occupancy rates (-)

Increase in damage to properties due tostorms and floods
Occurrence of repair costs and decrease in rent
AcuteSignificantly increased tax burden on properties
associated with GHG emissions (-)

・Increase in renovation costs to support energy
Strengthening of energy conservation
saving (-)
standards for existing and new buildings ・Decrease in utilities expenses and CO2
emissions through energy-saving renovations (+)

Changes in tenant demand (choosing
Decreased rent income in properties without
properties that are more climate resilient
environmental certification (-)
or avoiding properties that are not)Reputation

1.5～2°C scenario

Occurrence of repair costs and decrease in rent
income (-)
Large portion of loss covered by insurance (+)

Occurrence of costs for large-scale renovation
Occurrence of costs for large-scale renovation(raising) and reinforcement of inundation-resistant (raising) and reinforcement of inundationfacilities (-)
resistant facilities (-)

Higher demand for air conditioning due
to an increase in extreme climates such Increase in utilities expenses due to increased
as extremely hot and extremely cold
operation of air conditioning (-)
days

Increase in utilities expenses due to increased
operation of air conditioning (-)

Provision of facilities and services that
reduce the risk of disasters such as
floodsAttracting tenants and users byproviding highly efficient and lowemission facilities and services

Increased rent income in properties withenvironmental certification (+)

Increased rent income in properties withenvironmental certification(+)

Diversification of procurement methods andreduction of procurement costs by responding toand appealing to investors who place importanceon addressing ESG and climate change (+)

Diversification of procurement methods andreduction of procurement costs by responding toand appealing to investors who place importanceon addressing ESG and climate change (+)

Continued provision of rental properties
in line with changes in tenant
preferences and development of new
customer segments

Opportunities

MarketResponding to changes in the stance oflender debt equity investors on investing
and lending due to the further progressin ESG investments(Note) Assumed time horizons — Medium term: to 2030

361） Waterfall chart (4℃ scenario)

2) Waterfall chart (1.5-2℃ scenario)(Note) This estimate is made by referring to various parameters such as scenarios and reference materials presented by major organizations based on the operating performance, etc.
of JEI and the amount of financial impact is an annual basis, and no assurances are provided on the accuracy thereof. Furthermore, the assumed measures are estimatedassumptions, and no plans or decisions have been made to execute them.

3. Regular review of climate change risks and opportunities
In October 2022, JEAM began a regular review of the current manifestation of identified risks andopportunities and any change in the external environment.

37

3. Sustainability Certifications, Etc.
(1) Acquisition of Environmental Performance-Related
Certifications
The JEAM Sustainability Committee creates an overall sustainability initiative plan to promote in asystematic manner the acquisition of environmental performance certifications, such as DBJ Green
Building certification, to be obtained each year.
Acquisition status of environmental certifications （As of June 30, 2024）
Percentage certified (bynumber of properties)

Number of properties

Percentage certified (byleasable area)

Leasable area (m²)

DBJ Green Building Certification

9

25.7%

81276.24 m²

25.7%

CASBEE Real Estate Certification

19

54.3%

200,841.16㎡

63.5%

CASBEE Wellness Office Certification

1

2.9%

2,580.24 m²

0.8%

Offices Taking Excellent Specific Global
Warming Countermeasures

1

2.9%

2,580.24 m²

0.8%

BELS

4

11.4%

50,852.07

16.1%

Properties with environmental certification
total

25

71.4%

267,476.98 m²

84.6%

Portfolio total

35－

316,149.65 m²－*The percentages are based on the number of certified properties to the total number of properties or the ratio to the total leasable area (not including
the land).
*The leasable area of jointly owned properties is calculated by multiplying the leasable area of the entire building by percentage equity in the property.
*The residential section and the office section of HAMARIKYU INTERCITY are calculated as separate properties.
*The total number of certified properties and the total leasable area is calculated by counting any property with multiple certifications as one property.

① DBJ Green Building Certification
With the aim of promoting environmental performance, security, disaster prevention, and the spreadof properties that meet the societal requirements of various stakeholders connected with real estate(“Green Building”), the DBJ Green Building Certification system assesses buildings using a scoringmodel developed independently by the Development Bank of Japan (DBJ) to evaluate exceptional
properties that meet today’s needs for certification.
JEI has acquired certification for the following properties.
Property NameAKASAKA INTERCITY AIR
HAMARIKYU INTERCITY
Residential section
HAMARIKYU INTERCITY
Office section
Omori Bellport D
BIZCORE JIMBOCHO

Property Name

Certification(★★★★★)
Properties with the best
environmental and social
awareness

Mansard Daikanyama
JEI Hongo Building

JEI Hiroshima Hacchobori Building(★★★)
Properties with excellent
environmental and social
awareness

Shiba 2-Chome Building

38

Certification(★★)
Properties with high environmental
and social awareness(★)
Properties with sufficientenvironmental and social
awareness

② CASBEE Real Estate Certification
CASBEE is a certification established under the leadership of Japan’s Ministry of Land,
Infrastructure, Transport and Tourism for the purpose of appropriately recognizing and assessing
well-managed properties with high environmental performance and significant environmental
benefits.
JEI has acquired certification for the following property
Property Name

Certification

BIZCORE AKASAKA-MITSUKE
Daiba Garden City Building
Kawasaki Nisshincho Building

Property Name

Certification

GRAND FRONT OSAKA (Umekita Square/ South Building)

S rank (South Building)
A rank (Umekita Square)

AKASAKA INTERCITY

Core City Tachikawa

SE Sapporo Building

BIZCORE SHIBUYAJEI Hamamatsucho Building

BIZCORE TSUKIJI

A rankKowa Nishi-Shimbashi Building
S rankNisseki Yokohama Building

Hiroshima Dai-ichi Seimei OS Building

Kowa Kawasaki Higashiguchi Building
Mansard Daikanyama
GRAND FRONT OSAKA (North Building)Musashikosugi Tower PlaceJEI Hiroshima Hacchobori Building
AkASAKA INTERCITY AIR③ CASBEE Wellness Office Evaluation Certification
The CASBEE Wellness Office Evaluation Certification system was established by the Institute for
Built Environment and Carbon Neutral for SDGs (IBECs) in 2019 for the purpose of evaluating thespecifications, performance, and initiatives of buildings to help maintain and enhance the health andwellbeing of building users.
JEI has acquired the certification for the following property.

