Sustainability Report 2023
September 2023

Activia Properties Inc.

Sustainability
Introduction Policy/Structure
for Promotion

TopicsSustainability Report 2023

External
Evaluation/
International Initiatives

Environment

SocialGovernance

ESG Data

Table ofContents

Table of Contents
Introduction••

Top Messages
About API

Social3
5

Sustainability Policy/
Structure for
Promotion
Our Structure to
Promote Sustainability• Materiality• API’s Initiatives
•

10
12
13

Topics15

External Certifications/International Initiatives

17

Environment•••

Addressing Climate Change
Environmental Consideration in Real
Estate Investment
Urban Greening and Biodiversity
Transition to Renewable Energy
Measures Taken in Owned Properties

•
•
•
•
•

Environmental Performance
31
Green Building Certifications
32
Initiatives with Suppliers and Tenants 34
Environment Management System
35
Sustainable Finance
36

•
•

20
26
27
28
29

•
•
•
•
•
•
•

Stakeholder Engagement
39
Contribution to Local Communities 40
Tenant Engagement
42
Supplier Engagement
43
Initiatives toward Unitholders andInvestors
44
Employee Engagement
45
Human Rights and Labor Policies 51

About This Report
Activia Properties Inc. (“API”) and TLC REITManagement Inc. (“TRM”) to which API entrusts the
management of its assets, are making the best effort
to disclose information related to the sustainability
initiatives to the investors and other stakeholders.
Within this scope, this report is issued to illustrate theESG (E: Environment, S: Social, G: Governance)
initiatives of API and TRM which are essential tocontribute to a sustainable society.

Governance
•
•
•
•
•

API’s Corporate Governance
54
TRM’s Corporate Governance
56
Governance Structure to Maximize
Our Unitholder Value
58
Compliance60
Risk Management64

Scope of Report
PeriodFrom April 2022 to March 2023
(excl. some data)

Entities

API and TRM

ESG Data••

GRI Index
66
Independent Assurance Statement 69

Contact
Department

Activia Management Division,
TLC REIT Management Inc.

Address

Shibuya Solasta 18th floor, 21-1
Dogenzaka 1chome, Shibuya-ku, Tokyo,
Japan

Phone

+81-3-6455-3377

Hours

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

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Top Messages
From Executive Director of API
To build a portfolio with a stable and sustainable demand from our customers, API has promoted since its IPO various initiatives to reducing ourenvironmental footprint and contributing to the surrounding communities and environment, believing that for our portfolio, those elements are
just as important as others such as the location, use, scale, and quality of properties. In recent years, events have occurred that have caused
major changes in the social environment, such as new coronavirus infections and frequent natural disasters caused by extreme weather, and webelieve that it is becoming increasingly important to create a sustainable society.
Under such circumstances, in July 2019, we identified our Materiality with publicly announcing our targets in environmental performances and amore practical management policy to achieve them. To accelerate and develop its sustainability initiatives, API set a series of KPIs including
procurement of renewable energy, green bond utilization in debt finance in January 2022, and announced other challenging targets related torenewable electricity and CO2 emission in July 2022. Also, API has made public the information disclosure based on TCFD (Task Force on
Climate-Related Financial Disclosures) recommendations and is largely promoting its effort toward environment.
Since 2013, we are participant to the GRESB Assessment, an ESG benchmark in the real estate sector, and are using the results to continuously
improve the effectiveness of our initiatives.
API will further develop its efforts on sustainability, deepening a trustworthy relationship with the stakeholders while investing in and managing
real estate capable of sustaining customer demand and gathering people, seeking to become an entity capable of broadly energizing society as
the name “Activia” suggests.
I hope this Sustainability Report will provide you with a broader understanding of API’s sustainability initiatives and we will continue to work
together with you on social issues.

Nobuhide Kashiwagi
Executive Director
Activia Properties Inc.
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From President & CEO of TRM
TLC REIT Management Inc. (“TRM”) is an asset management company aiming to maximize its shareholder value with a philosophy that weshould contribute to the development of our society through a reliable relationship with all the stakeholders.
The importance of responding to environmental issues caused by climate change, reforms in work styles, and the relations with local communities
to create a sustainable society is increasing. TRM shares the TFHD Group's Sustainability Vision "to solve social issues through our businessactivities and achieve a sustainable society and growth together with our stakeholders" and promotes various initiatives based on the recognition
that the promotion of strategic corporate ESG (Environmental, Social, and Governance) initiatives contributes to the enhancement of corporate
value.
In April 2019, the “Sustainability Policies”, basic policies to contribute for a sustainable society, was established, which can be regarded as amilestone in our efforts toward sustainability. Further in July same year, TRM identified the Materiality, the mid- to long-term material issues tobe addressed by the company and has implemented different efforts including preparing internal systems.
Recently, TRM has strengthened its supportive stance toward international initiatives, as represented by the signatory to PRI (Principles for
Responsible Investment) in December 2021, and its endorsement for the recommendations of TCFD from January 2022.
In recent years, we have adopted a policy of realizing human capital management based on respect for human rights, considering perspectives
such as diversity, fairness, and inclusiveness, and we are also focusing on maintaining a resilient management system that can respond tomultifaceted social demands. We are also working to build a system to resolve issues through cooperation with TFHD group companies.
TRM, along with API, will continue to sincerely work on the targets set in line with our Materiality such as reduction of environmental impact, withmaking appropriately disclosure on our visions and achievements to our stakeholders to develop a further trustworthy relationship with you all.