Property Name

Certification
S rank(First property to receive certification)

AKASAKA INTERCITY AIR④ Offices Taking Excellent Specific Global Warming Countermeasures
An Office Taking Excellent Specific Global Warming Countermeasures is an office recognized by
the Tokyo metropolitan government for exceptional promotion of global warming countermeasures.
The designation is granted to large-scale offices that meet standards specified by the Governor ofTokyo when assessed with regard to establishing systems to promote CO2 reduction, building andfacility performance, office and facility operation and management, etc.
Certified offices may be granted mitigation of the specified greenhouse gas total emission reduction
ratio that they are obligated to meet, based on the extent to which they are promoting
countermeasures.
Among the properties owned by JEI, AKASAKA INTERCITY AIR has been certified as a “Top-Level
Office,” and its mandatory emission reduction ratio has been reduced by 50%

Property Name

Certification

AKASAKA INTERCITY AIR

Top-Level Office39➄ Building-Housing Energy-Efficiency Labeling System (BELS) Assessment
Following the establishment of the “Evaluation Guidelines for Energy-Efficiency Labeling for NonResidential Buildings (2013)” by the Ministry of Land, Infrastructure, Transport and Tourism in
October 2013, the BELS system was introduced for the purpose of implementing accurate
evaluation and labeling of non-residential buildings’ energy-efficiency performance by third-party
organizations based on the guidelines. Evaluations are based on a five-level system (★ to★★★★★).
JEI has obtained an evaluation for the following property.

Property Name

Certification

Nisseki Yokohama Building★★

BIZCORE AKASAKA-MITSUKE★★★

BIZCORE SHIBUYA★★★

BIZCORE JIMBOCHO

★★★★

40

(2) Global Real Estate Sustainability Benchmark (GRESB)Real Estate Assessment
Established by European pension fund groups, the Global Real Estate Sustainability Benchmark(GRESB) is a benchmark for measuring real estate companies’ and management organizations’commitment to sustainability, which is used, for example, when leading European, U.S., and Asian
institutional investors select investment targets.
In the 2023 GRESB Real Estate Assessment, JEI acquired a Green Star, which is the highest rating,for the nineth consecutive year. Moreover, for the GRESB Rating, which is evaluated using quintiles
based on overall score relative to other participants, it acquired a 5 Star rating for the fourthconsecutive year.
Furthermore, we ranked first in the Japan Listed Office category for two years in a row.

(3) MSCI ESG Rating

MSCI awards its ESG ratings by analyzing and evaluating theextent to which companies are managing environment, social,and governance risks. JEI has acquired an A rating.

41

S
Social Initiatives

IV. Social Initiatives
JEI and JEAM view tenants, property management companies, the communities where properties arelocated, JEAM’s employees, and society as a whole as key stakeholders, and we are engaging withthem as follows.

1. Initiatives for Tenants
We are working with tenants, property management companies, etc., to improve tenant satisfaction,
prevent disasters, and reduce our environmental burden.

(1) Providing High-Quality Services with Consideration for User
Safety and Security① Disaster prevention
measures② Holding events incommon areas

Installation of emergency
generators

Hosting concerts and otherevents

③ Setting up relaxation spaces ④ Renovating common
in common areas
areas (entrances, etc.)

Upgrading entrances,
etc., to improve tenantsatisfaction

Stocking supplies for use in
the event of a disaster⑤ Introducing LED lighting⑥ Measuring air quality⑦ Greening of facilities

Enabling energy-saving incommon areas

Regularly measuring air
quality to maintain thequality of air inside buildings

43

Greening of grounds
Establishing rooftop gardens

(2) Tenant Satisfaction Survey
We conduct periodic satisfaction surveys with tenants and office workers, with the aim of increasing
tenant satisfaction by using the survey results to improve property operation and management.

Improving Tenant Satisfaction

Conduct tenantsatisfaction surveys

Aggregate/analyze
results

Implement
countermeasures

Considercountermeasures

Tenant satisfaction surveys:
12 properties in FY2018
11 properties in FY2019
11 properties in FY2021
16 properties in FY2022
0 properties in FY2023
9 properties in FY2０２４ (scheduled)44

2. Safety and Security Initiatives
JEI and JEAM ensure the safety of users and tenants and provide services and facilities that may be
used in comfort and peace of mind. We strive to implement safety measures while incorporating theexpertise of our sponsors.

(1) Earthquake Damage Assessment Measures
In response to increased interest in buildings’ seismic performance following the Great East Japan
Earthquake in 2011, JEI developed a system aimed at minimizing damage and facilitating rapid
recovery from a BCP perspective in the event of a natural disaster, epidemic, etc. Furthermore, as acondition when selecting new management assets, we have stipulated in our management
guidelines that assets must meet specific earthquake-resistance standards or possess equivalent or
superior seismic performance.
In the case of properties that were not designed based on new earthquake-resistance standards, we
review the seismic diagnosis details and verify whether they possess the required strength. In
addition, we have a policy to conduct in advance seismic performance assessment performed by athird-party organization with professional expertise for all properties that we are considering
acquiring. Specifically, we receive a report on the details of documents such as specification sheets,
structural calculation sheets, building permits, etc., from an independent perspective, following
thorough investigation by the third-party organization.

(2) Disaster Prevention and Business Continuity Planning (BCP)
Measures
In preparation for contingencies such as a natural disaster or large-scale power failure, JEAM has
created crisis management procedures and a business continuity plan with the aim of implementing
organizational measures.
Our BCP outlines concrete measures to minimize impacts on our stakeholders through the prompt
resumption of operations after disasters.
We review our rules and plans in response to changes in the external environment and our internal
structures. Most recently, we reviewed BCP-related rules and so on in October 2023 in line with thecurrent operation status and prepared a manual on how to deal with infectious diseases.

(3) Implementation of Disaster-Preparation Drills
We conduct periodic disaster-preparation drills at buildings owned by JEI, with the aim of ensuring
user safety, maintaining business continuity for all tenants, and raising awareness of disasterprevention. JEAM also strives to improve response capabilities by conducting periodic disasterpreparation drills and business continuity training at disaster-prevention facilities.

(4) Use of PML Value When Making Investment Decisions
PML (Probable Maximum Loss) is the maximum anticipated loss due to an earthquake. The lower
the percentage is, the smaller the loss will be.
JEI assesses the PML when acquiring properties and uses it to make investment decisions.
45

3. Initiatives for the Local Community(1) Urban Revitalization and Development
Our sponsor Nippon Steel Kowa Real Estate is creating green spaces in cities through its
involvement in large-scale urban development and community revitalization projects. JEI iscontributing to urban redevelopment and rejuvenation through collaboration with our sponsors, suchas acquiring AKASAKA INTERCITY AIR, a development project constructed in the Akasaka area.

(2) Promoting Exchange with Communities and Using Social
Functions of JEI-Owned Properties
We support community activities by providing spaces in office building common areas to hold regularconcerts and other events.
Moreover, AKASAKA INTERCITY AIR houses a wide range of facilities to support office workers,
visitors, and local residents, including a daycare, clinic, and large green space. It also plays a role asa community disaster-prevention facility, thanks to an emergency generator that will supply back-up
power for up to 200 hours and a robust vibration control system.

46

4. Initiatives for Employees
Recognizing that people are its most important management resource, JEAM works to recruit top talent,
provide training, and create a rewarding work environment where a wide range of personnel can thrive.

(1) Talent Development① Training Programs/Programs Provided by Specialized External Institutions
JEAM provides training to enhance the skills of all personnel, including part-time and contract workers.
Similarly, we cover costs related to the enhancement of professional expertise, such as taking various
seminars run by external organizations, with the aim of supporting employees’ development.
We also use the ARES Certified Master qualification system created by the Association of Real Estate
Securitization (ARES). This training program enables participants to systematically acquire practicalexpertise in the real estate and finance fields. In addition to covering the cost of acquiring thisqualification, we encourage employees to take part in programs for certificate holders (training,seminars, etc.).

② Supporting Acquisition of Professional Certifications
We actively encourage all employees, including part-time and contract workers to acquire professional
qualifications for the purpose of human resources development. We support employees’ efforts toimprove their skills by covering costs related to classes and examinations for acquiring qualifications,as well as costs associated with maintaining them.

③ Performance Appraisals and Feedback
All employees set annual objectives following discussion with their supervisor (including ESG-related
objectives, which all employees are required to set), and at the end of the year, a meeting is held toappraise their performance by reviewing their work and provide feedback on the results of theassessment. Performance appraisal results are also reflected in the employee salaries and bonuses.
We have established a transparent performance appraisal system based on regular evaluation andfeedback.

④ Annual Employee Satisfaction Survey
We monitor employees satisfaction levels by conducting a satisfaction survey with all personnel oncea year. The survey results are reported to management and are also used to provide feedback to
employees and create/execute an action plan, which leads to an improved work environment.

⑤ Rank-Based Training Program
We have systematically instituted training by job rank in line with the required competencies for each
grade and position in order to develop long-term careers and train future executives according to rank.
<JEAM employees’ participation in training programs>
FY2021

FY2022

FY2023

Total annual training time

513 hours

664 hours

654 hours

Training time per employee

14 hours

18 hours

19 hours

Training cost per employee¥37,306¥39,867¥39,18247

(2) Benefit Programs and Supporting Work-Life Balance
We have developed the following benefit programs for all employees, including part-time and contract
workers, to support a healthy work-life balance.
• Flexible working hours• Reduced hours and leave for childcare• Reduced hours and leave for nursing care

① Prevention of Long Working Hours
We have introduced a flextime system that enables employees to do their work efficiently whilebalancing their private and professional lives by allowing them to set their own working hours anddaily start and end times with the aim of improving labor productivity. We also track PC log-in and
log-out times appropriately monitor employees’ working hours and hours of overtime work. Throughthese measures, we are striving to limit long working hours.

Average overtime per month

FY 2019

FY 2020

FY 2021

FY 2022

FY202316.2 hours

17.6 hours

26.6 hours

27.5 hours

24.2 hours② Leave System
To help each individual employee achieve a healthy work-life balance, we have introduced a halfday leave system, a refreshment leave system that employees may use for every five years ofcontinued service, and a cumulative leave system that allows employees to accumulate unused
annual paid leave and use it in cases such as long-term sick leave.

Paid leave usage rate

FY 2019

FY 2020

FY 2021

FY 2022

FY2023

71.1%

61.4%

61.3%

67.4%

81.2%

③ Remote WorkTo establish the practice of working remotely (working from home), we created teleworking rules in
May 2023 with the aim of improving productivity and job satisfaction through the promotion offlexible work styles catering to employee diversity.

④ Health Checkups
We strive for prevention and early detection of health issues by providing thorough regular healthexaminations, as well as recommending flu shots (costs partially subsidized by the healthinsurance association).
We also have a system that enables us to refer interested individuals to an industrial doctor for ahealth consultation.

Health insurance
examination rate

FY 2019

FY 2020

FY 2021

FY 2022

FY2023

100%

100%

100%

100%

100%

48

(3) Health and Wellbeing
We consider employees’ mental and physical well-being to be indispensable to the continuous
development of JEI and JEAM. In order to promote a highly productive and richly creative workplace,
we are striving to improve the work environment, including the development of in-house systems at
JEAM, and proactively working to enhance employees’ health and wellbeing.

① Health Promotion System
In order to maintain employees’ health and wellbeing, JEAM partially subsidizes annual healthscreenings and full health checks and works with welfare service providers.