Akira Kubo
President & CEO
TLC REIT Management Inc.
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About API
Structure
API is a diversified J-REIT investing in commercial properties
and offices sponsored by Tokyu Land Corporation (“TLC” or the“Sponsor”).
API intends to maintain a competitive portfolio in the medium tolong term with the objective to maximize its unitholder value, byinvesting primarily in urban retail properties and Tokyo officeproperties with making these investments upon carefulconsideration of location, size, quality, specifications, andsuitability for use by tenants.

(Note) Yonosuke Yamada resigned as supervisory director on September 7, 2023 dueto the expiration of his term of office; Kazuhiko Takamatsu, who was elected assupervisory director at the Unitholders’ Meeting held on August 17, 2023, was newly
appointed as supervisory director as of September 8, 2023.

Asset Manager (TRM)

REIT (API)Name

Activia Properties Inc.

Name

Executive Director

Nobuhide Kashiwagi

President & CEO

TLC REIT Management Inc.
Akira Kubo

Address

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

Address

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

Contact

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

Capital

200 million yen

Securities Code
Listed Date
Fiscal Period End

3279
June 13, 2012
May 31 and November 30

Shareholder
Business Segment
Fiscal Year End

Tokyu Land Corporation (100%)
Investment management
March 315

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ESG Data

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

By Category

Urban Retail
Properties

Tokyo Office
Properties

Activia Account
Properties

RetailOfficeRetail+OfficeUrban Retail Properties
that are easily recognized
and located either near
major train stations or
popular areas in Tokyo,
government-designatedmajor cities within Japan’s
three major metropolitan
areas and other major
cities in Japan

Office properties within the
23 wards of Tokyo in areas
with a high concentrationof offices and located near
major train stations

To enhance the stability
and profitability of ourportfolio, we rigorously
select commercial facilities
other than Urban Retail
Properties and officebuilding other than Tokyo
Office Properties,
assessing the attributes
and competitiveness ofeach property

Investment
ratio(Acquisition
price basis)70% or more

30% or less

TO 52%

By Area

UR 29%

RetailOffice 37%
63%

AA 19%

重点投資
Core asset
対象資産比率81％

Nb. ofproperties

46
properties

Other major
Three cities of Japan2%
metropolitan
areas
27%
Other wards
6 centralof Tokyowards of
Tokyo
2%
69%

AUM

¥

546.1bn(Acquisition price basis)(Note) As of June 1, 2023

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Tokyu Fudosan Holdings Group’s value chain
TRM, to which API entrusts management of its assets is
one of the member companies of Tokyu Fudosan Holdings(“TFHD”) Group (or the “Group”), a comprehensive realestate developer. We take advantage of the TFHD Group’s
multi-faceted and comprehensive knowhow and value chain
to consistently acquire high-quality properties, as well as tooperate and manage the properties so that the value of theproperties would be maintained and improved. By doing so,
we plan to maximize the unitholder value. While leveraging
the value chain of TFHD Group, we also try to ensure andenhance various systems supporting our strong governancestructure in order to maximize our unitholder value. The
measures include preventive system against conflict ofinterests in related-party transactions, alignment ofinterests between investors and the Sponsor, as well as
amendment to the asset management fee structure
including DPU-linked portion. (Cf. page 58)

Sourcing from TFHD Group(As of June 1, 2023)

89.2％

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

Sep. 7, 2011

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

Sep. 20, 2011

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

June 13, 2012

Listed on the J-REIT section of the Tokyo Stock Exchange(securities code: 3279)

Trend in number of properties and assets under management
42
39

27

Nb. ofproperties

18

18

20

1,813

32

39

35

44

44

44

47

47

5,480 5,480
5,005 4,990 5,092

4,315
4,079

44

5,092

46

47

5,424 5,484

45

5,092

4,315

35

4,079

3,569
3,267

21
2,826
2,310

1,704 1,704
AUM（¥100 mn）

28

30

31

42

45

2,929

25

2,417

1,843

15

5

(5)
12.5 12.11 13.5 13.11 14.5 14.11 15.5 15.11 16.5 16.11 17.5 17.11 18.5 18.11 19.5 19.11 20.5 20.11 21.5 21.11 22.5 22.11 23.5

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Initiatives of API and TRM at a Glance
Since its IPO, API has actively promoted initiatives toward a sustainable society in cooperation with TRM, includingorganization of TRM’s internal system allowing to further develop ESG initiatives.
2022/1-7
2017/92019/7GRESB Real Estate
Assessment:
Recognized as
the Asia Listed Office& Retail Sector
LeaderSet environment
KPIs

Identified Materiality

・Greener portfolio
・Sustainable financing
・Procurement of
renewable energy

Environment
・Reduce environmental
impact2023/5MSCI ESG Rating
Upgraded to BBB

2022/10GRESB Real Estate
Assessment: Received 5 stars
for 5 consecutive years andranked top among Japaneselisted participants (office) for
disclosureAPI2023/7Developed disclosure
based on TCFD
proposals

2019/8Governance・Management framework
corresponding to multifacetedsocial demand towards
sustainable society

2016/12

BecameGRESBParticipant

TRM

UN Global Compact
Signatoryby Sponsor Group

2019/2

Rebalanced the asset
management fee
2021/6(Lowered total assetbased fee and increased
DPU and NOI-based fee） Released inaugural
Sustainability Report

Net-zero policy/Addressing
Physical risks

2022/12
Issued the fifth
green bonds

2022/1Social・Human capital development
as a group of professionals
・Contribution to local
communities
・Health and well-being of
tenants
・Supplier Engagement

2021/12
Became signatoryof PRI (Principles
for Responsible
Investment)

Support of TCFD (Task
Force on Climate-related
Financial Disclosures)2019/4

2016

2017

2018

2019

2020

・DE&I (Diversity, Equity andInclusive)
・Human capitalmanagement
・Supply chain management,etc.

Signature to the
Principles for
Financial Action forthe 21st Century

2023/4

Net-zero commitment

2021/42023/7

Organized Sustainability
Promotion Council andestablished Sustainability
Department

EstablishedSustainability
Policies

Enhanced Materiality(core issues)

Amendment to the
Climate Action
Standard

2020/9Established Green
Procurement
Standards

2023/22023/4

2021

Participation to the TFHD
Group’s consultative
meeting

2022

2023

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

Our structure to promote Sustainability
To enhance TRM’s efforts towards theissues related to environmental or
societal consideration, etc. based on its
Sustainability Policies, the rules on the
Sustainability Promotion System requirethat the President & CEO to be the Chief
Sustainability Officer and eachdepartment appoint one responsible
person from the department. The
Sustainability Promotion Council is to beheld with the President & CEO as
chairperson. Sustainability Department
was established as of April 1, 2021 toexpand the functionality of the
Sustainability Promotion System. The
Sustainability Department succeeds the
ESG-related missions from theEnvironmental Engineering Department,
and we will further promote oursustainability program.

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Environment

Sustainability Promotion
Council
The Sustainability Promotion Council
meets regularly with President & CEO as
the Chief Sustainability Officer who
assumes the ultimate responsibility, andother members from across theorganization of TRM and among members,
we share relevant information andexamine and promote the efforts. External
experts are invited to the Council toconsult opinions when needed. Matters
discussed at the Council are regularly
reported to the Board of Directors of TRM
and, when necessary, to the Board of
Directors of API.

Members of the Sustainability
Promotion Council

Meeting frequency

Main issues to be discussed

SocialGovernance

ESG Data

Table ofContents

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

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Materiality
In line with the Policy and as a member of the Group, TRM recognizes the materiality issues of the Group and identified its own materiality issues
by extracting societal items which are important over the medium to long term for a sustainable society, with consideration to the environmental
efforts API has already made. This Materiality is shared between TRM and API. Risks and opportunities related to each materiality are reviewed ona regular basis, and newly identified risks and opportunities are indicated in red.
Materiality

Risks（Impact of not addressing materiality)

Opportunities（Business opportunities expected byaddressing materiality）

Reducing
environmental impact

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

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

Human capitaldevelopment as agroupof professionals

Failure to implement a human resources strategy that is based on
respect for human rights and that takes into account theperspectives of diversity, equity, and inclusion, or lack of sufficient
skilled resources may hinder business operation, leading tostagnant or lower investor values

Each employee’s effort to further realize their abilities andmaintain mental health and stable living while fulfilling thefiduciary duty required of asset management business andworking towards our goal of maximizing unitholder value
and enhancing our presence, as we implement humancapital management, will create a positive cycle andimprove our performanceContribution to the
local communities

・ Breakdown of communication with local community at the timesof emergency such as disaster may cause reputation risk
・ Risk of loss of liveliness due to the image of the invested region
becoming obsolete or due to population decrease

Show presence by contributing to the safety and security of
the region and vitalization of local economy as a member ofa corporate group committed to urban development

Health and well-beingof tenants

Facilities with inferior ESG considerations may have risk of losing
support from tenantsContract renewal and repeated selection for relocation bytenants can be expected by creating safe, comfortable andpleasant space for tenants

Supplier engagement

Impact on management operation and deteriorated credit in caseof significant violation against sustainable procurement such as
discrimination, exploitation, destruction of nature, contaminationand violation of laws by suppliers are recognized

Collaborate with suppliers to make transactions that take
into consideration human rights and satisfy fiduciary duty
required of asset management business and contribute to
becoming the REIT of choice by the investors

Inappropriate response to multifaceted social demands may risk
fail in trust concerning sound and effective management businessand affect market development

Enhanced commitment from the perspective of respecting
human rights to environmental issues including climatechange and social issues such as human capitalmanagement and supply chain management will further
promote establishment of medium- to long-term businessplatform, and improvement in financial value can be
expectedManagement
framework
corresponding tomultifaceted social
demand towards
sustainable society