② Establishment of Employee Grievance Reporting System and CommentBox
We have established a grievance procedure via which employees may anonymously report
workplace-related complaints such as harassment.
As an example, reports relating to sexual harassment are handled by the Compliance Officer,
Business Planning Department manager, and an external law firm and escalated internally.
Furthermore, any employee, not just the victim, may consult the person responsible for handlinggrievances and report complaints, and in cases where the grievance is deemed to be valid, it will bereported to the CEO. The CEO will take disciplinary action in accordance with the rules after verifying
the circumstances while taking care to respect individuals’ privacy.
In addition to the grievance procedure, we have also set up comment boxes internally which allow all
employees to freely share their opinions with the company regarding the work environment andbusiness matters. Since unsigned comments are accepted, employees may express any opinions
whatsoever without reservations. The president and other relevant personnel discuss submittedcomments and decide on the actions to be taken.

③ Individual Meetings with Employees
All employees meet individually with the president once a year. At this meeting, they discuss theirissues and preferences with respect to their day-to-day work, the work environment, employee healthand wellbeing, etc. Their feedback plays a role in improving employee satisfaction and well-being.

④ Development of Office Environment
In order to develop a comfortable office environment, JEAM has introduced plants at various officelocations and established a free drink corner in the kitchen area with the aim of promoting employee
interaction. We are also working to implement paperless meetings through the use of tablets.

⑤ Employment/Labor Environment
Since the founding of JEAM, labor-management relations have remained favorable, with no issues
such as strikes occurring between labor and management. Moreover, we have not been involved inany mergers and acquisitions or laid off any personnel in the past.

49

(4) Diversity
JEAM respects the diversity of individual directors and employees, irrespective of gender, nationality,
age, beliefs, etc., and promotes the creation of an environment where everyone may play an activerole.

① Respect for Human Rights
JEAM’s Code of Conduct stipulates respect for human rights and prohibits discrimination, harassment,
and the like. Believing that respecting human rights, prohibiting discrimination, and creating an
inclusive work environment where diverse personnel can play an active role leads to continued
growth and social contributions, we are engaged in initiatives such as addressing human rights
issues in our in-house training.

② Establishment of Human Rights Policy
ＪEAM established its policy on human rights in February 2023 and endeavors to ensure that all
officers and employees (including contract-based and temporary employees) are familiar with thepolicy through compliance training and other activities and to comply with the policy.

Human Rights Policy
Japan Excellent Asset Management Co., Ltd. recognizes that respect for human rights is an
important social responsibility of a company, supports international human rights norms such as
the International Bill of Human Rights, the International Labour Organization (ILO) Declaration
on Fundamental Principles and Rights at Work, the United Nations (UN) Global Compact andthe UN’s Guiding Principles on Business and Human Rights, and promotes efforts to respecthuman rights.
1. Elimination of discrimination
We will not engage in any discrimination based on race, nationality, religion, ideology, creed,gender, age, sexual orientation, physical disability or such.
2. Prohibition of harassment
We will not tolerate any form of harassment, including sexual harassment and abuse of
power.
3. Prohibition of child labor and forced labor
We will not tolerate any form of forced labor or child labor.
4. Respect for freedom of association and the right to collective bargaining
We will respect freedom of association and the right to collective bargaining.
5. Payment of appropriate wages
We will comply with the legally mandated minimum wage and give consideration to paymentof wages above the living wage. We will also apply a compensation system that complies
with equal pay for equal work.
6. Curbing of overwork and reduction of overtime
We will comply with labor-management agreements (Article 36 agreement) regarding
overtime work and strive to curb overwork and reduce overtime.
7. Assurance of employee health and safety
We will strive to create a workplace where employees can work safely and healthily inaccordance with the Labor Standards Act and other laws and regulations.

50

③ Promoting DEI to secure diverse human resources
Realizing that human resources are the most important management resources, JEAM is awarethat promoting diversity, equity, and inclusion (DEI) will help raise its medium- and long-term profits
and aims to create and maintain a diverse, equitable, and inclusive environment by securing
excellent human resources regardless of their ethnicity, sexual orientation, gender identification,
disability, religion, presence or absence of spouse, social and economic conditions, and nationality,
among other attributes.

④ Supporting the Advancement of Female EmployeesWith the aim of creating a work environment where each individual employee may make full use of
their talents and personality, we are striving to establish a female employee-friendly work
environment through the introduction of a childcare leave system, a reduced working hours systemthat provides greater flexibility, and the option to proactively take paid leave. We are also striving toencourage male employees to take childcare leave.
FY 2019

FY 2020

FY 2021

FY 2022

FY2023

No. of employees who havetaken childcare leave

1

0

0

3

1

No. of employees working
reduced hours

1

1

0

0

1

⑤ Supporting the Advancement of Senior Employees
We have established an environment that enables seniors to play an active role by introducing a reemployment system that enables us to continue employing personnel who wish to keep working after
the retirement age of 60.

No. of employees aged 60 or overFY 2019

FY 2020

FY 2021

FY 2022

FY2023

4

4

4

5

4

⑥ Flextime/WFH Systems
JEAM has introduced a flextime system and a work-from-home system to support employee lifestylebased working.

⑦ Employee Stock Ownership Plan （ESOP）
JEAM has introduced an employee stock ownership plan for all direct employees of JEAM, with the
purpose of enhancing the value of JEI’s unitholders over the medium- to long-term by promoting unityof interest between JEI’s unitholders and JEAM’s employees, and promoting the welfare of JEAM’s
employees.