Relevant SDGs

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API’s Initiatives
Based on the recognition that the realization of a sustainable society is essential for API‘s sustainable growth, API believes that contributing to theresolution of social issues through its business will contribute to its medium- to long-term growth and ultimately increase unitholder value. The
policy and status of the initiatives newly formulated in conjunction with the review of the materiality are shown in red.
Materiality(Environment）

Reducing environmental impact

PolicyKPIStatus/Examples・ Energy use: Medium- to long-term target of 1% average annual reduction inenergy use intensity
・ Energy-related CO2 emissions: 100% reduction of CO2 emissions generated byelectricity by the end of March 2026, relative to a FY2015 baseline**Excluding co-owned, sectionally owned, and land-only properties that have notinstalled renewable electricity
・ Water conservation: Medium- to long-term target of 0.5% average annual
reduction in water use intensity
・ Waste generation: Medium- to long-term target of 0.5% average annual
reduction in waste intensity
・ Climate change response: Implementation of initiatives addressing climatechange and disclosure of information pertaining to climate change response andinitiatives【Renewable Energy Procurement】
・ Complete transition to renewable electricity in all portfolio properties by theend of March 2026**Excluding co-owned, sectionally owned, and land-only properties that have notinstalled renewable electricity【Portfolio Greening】
・ 70% or more green-certified assets by 2030
・ Promote green leases for 100% of new contracts【Sustainable Finance】
・ 100% of new investment corporation bond to be green bonds**On the condition of issuance based on the issuance within current framework
・ Consider diversification of sustainable finance methods
・ Proactive introduction of environmentally friendly facilities and technologies
・ Periodic measurement of environmental performance of the portfolio
・ Periodic measurement of environmental performance of each property
・ Constant acquisition of environmental certification , etc.
・ Promotion of tenant engagement through green leases, etc.
・ Periodic and continuous monitoring by Sustainability Promotion Council
・ Promotion of environment-friendly procurement through the Green
Procurement Standards
・ Supporting initiatives that are in line with TCFD recommendations throughclimate action standards

Human capital development as a group of professionals

Policy・ Promote human resource strategy that indicates the requirements of desirable
resources and facilitate development
・ Commitment to health and well-being of each employee
・ Deployment of measures based on TFHD Group‘s KPIs (work-style reform,
promotion of diversity)

Status/Examples・ Disclosure of key employee data to present our human resources strategy andstatus of efforts on employee health and well-being (ratio of female employees,
number of female directors and managers, turnover ratio, stress checkparticipation ratio, etc.)
・ Support acquisition of business knowledge, skills, qualifications, and implement
various trainings
・ Promote career development through periodic performance
evaluation/feedback
・ Periodic Health Committee
・ Introduction of various support systems leveraging on Tokyu Group
membership, etc.

Contribution to local communities

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

Health and well-being of tenants

7.3

Relevant
SDG targets

By 2030, double the global rate of improvement in energy
efficiency
12.5 By 2030, substantially reduce waste generation throughprevention, reduction, recycling and reuse
12.8 By 2030, ensure that people everywhere have the relevant
information and awareness for sustainable development andlifestyles in harmony with nature

Materiality(Social)

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

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Supplier Engagement

PolicyStatus/Exa
mples

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

SocialGovernance

ESG Data

Table ofContents

Materiality
Management framework corresponding to multifaceted social demand towards(Governance)sustainable society

Policy・ Explicitly describe statement on governance of the investment corporation
・ Explicitly describe the investment decision making body, as well as the risk
management system for investment management
・ Establish framework for promoting implementation of the Sustainability Policy
・ Implement human capital management and maintain a resilient management
framework

Status/Examples・ Governance of the investment corporation
・ Investment decision making body and the risk management system forinvestment management
・ Establishment of Sustainability Promotion Council for the Asset Manager
・ Promotion based on various rules, etc. as well as training which attempt to
respond to multifaceted issues including respect for human rights
・ Establishment of a framework for management of the overall supply chain

11.3

Relevant
SDG targets

By 2030, enhance inclusive and sustainable urbanization andcapacity for participatory, integrated and sustainable humansettlement planning and management in all countries
12.8 By 2030, ensure that people everywhere have the relevant
information and awareness for sustainable development andlifestyles in harmony with nature

Environment

Relevant
SDG targets

12.8 By 2030, ensure that people everywhere have the relevant
information and awareness for sustainable development andlifestyles in harmony with nature
16.7 Ensure responsive, inclusive, participatory and representativedecision-making at all levels

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TopicsProgress on Environmental KPIs
We are steadily working toward the environmental KPIs established in January and July 2022 to accelerate and further progress our efforts to
reduce our environmental impact. As of the end of May 2023, we have already achieved and maintained the KPIs for the ratio of green building
certification, the ratio of green lease contracts, and the ratio of green bonds.

KPI

Renewable energy procurement

Greener portfolio

Sustainable financing✓ Transition to renewable electricity inall portfolio properties by the end of
FY2025 (Note)✓ 100% reduction of CO2 generated byelectricity by the end of FY2025,
relative to FY2015 baseline (Note)✓ 70％ or more green-certified
assets by 2030
✓ Promote green leases for
100% of new contracts✓ 100％ of new issuances ofinvestment corporation bonds
to be green bonds (Note)✓ Consider diversification ofsustainable financing methods(Note) On the condition of issuance based on the current framework(Note) Excluding co-owned, sectionally owned, and land-only properties thathave not installed renewable electricity

Renewable
electricity
utilization rate
in portfolio(Note) Estimated based on
FY2022 electricity consumption

Progress

31%

Number ofproperties using
renewable energy
at end of May 2023

13

31％
GFA
22％

2022.11

Green-certified
assets2023.513

5at end of May 2023

Green lease ratio(FP23 ended May 2023)

New green leases
contracted in
FP ended May 2023

2022.11

71%
35
100%
38

Green bond ratio inbond issuanceafter KPI setting
Issuance
capacity

100%¥

83.0bn2023.515

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MSCI ESG Rating Upgrade
The MSCI ESG Rating is one of the four domestic equity ESG indices used by
the GPIF (Pension Fund Management Inc.) and is used for the MSCI JapanESG Select Leaders Index, which also includes J-REITs, API has been
participating in this evaluation since 2017 and was upgraded from BB to
BBB in May 2023.

MSCI ESG Rating history
AAA

Environment

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Participation to the project “Zero Single-Use Umbrellas by2030 for office”
TRM has joined as a partner company in a new initiative to expand theinstallation of umbrellas in office buildings and other locations in a project
launched by Aikasa, Japan's first umbrella sharing service, with the aim ofeliminating the disposal of single-us umbrellas by 2030. To further promote
this system, in which users borrow durable Aikasa’s umbrellas at train
stations and in the city and return them to the nearest umbrella spot when
it stops raining, TRM is working to install spots at API-owned properties.

AA

8

A

BBB

6

BB

B4

B

BB

BB

BB

May-20

Apr-21

Mar-22

BBB

CCC

2
CC

Mar-20May-23Signature to Principles for Financial Action for the 21stCentury
The "Principles of Financial Behavior for the Formation of a Sustainable
Society (the Principles of Financial Behavior in the 21st Century)" isestablished as an action guideline for financial institutions that want to fulfill
the responsibilities and roles necessary for the formation of a sustainable
society in October 2011.
TRM has become a signatory to the Principles for Financial Action for the
21st Century (PFA21) in February 2023.

ESG Assessment in Real Estate Acquisition Due Diligence
Starting in fiscal year 2023, TRM will begin conducting due diligence on realestate acquisitions, using its own checklist to examine the status of ESG
initiatives, including the acquisition of environmental certifications, theintroduction of equipment and facilities that reduce environmental impact
such as energy conservation, the management of environmental values,and contributions to the local community. The survey was initiated using an
original check sheet.

Green bond issuance
API aims to further promote its sustainability initiatives through issuance ofgreen bonds and invite new investors to its investment corporation bonds
by stimulating their demand who have interest in ESG investment. With
recent issuance of 2.0 billion yen, API has raised a total of 19.4 billion yenof green bonds since the first issuance in July 2019.

Free seating in TRM’s office
In 2021, TRM's "New Work Styles Project," agroup of in-house volunteers, discussed new work
styles in light of the impact of the new coronavirus
and social changes, and made a series of
proposals to management. As one of the results ofthe project, TRM changed the layout of theworking area in the office and introduced a groupaddress system (free address system for eachdepartment) in the spring of 2023.(p.48)

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International Initiatives

Environment

SocialGovernance

ESG Data

Table ofContents

External Evaluation / International Initiatives
External Evaluation
Other

GRESB
API was awarded the highest rank “5 stars” for a 5th consecutive year on
GRESB Real Estate Assessment, an overall evaluation of ESG consideration
performance. API also received a recognition of “Green Star” for 9
consecutive years for its advanced framework and practices. Further, itachieved “A rank” in the GRESB Public Disclosure for 5 consecutive years
and ranked top among Japanese listed diversified (office/retail) participants.

API was rated “Low Risk” on the Sustainalytics
ESG risk assessment in September 2020 and has
obtained a "BBB" rating in the MSCI ESG ratingused for the "MSCI Japan ESG Select Leaders
Index," which is the index used for ESG
investment by the GPIF (Pension Fund
Investment Management Inc.).

5 stars for fiveconsecutive
years

Green Certification of owned properties

Globalrating

For the green certifications acquired by the properties owned by API,please refer p.32.

Publicdisclosure

Highest A level for fiveconsecutive years
Highest among
Japanese listed
participants (office)Considering the need to address the increasing significance of ESG as an
asset management company in the investment management industry, TRM
became a GRESB Real Estate Company & Fund Manager Member in 2019.
As a member of a global initiative, we will network and share information
with leading companies in the area of ESG and participate in activities such as
introduction of Japanese cases to the world, to improve sustainability.