⑧ LGBTQ
JEAM respects diversity and endeavors to provide a pleasant work environment for all its
employees. It periodically offers internal programs to promote the understanding of LGBTQ.
51

(5) Personnel-Related Data
With regard to the outcomes of employee initiatives, JEAM calculates and monitors the following
figures for all employees, including part-time and contract workers.
Fiscal 2019

Fiscal 2020

Fiscal 2021

Fiscal 2022

Number of employees (full-time
employees and contract employees)

32

32

32

34

33

Number of full-time employees

32

32

32

34

33

(Male)

23

25

24

24

23

(Female)

9

7

8

10

10

0

0

0

0

0

(Male)

0

0

0

0

0

(Female)

0

0

0

0

0

14

14

14

14

13

(Male)

13

14

14

13

12

(Female)

1

0

0

1

1

28.1%

21.9%

25.0%

29.4%

30.3%

6.0 years

7.0 years

7.6 years

7.8 years

7.8 years(Male)

5.3 years

6.0 years

6.9 years

7.3 years

7.8 years(Female)6.8 years

8.6 years

8.5 years

8.5 years

7.8 years

3

1

2

2

2

(Male)

2

1

1

1

1

(Female)

1

0

1

1

1

1

1

1

0

1

(Male)

1

1

1

0

0

(Female)

0

0

0

0

1

3.4%

3.1%

3.1%

0.0%

2.9%

Number of contract employees

Number of seconded employees

Percentage of female employees
Average length of service

Number of newly hired employees

Number of displaced workers

Employee TurnoverFiscal 2023

Percentage of officers and employees who received training

Career development training

100%

100%

100%

100%

100%

Sustainability training

100%

100%

100%

100%

100%

52

G
Corporate GovernanceInitiatives

V. Corporate Governance Initiatives
JEI strives to thoroughly implement and strengthen its corporate governance from a medium- to longterm perspective under the leadership of a Board of Directors whose members include an executive
director and supervisory directors.

1. JEI’s Corporate Governance(1) JEI’s Decision-Making Bodies
JEI shall have at least one executive director and at least two supervisory directors(note: the number shall always exceed the number of executive directors by at leastone).
As of June 30, 2024, JEI’s decision-making bodies consist of a unitholders’ meeting
comprised of unitholders, one executive director, three supervisory directors, a Board of
Directors comprised of the executive director and supervisory directors, and an
accounting auditor. One attorney, one certified public accountant and one real estateappraiser are appointed as JEI’s supervisory directors, and each of these directors
supervises the status of business execution by executive directors from the perspectiveof their respective areas of expertise.
Please see “1. Overview of Investment Corporation – (4) Structure of Investment
Corporation – 1. Items Relating to Investment Corporation’s Governance” in the
Securities Report for details of the following:• Information about investment corporation bodies (unitholders meeting, executive
director, supervisory directors, Board of Directors, accounting auditor)• Organization of internal control- and supervisory director-based oversight, personnel,
and procedures• Inter-relationship of internal control- and supervisory director-based oversight andauditing• Implementation of governance system for related corporations by the investment
corporation(2) Selection Criteria for Directors
Candidates for directors must not meet any of the criteria for disqualification stipulated in theInvestment Trust Act and other laws and must not have any special vested interests in JEI. The
candidates must be competent to carry out the various duties they have to fulfill. They are selectedby means of a resolution of JEI’s General Meeting of Unitholders.

54(3) Compensation for Directors
The payment standards for compensating the executive director and supervisory directors stipulated
in JEI’s by-laws are shown below. Any changes require a General Meeting of Unitholders resolution.
• Compensation for an executive director shall be the amount determined by the Board of Directors,
with an upper limit of 700,000 yen per month per person• Compensation for a supervisory director shall be the amount determined by the Board of
Directors, with an upper limit of 700,000 yen per month per person
The actual amount of compensation is as follows.
Total compensation for each director (Thousand yen)

Title

Name
Period ended Jun. 2023 Period ended Dec. 2023

Executive Director

Shuichiro Kayama

Supervisory Director--

Shunichi Maekawa (Note 1)

1,500

-

Supervisory Director

Eiji Takagi

1,800

1,800

Supervisory Director

Osamu Hirakawa

1,800

1,800

Supervisory Director

Hiroaki Komatsu (Note 2)－

600(Note 1) Shunichi Maekawa resigned as Supervisory Director on May 31, 2023.
(Note 2) Hiroaki Komatsu assumed the position of Supervisory Director as of November 1, 2023.

(4) Transactions with Interested Parties
With regard to management of JEI’s assets, there may be conflicts of interest involving theinvestment corporation and sponsor companies when, for example, acquiring properties from asponsor or outsourcing property management work to a sponsor. In order to prevent the investment
corporation incurring damage as a result, JEAM has developed a rigorous system for preventing
conflicts of interest based on the Rules for Transactions with Sponsor-Related Parties.
These rules stipulate that designated transactions must obtain the Compliance Committee’s
approval and be discussed and decided on by the Investment Committee.

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2. JEAM’s Corporate Governance
JEAM strives to make timely decisions and execute efficient operations while increasing managementtransparency and awareness of corporate ethics. By thoroughly implementing and strengthening these
efforts, it aims to improve JEI’s unitholder value.

(1) JEAM’s Organizational Structure
JEI entrusts management of its assets to JEAM.
JEAM’s organizational structure is as shown below.

Shareholders’ Meeting
AuditorBoard of Directors
Compliance Committee

Investment Committee

Compliance Officer
Executive Director

Planning and Management Div.

Corporate
Planning Dept.

Finance andAccounting Dept.

Real Estate Investment Div.

Business
Planning Dept.

Real Estate
Investment Dept.

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Real EstateManagement Dept.

Real EstateEngineering Dept.

(2) Investment and Management Decision-Making Mechanism
JEAM has established an Investment Committee as a collegiate body whose role is to discuss the
specific application of investment principles stipulated in the company rules, fundraising and dividend
policies, the sale and acquisition of operating assets, and operating asset management principles.
It has also established a Compliance Officer to serve as a supervisory manager with regard tocompliance with laws, regulations, etc., along with a Compliance Committee to discuss and decide on
basic matters and key issues pertaining to legal compliance, etc., whose members include theCompliance Officer as the Chair.
The execution of asset management duties is divided among the Corporate Planning Department,
Finance and Accounting Department, Business Planning Department, Real Estate Investment
Department, Real Estate Management Department, and Real Estate Engineering Department.

In addition, in the event that a new organizational unit is required for JEAM, it will be establishedbased on a resolution of the Board of Directors.