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International Initiatives
Signature to UN Global Compact（UNGC）
UN Global Compact is a voluntary effort by corporations and organizations toparticipate in creation of global framework to realize sustainable growth.
Corporations and organizations that joined UNGC continue their efforts torealize the ten principles regarding protection of human rights, elimination of
unfair labor, environmental preservation and prevention of corruption. TFHD
Group has joined the UNGC in December 2016, and as a member of theGroup, TRM supports the ten principles of UNGC. (cf. p.60)

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

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

Signature to Principles for Financial Action for the 21st Century
For the information disclosure based on TCFD recommendations, pleaserefer p.20.

The "Principles of Financial Behavior for the Formation of a Sustainable
Society (the Principles of Financial Behavior in the 21st Century)" isestablished as an action guideline for financial institutions that want to fulfill
the responsibilities and roles necessary for the formation of a sustainable
society in October 2011. TRM has become a signatory to the Principles for
Financial Action for the 21st Century (PFA21) in February 2023.

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Environment
Our view on Environment
API considers climate change as a significant risk and identified reducing
environmental impact as part of its Materiality. Our medium- to long-termtargets are 1.0% average annual reduction in energy use intensity, and
0.5% annual average reduction in water use intensity and waste intensity.
And in July 2022, we set a new target of CO2 emissions: 100% reduction ofCO2 generated from electricity. We believe that effort to reduce
environmental impact to mitigate climate-change related risk such as
extreme climatic conditions and sea-level rise would lead to maximization of
our unitholder value. Therefore, we continue to fulfill our mission to reduce
environmental impact and provide high energy-saving performance in theowned properties.
API and TRM consider that contribution to the local communities as well asurban revitalization, with environmental consideration, throughmanagement of our properties is one of our important missions. With
regard to investment in undeveloped site (greenfield), we recognize thatact of development will have an impact on the natural environment andecosystem, and we will continue to make investment in light of such
recognition.
Addressing Climate Change
20
Environmental Consideration in Real Estate
Investment
26
Urban Greening and Biodiversity 27
Transition to Renewable Energy
28
Measures Taken in Owned Properties
29
Environmental Performance
31

Green Building Certifications
32
Initiatives with Suppliers and Tenants
34
Environment Management System
35
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Addressing Climate Change
1. How we look at and address climate change(1) Our perception of and basic approach to climate change
We are well aware that climate change is a critical issue that has a great
impact on our business activities.
The Sixth Assessment Report of the Intergovernmental Panel on Climate
Change (IPCC), published in 2021, firmly concludes that humans havewarmed the atmosphere, ocean, and land. The report attributes increases ingreenhouse gas (hereinafter refers to as “GHG”) concentrations including
carbon dioxide since around 1750 to human activities such as heavy
consumption of fossil fuels.
At the 26th United Nations Climate Change conference (COP26) also held in
2021, participating countries formally agreed that they will pursue efforts tolimit temperature increase to 1.5℃. This agreement came amid growing
awareness that limiting the increase in the global temperature to 2℃ above
levels in the Industrial Revolution, the maximum allowable level under theParis Agreement of 2015, will not preclude tremendous negative impacts.
Given the global temperature has already risen by more than 1℃, however,
we believe that achieving this target requires bold actions, including socialand structural changes.
Given such circumstances, we recognize the importance of efforts to achieve
the Japanese government’s goal of attaining net zero GHG emissions by 2050.
(“Net zero” refers to a balance between anthropogenic emissions and theirremovals. The same applies hereinafter.)
We need to adapt to emerging waves of change generated by theseincreasing impacts of climate change, more solid global frameworks forclimate change, and transition to a decarbonized society. We also need tosecure both stable earnings and steady growth in assets under management
over a medium to long term. To these ends, it is important for us to predictrisks and opportunities that climate change may present to our business, towork with our investors and other stakeholders, and to reflect such risks andopportunities in our investment strategies and property management.

TRM, to which API entrusts the management of its assets, is mindful of theneed for environmental and social considerations and strong governance.
And, as a member of the TFHD Group, TRM shares the Group’s Sustainability
Vision. The Group has a goal of net zero CO2 emissions by 2050 (hereinafterreferred to as “net zero policy”) for itself and its supply chains as one of its
climate targets.
TRM believes that addressing these needs constitutes part of its social
responsibilities and is also an avenue to practice its management philosophy.
It also believes that doing so will contribute to development of a sustainable
society. To put this belief into practice, TRM has identified material issues
under its Sustainability Policy and shares them with API. For more
information on the Sustainability Policy and the material issues, please refer
to TRM’s Sustainability Initiatives.
The escalation of climate change has a huge impact on our efforts toward“reducing environmental impact,” one of our material issues. For this reason,
we demonstrate to our suppliers our commitment to environmentally
preferable purchasing with our Green Procurement Standards (refer p.35),
established in September 2020. We join hands with our suppliers in taking
action based on mutual understanding.
To redouble its efforts to address these issues, TRM has signed on to the
Principles for Responsible Investment (PRI), joined GRESB as a member, andembraced the UN Global Compact (UNGC) in conducting business activities.

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

２． Organizational governance for addressing
climate change(1) Our structure to promote sustainability
For information on the implementation setup at TRM (including responses toclimate change; hereinafter the same), please refer to “Our Structure to
Promote Sustainability.” (p.10)(2) Sustainability Promotion Council
As part of its efforts to address sustainability issues, TRM convenes theSustainability Promotion Council regularly to share sustainability-related
information (including responses to climate change) and discuss measures totake on these challenges and implement them. The Council also monitors
progress in our sustainability efforts regularly and continuously. For more
information about the Council, please refer to “Sustainability Promotion
Council” under “Our Structure to Promote Sustainability.” (p.11)

Environment

SocialGovernance

ESG Data

Table ofContents(3) Our ISO 14001-certified environment management system
API and TRM have in place a unique environment management system(EMS) that builds on a PDCA cycle to reduce environmental impacts of theirbusiness, including the management of properties owned by API. By taking
advantage of this EMS, we have been making efforts to build up aframework to manage and promote sustainability initiatives. These efforts,
which involved holding regular divisional meetings and reporting tomanagement, and as needed, to the Sustainability Promotion Council,
eventually paid off. In April 2022, this particular EMS was certified to have
met the international standard in two categories of service: real estate
investment management and proprietary property management. For
information on how API uses the EMS in asset management, please refer
to “Environment Management System.” (p.35)(4) Climate Action Standards
For matters related to addressing climate change, TRM has in place a setof climate action standards, under which it has built its structure topromote sustainability and established an action policy that builds on the
TCFD framework. To reduce the impact of GHG emissions on climatechange, TRM, as a member of the Group, sets climate indicators andtargets under the net zero policy. For information on the management ofrisks and opportunities related to climate change, see “4. Managing Risks
and Opportunities Related to Climate Change.” (p.25)(5) Reporting on performance
For information on TRM’s structure for reporting and monitoring, pleaserefer to “Our Structure to Promote Sustainability.” (p.10)
Meeting entity

Convening entity

Meeting frequency

ESG meeting at Activia
Management Division

TRM

Three times or morea yearSustainability Promotion Council

TRM

Four times a year

TRM’s Board of Directors
meeting

TRM

Once a year
(reporting)

API’s Board of Directors meetingAPI

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３．Strategy that factors in risks and opportunities related to climate change(1) Scenario analysis assumptions
Climate change risks can be largely divided into transition risks and physical risks. API has analyzed three scenarios: 1.5℃, below 2℃, and 4℃ scenarios, using
future climate predictions announced by two international organizations*.
These scenario analyses have used two timeframes during which we will continue to be affected: mid-term (2030) and long-term (2050).
* International Energy Agency (IEA), World Energy Outlook 2022
UN Intergovernmental Panel on Climate Change (IPCC), The Sixth Assessment Report (AR6)Global outlook under 4℃ scenario
In this scenario, GHG emissions remain high due to a lack of progress indecarbonization action, resulting in more frequent natural disasters. Actions
need to be taken to address physical risks rather transition risks, which areoutweighed by the former.

Global outlook for below 2℃/1.5℃ scenario
In these scenarios, GHG emissions are curbed thanks to various
environmental regulations, and there are more ZEBs. Actions need to betaken to address transition risks rather than physical risks.

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

Type

Item

Description of
Risks and Opportunities

Category

4℃
2050

Increased pricing of GHG
emissions

Policies, Laws &Regulations
Mandates on and regulation ofexisting products and services

Technology
Transition
Risks
MarketShift to high-efficiency
properties
Increased stakeholder concern
or negative stakeholder
feedback
Changing customer behavior

物理的PhysicalリRisksス
ク

AcuteChronic

Higher efficiency due to shift to properties
with higher eco performance
Increased construction costs arising fromcompliance with ZEB-related and otherenvironmental regulations
Increased verification costs arising fromcompliance with ZEB-related and otherenvironmental regulations
Higher efficiency due to shift to properties
with higher eco performance

Increased severity of extreme
weather events
Rising mean temperatures andsea levels

Higher vacancy of properties with lower
environmental performance
Lower demand due to little shift toproperties with higher fire-resistance
Securing competitive edge by shifting toproperties with higher environmental
performance
Divestment or poor access to capital
markets

2050

2030

2050

Risk

Minor

Moderate

Minor

Moderate

Opportunity

Minor

Minor

Minor

Minor

Risk

Minor

Major

Minor

Major

Risk

Minor

Minor

Minor

Minor

Opportunity

Minor

Minor

Minor

Minor

Minor

Major

Minor

Major

Minor

Minor

Minor

Minor

Risk

Minor

Minor

Minor

Minor

Risk

Minor

Minor

Minor

Minor

Opportunity

Major

Major

Major

Major

Risk

Minor

Minor

Minor

Minor

Minor

Minor

Minor

Minor

Lower demand due to little shift toRisk
properties with higher fire-resistance
Costs incurred from the need to address
Risktorrential rain disasters, etc.
Loss of sales opportunities due to torrential
Riskrain disasters, etc.
Increased costs of air conditioning due toRiskrising temperatures
Inundation due to sea level rise

1.5℃

2030

Increased costs arising from introduction
Risk
Substitution of existing products of new technologies
and services with lower
Higher efficiency due to shift to properties
emissions options
Opportunity
with higher eco performance
Changing customer behavior