① Decision-Making Process When Acquiring Properties
Revision, Resubmission, or discard

In accordance with the investment corporation’s by-laws,
JEAM has created asset management guidelines that stipulate
basic investment principles and so forth for managing assets
for the benefit of the investment corporation, an asset
management plan based on the regulations of the Japan
Investment Trusts Association (JITA), and an annual
management plan that serves as JEAM’s internalmanagement plan (comprised of an annual sales andacquisition plan, annual leasing and management plan, andannual fundraising plan). JEAM also makes decisions on thesale and acquisition of individual operating assets inaccordance with the aforementioned asset management
guidelines, etc.

Draft plan
Approval

Compliance Officer

Compliance Committee

Investment Committee
ReportBoard of Directors

JEI Board of Directors

JEI’s investment principles relating to asset management and the specific flow of decision-making
procedures for the sale and acquisition of individual operating assets are as shown above.

② Compensation for Management
With regard to compensation for asset management tasks entrusted to JEAM by JEI, a managementcompensation structure linked to profits has been introduced.
Calculation method
The amount of JEI’s assets under management (every 3 months) multiplied by the following
fee rates x (the actual number of days within the relevant calculation period / 365)
Asset Management
Fee I

Fee rates:• 0.25% (Assets under management: Portion up to ¥100 billion)• 0.15% (Assets under management: Portion over ¥100 billion up to ¥200 billion)• 0.05% (Assets under management: Portion over ¥200 billion)

Asset Management
Fee II(The amount of ordinary income before deducting Management Fee II + the amount ofdepreciation) x 4.0%

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③ Transactions with Interested Parties
JEAM has established its own rules with regard to sponsor-related parties, which refers to: 1)
interested parties as defined by the Investment Trust Act, 2) shareholders with a stake of 10% ormore in JEAM and JEAM shareholders Daiichi Building Co., Ltd. and Sohgo Housing Co., Ltd., and3) special purpose companies in which parties corresponding to 1) and 2) above have a 50% stakeor more, an anonymous partnership stake, or a preferred equity investment, including special
purpose companies and limited companies under the Act on the Securitization of Assets (Act No.
105 of 1998 and subsequent amendments). These rules stipulate the standards and procedures
relating to transactions with sponsor-related parties and JEAM’s internal rules for such transactions,with the purpose of appropriately managing JEI’s assets by eliminating conflicts of interest andcontributing to the profits of JEI’s unitholders.

58(3) Compliance Structure
Fully recognizing its social responsibilities and mission as an asset management company, JEAM
views rigorous compliance as a basic management principle for the purpose of executing
management of JEI’s assets in a fair and appropriate manner.

① JEAM’s Compliance Initiatives
Based on the Compliance Manual created in accordance with compliance rules, JEAM has stipulated
the following:• JEAM’s directors and auditors shall recognize compliance as a key management issue while
executing their duties.
• JEAM’s directors and auditors shall strive to play a leading role themselves in the promotion ofcompliance and work to ensure that employees are sufficiently aware of its importance.

• The Board of Directors shall establish the necessary structure for compliance and seek to achieveand ensure compliance by promoting its practical implementation.
• JEAM’s employees shall ensure compliance while executing their duties.
• JEAM’s employees shall strive to acquire knowledge of the laws, regulations, etc., required for theirduties.
• In the event that questions arise regarding the interpretation of laws, regulations, etc., while
executing their duties, JEAM’s directors and employees shall always check with the Compliance
Officer, lawyers, etc., and shall not pursue their duties based on their own interpretation.

② Compliance Promotion Structure
Compliance With the purpose of ensuring rigorous
Committee adherence to various laws, rules, regulations,and other relevant compliance matters, theCompliance Committee discusses and makes
decisions pertaining to basic items and key
issues relating to compliance at JEAM.

Compliance The head of each division serves as aManagers
compliance manager. Their role includes
improving their division’s complianceawareness and compliance structure and, whena compliance breach occurs within their division,
handling the initial response, reporting to theCompliance Officer, investigating and identifying
the cause, and providing instructions regarding
considerations and measures to prevent
recurrence.
External
Experts

The Board of Directors appoints individuals whoare qualified lawyers, certified public
accountants, real estate appraisers, etc., asexternal experts. Compliance Committee
resolutions will not be adopted unless approvedby external experts.
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Flow of Decision-Making of
the Asset Management Company
Revision, Resubmission, or discard

Compliance Dedicated exclusively to compliance tasks, theOfficerCompliance Officer is an independent position
that is not part of any other department. The
Compliance Officer is in charge of allcompliance-related planning and promotion, as
well as Compliance Committee proceedings.

Draft plan
Approval

Compliance Officer

Compliance Committee

Investment Committee
ReportBoard of Directors

JEI Board of Directors

③ Implementation of Compliance Training
At JEAM, the Compliance Officer periodically provides compliance training for all directors andemployees. A verification test is implemented at the end of the fiscal year, with the aim of fostering
greater compliance awareness.

Implementation Status of Compliance Training

Number of compliance training sessions provided
Ratio of directors and employees who received compliance training(including contract & temporary workers)

FY2020

FY2021

FY2022

FY2023

12

12

12

12

100%

100%

100%

100%

④ Prevention of Transactions with Anti-Social Forces
In addition to creating a Compliance Manual which provides guidelines for action for the purpose ofachieving compliance with laws and regulations, JEAM is striving to eliminate transactions with antisocial forces by formulating basic principles and specific standards of conduct in order to prevent
harm from anti-social forces.

➄ Prevention of Bribery and Corruption
In its Compliance Manual and Rules on Entertaining and Gift Giving, JEAM prohibits all forms of
misconduct including bribery, money laundering, and insider trading, clarifying actions that areprohibited and matters to be observed, such as prohibition on the giving and receiving of excessive
gifts or entertainment, the receiving or giving of bribes in any form, and providing, offering, or
promising to business partners any wrongful profits. JEAM’s officers and employees, including
contract and temporary workers, are all thoroughly informed of these prohibitions and related
matters through opportunities such as compliance training.
The Compliance Officer, which is an independent department conducts internal audits on thecompliance system of corruption prevention and on the operation of this system. Through continued
monitoring, the Compliance Officer checks if day-to-day business execution is conducted
appropriately, including the recognition of misconduct risks such as the giving or receiving of bribes.
In addition, several compliance help desks are established where suspicion of wrongdoing can bereported officially and anonymously to prevent the occurrence of corruption. The monitoring situation
and audit results are reported to and shared with the Compliance Committee and the Board of
Directors to create a system that can evaluate and review the prevention structure.
Upon detection of a compliance violation such as the giving or receiving of bribes, a fact-finding
investigation will be conducted under the supervision of the Compliance Officer and its findings will
be reported to the President & CEO, Compliance Committee, and Board of Directors. If thesuspected violation is confirmed as a fact, speedy actions and correction measures will be taken,
together with the consideration and implementation of recurrence prevention measures, which will
be reported to the Board of Directors. An employee who has committed any misconduct will bestrictly punished in accordance with the employment rules.
During FY2023, there were no cases of bribery or corruption detected, no payment offines/monetary penalties, and no employees punished or discharged for bribery or corruption at
JEAM.
Furthermore, JEAM has made no political donation thus far.

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⑥ Whistleblower System
To promptly detect and rectify misconduct, JEAM has a whistleblower system that enables all its
officers and employees (including contract and temporary workers) to anonymously report on actsthat are problematic in terms of compliance, such as acts in violation of laws and regulations,
corporate ethics, and internal rules.
As contact points to receive consultations or reports, JEAM has designated the Compliance Officer
as an internal contact and external lawyers and Group companies’ help lines as external contacts toreceive consultations and reports by telephone, email, and other means. JEAM ensures that its
officers and employees know how to use the help line by including it in compliance training.
When a report is received, the Compliance Officer and the investigation team conduct aninvestigation while taking into consideration the anonymity and privacy of the whistleblower and theparties involved. In the event that any violation of laws and regulations is found through theinvestigation, JEAM will respond appropriately based on its employment rules and take corrective
and recurrence prevention measures. Information obtained from a whistleblower will only be sharedwith people involved in the investigation so that it is impossible to identify the whistleblower and no
disadvantage will be imposed on the whistleblower.
JEAM protects whistleblowers and other concerned parties through its Whistleblower Protection
Rules (based on the Whistleblower Protection Act of Japan) which: prohibits the dismissal of thewhistleblower and any other disadvantageous treatment of the whistleblower due to the act ofwhistleblowing; requires the strict treatment of officers or employees who probe to identify thewhistleblower or who commit an act of harassment or retaliation in response to the act ofwhistleblowing; and bans seeking compensation from the whistleblower on the ground of damage
incurred to the company due to the act of whistleblowing, among other things. In addition, JEAM
notifies all its officers and employees through internal training that such acts of causing
disadvantages to the whistleblower are subject to disciplinary actions.

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3. Risk Management
JEI and JEAM strive to reduce risk and handle any risks that occur in an appropriate manner throughthe implementation of the following systems.

(1) JEI’s Risk Management System
JEI holds Board of Directors meetings at least once every three months. At these meetings, in addition
to the matters for approval stipulated by the law, the Board receives detailed reports on JEI’s
operations and the execution of JEAM’s duties.
Via this reporting procedure, the supervisory directors, who are independent of JEAM or related
interested parties, obtain accurate information and a system is maintained that enables monitoring ofexecution of the executive director’s duties. At the same time, based on the relevant reports, JEI
strives to manage risks relating to conflicts of interest, etc., by verifying whether there is any concern
about conflicts of interest in JEAM’s transactions with sponsor-related parties.
Under the terms of its asset management outsourcing contract, JEI is entitled to receive various
reports from JEAM and to investigate JEAM’s books and other documents. By exercising these rights,
JEI maintains a system that enables monitoring of JEAM’s execution of its duties.

(2) JEAM’s Risk Management System
Based on the asset management guidelines and so forth, JEAM leverages the collective capabilities ofthe sponsor companies, pursues portfolio management aimed at achieving stable profits and growth,and has created specific investment criteria, holding period and disposal policies, property
investigation (due diligence) standards, property operation and management policies (including aleasing and management plan, property management policies, leasing policies, and insurance
policies), and financial policies.
It strives to reduce real estate-associated risks through compliance with the relevant asset
management guidelines, etc.
It also pursues clear decision-making processes for key matters relating to asset management, and it
works to reduce risk by creating work manuals relating to real estate investigation, acquisition,
management, operation, and other tasks.
Moreover, based on risk management rules, JEAM has established risk management indicesaccording to the characteristics of various risks and monitors changes in them, reports to the Board of
Directors on a regular and as-needed basis, and has implemented a verification system in which
personnel from outside the sales department check the validity and effectiveness of businessprocedures in decision-making processes for key matters relating to real estate acquisition, disposal,
operation, and management.
In October 2022, climate change risks were incorporated into the above risk management framework.

4. Information Security
JEAM has created information management rules, and recognizing that information and information
handling security is an indispensable element when using information, it promotes continuous
development and seamless execution of operations by pursuing information security improvement. It
implements the measures required to protect information assets from being destroyed, modified, or
leaked against the company’s wishes, whether by intent or by accident. Specifically, it implements thefollowing measures:• Specifying the location and type of information to be managed• Establishing a system of checks and balances• Implementing a security management system• Access control• Implementing crime prevention measures, disaster prevention measures, measures to prevent
unauthorized use, and backup measures
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Initiatives for
Unitholders andInvestors

VI. Initiatives for Unitholders and Investors
To provide unitholders both in Japan and abroad with a better understanding of the investment
corporation’s characteristics, investment policies, growth strategy, etc., JEI and JEAM take advantage
of various opportunities to share information and proactively work to build a relationship of trust withinvestors by providing venues for offering explanations to them directly.

1. Policy for Customer-Oriented Business Conduct
Viewing JEI and JEI’s unitholders as its own customers, in December 2017 JEAM created andannounced the following Policy for Customer-Oriented Business Conduct for the purpose of achieving
operations and management that focus on customers’ needs. Furthermore, it revises its policies as
required in order to achieve more effective business operations.

① Pursuing Customers’ Best Interests
As a financial business, JEAM maintains a high level of expertise and professional ethics and conducts
business with customers in a fair and sincere manner with their best interests in mind. It also strives toinstill this management approach within its corporate culture.

② Appropriate Handling of Conflicts of Interest
In accordance with the laws, internal rules, etc., JEAM accurately assesses the possibility of conflicts ofinterest in transactions with customers, and in cases where such a possibility exists, it manages thesetransactions in an appropriate manner based on methods such as obtaining the approval of theCompliance Committee before proceeding with the transaction and having the Investment Committee
discuss it and pass a resolution.
In the Rules for Transactions with Sponsor-Related Parties, JEAM has stipulated restrictions ontransactions between JEI and sponsor-related parties in which JEAM or JEI has designated interests.
For example, for certain transactions such as the acquisition of properties from sponsor-related parties,
the rules stipulate that the Compliance Committee must discuss adherence to the laws, regulations, etc.,
and whether there are any other compliance-related issues and approve the transaction in advance.
The committee’s members include one external expert such as an attorney, and the agreement of thisexpert is required in order for the committee to approve a transaction.
JEAM has created a system in which the external expert is granted strong authority to ensure checks
work well.

③ Clarification of Fees, Etc.
JEAM provides information that lets unitholders know the details of the fees, etc., paid by JEI.
Among these, asset management fees paid by JEI to JEAM consist of two types of fees: Type I (linked
to the amount of managed assets) and Type II (linked to profits), consequently linking to unitholders'interests.
The method of calculating these asset management fees and the payment schedule are stipulated in
JEI’s by-laws and disclosed on JEI’s website.
Moreover, the asset management fees paid to JEAM by JEI each accounting period are published in
the asset management report sent to all unitholders at the end of each quarter. This may also beviewed on JEI’s website.
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④ Making Key Information Easy to Understand
JEAM discloses accurate, unbiased key information about itself and JEI to customers in a timely andeasy-to-understand manner.
In addition to statutory disclosure and timely disclosure, JEAM voluntarily discloses information that is
considered important or useful for customers. It also strives to disclose easy-to-understand, customeroriented information by posting a wide range of information, including management policies and thestatus of finances and owned properties, etc., on JEI’s website in a timely manner.

⑤ Providing Appropriate Services to Customers
JEAM strives to understand the needs of all unitholders and manage assets with their needs in mind.
It aims to ensure stable profits and consistent growth of managed assets over the medium to long term
while giving practical consideration to environment, society, and governance (ESG) in asset
management.

⑥ Providing an Appropriate Motivational Framework for Employees
In pursuing the best interests of its customers, JEAM has developed an appropriate governancestructure and a motivational framework for employees for the purpose of managing conflicts of interestin a suitable manner.
JEAM has created a code of conduct to ensure that directors and employees always pursue customers’
best interests, and as an asset management specialist, it strives to conscientiously perform its duties
and ensure their optimal execution for the benefit of investors.
Compliance and adherence to the code of conduct is one of the items considered in employees’
performance appraisals. Furthermore, compliance-related training for directors and employees isperiodically conducted to further raise awareness of compliance.
JEAM has also established a governance structure for the decision-making process for designatedtransactions involving JEI and sponsor-related companies, which includes discussion of any legal
compliance-related issues such as conflicts of interest by the Compliance Committee, whose members
include an external expert.

Status of FY2023 initiatives:
http://www.jeam.co.jp/customer/img/file_2023.pdf (Japanese only)

List of financial companies that have announced policies based on the “Principles for
Customer-First Business Practices,” etc. (Financial Services Agency website as ofFebruary 28, 2024):
https://www.fsa.go.jp/news/r5/kokyakuhoni/202402/list_240228.xlsx (Japanese only)65

2. Information Disclosure Policy• With a view to ensuring transparency, in addition to statutory disclosure, JEI shall strive to disclose
accurate, unbiased information to investors in a timely, easy-to-understand manner, as well as
voluntarily disclosing information deemed important or useful to investors whenever possible.
• JEI shall appropriately disclose information in accordance with the details and formats required by
the Investment Trust Act, the Financial Instruments and Exchange Act, the Tokyo Stock Exchange,
the Japan Investment Trusts Association, and so forth.
• With a view to ensuring transparency, designated transactions with interested parties, as stipulated
in JEAM’s Rules for Transactions with Sponsor-Related Parties, shall be promptly disclosed using anappropriate method in accordance with the applicable laws, regulations, rules, etc.
• JEI shall strive to develop and maintain a structure for the purpose of observing the above policies.

3. Status of IR-Related Activities
Along with prompt disclosure of statutory disclosure documents to the Tokyo Stock Exchange’s TDnet,
JEI discloses a wide range of information on its website, including financial results, results briefing
Q&As, English IR materials, and financial results videos.
For each quarter’s semiannual financial results, it also holds a briefing for Tokyo-based investors, andit holds organized meetings with Japanese and overseas institutional investors.
Furthermore, it actively participates in international investors’ conferences organized by securities
companies.

66◼ The information provided in this document is not required by the
Financial Instruments and Exchange Act, the Act on Investment Trusts
and Investment Corporations, associated laws, Cabinet Officeordinances, and regulations, the Tokyo Stock Exchange’s Securities
Listing Regulations, or other related regulations, nor is it intended toconstitute an asset management report or a document disclosed basedon the aforementioned laws and regulations.

◼ This document was created for the purpose of providing informationand not for the purpose of offering, solicitation, recruitment, etc., for
specific investment products.

◼ Japan Excellent, Inc. and Japan Excellent Asset Management Co., Ltd.
do not guarantee the accuracy, completeness, appropriateness, validity,
etc. of the information provided in this document and assume no
responsibility for updating the information contained herein.

◼ Furthermore, please understand that information is subject to changeor removal without notice.

◼ It is prohibited to excerpt, duplicate, or appropriate the contents of thisdocument, either in whole or in part, without the prior consent of JEI.

67