Reputation

Cost arising from carbon tax levy

Below 2℃

Risk

Moderate
Minor
Minor
Minor

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

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Both the below 2℃ and 1.5℃ scenarios entail substantial transition risks. In
these two scenarios, the introduction of a high carbon tax designed to curb
CO2 emissions in Japan is likely to mean higher operational costs stemming
from, for example, a heavier tax burden on CO2 emissions from proprietaryproperties. Stricter environmental regulations with regard to ZEBs, energy
saving standards, and the like are likely to translate into additional costs ofrefurbishments needed to comply with them.
Tighter regulations will have a tremendous impact on tenants’ choice ofproperties. It is expected that in comparing properties of different real estateagencies, demand for properties with lower energy efficiency will decline.
With an eye on a transition to a decarbonized society under the scenario of
below 2℃, API is committed to addressing these risks and maintaining its
competitive edge. To these ends, API will take a number of actions. These
include deploying renewables, switching over to LED lighting in a systematicmanner, and retrofitting its properties with more energy efficient equipment.
To make its portfolio greener, API will also increase the proportions ofenvironmentally certified properties and green lease agreements with newtenants.
Under the 4℃ scenario in which little progress will be made in
decarbonization, API expects damage to its proprietary properties due toincreased severity of extreme weather events and resultant increases inrepair expenses. It is worth noting here that API' buildings are originallydisaster-resistant and that API's investment focuses on properties in areas
resistant to inundation and other risks. With regard to chronic changes suchas rising mean temperatures, API is committed to reducing CO2 emissions
by, for example, deploying renewables and considering and replacing
existing key equipment such as electric and air conditioning equipment withmore energy-efficient equipment wherever possible when it reaches its endof life.
It is worth noting that these analyses (published in July 2023) did not findany marked changes from the previous analyses (published in July 2022) or
any matters of significant concern. It is unlikely that there will be majorchanges to the trends concerning the above scenarios. Accordingly, API willcontinue with what it has been doing.

Environment

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Table ofContents

ESG Data(4) Addressing Physical Risk
Japan is prone to natural disasters. Its geographical factors expose it toinundation and other damage due to typhoons and torrential rains.
Earthquakes are frequent as well. API has in place a structure that minimizes
such damage and enhance resiliency to intensifying disasters to reduce therisk that disasters will erode portfolio profitability. TRM has a business
continuity management (BCM) policy on crisis response and business
continuity planning (BCP) under its basic policy on risk management.
Progress in global climate change may make natural disasters more frequentand destructive. API regards an increasing financial impact of such disasters
as a major physical risk of climate change. Please see “Preparation for
Disasters” (p.41) for our preparedness for disasters.

Predicting flood risks
API keeps abreast of possible flood damage to its portfolio with the help of
hazard maps prepared by the Ministry of Land, Infrastructure, Transport andTourism and local governments. (API uses information on flood andinundation hazard areas as well as storm surge and inundation hazard
areas.) To minimize economic losses, API makes necessary Preparation for
Disasters for its properties and has a fire insurance that covers flood losses inplace for each of them.
Please check earthquake PML in “Financial Statements”.
Flood depth(m）

UR

TO

AA

Total (nb. of
building)(Note)

Over 5.0

0

0

0

0

3.0 to 5.0

0

0

2

2

0.5 to 3.0

5

9

3

17

0 to 0.5

4

2

2

8

No damage
expected

3

8

4

15

Total

12

19

11

42

(Note) Number of buildings as of November 30, 2022. Excluding properties for
sale.

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

５．Setting Metrics and Targets Related to物
Climate Change理(1) Metrics and targets
リ
API has identifiedスits metrics and targets related to climate change under theク
category of “reducing
environmental impact,” one of the material issues it
shares with TRM. For the purposes of identification, API assessed risks andopportunities presented by the impacts of climate change as well as theimportance of specific actions aimed at addressing these impacts.
API has also set out a policy for reducing environmental impact. The policy
covers four key areas: energy use, energy-related CO2 emissions, water
conservation, and waste generation. To translate the policy into specific actions,
API has set the following key performance indicators (KPIs) for climate action
under the net zero policy, which builds on TRM’s climate action standards.
These KPIs are classified into three categories, which include the existing two
categories of renewable energy procurement and portfolio greening as well as
the new category of sustainable finance, with the KPI in this category being thepercentage of green bonds.

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Renewable energy procurement
Complete transition to renewable electricity in all portfolio properties* by theend of March 2026
100% reduction of CO2 emissions generated by electricity* by the end of
March 2026, relative to a FY2015 baseline(Note) Excluding co-owned, sectionally owned, and land-only properties that have not installed
renewable electricity

Greener portfolio
Green-certified assets: 70% or more green-certified assets by 2030
Green leases: Promote green leases for 100% of new contract(Note 1) Green-certified assets refer to the properties to CASBEE Certification for Real Estate,
BELS Certification, Tokyo Low-Carbon Small and Medium-Sized Model Building, and DBJ Green
Building Certification.
(Note 2) The figure is calculated based on the gross floor areas of the properties excluding thosein which API owns only land.
(Note 3) API promotes to include green clauses in lease contracts with tenants in light of theneed for energy efficiency and environmental considerations, thus sharing with them its ideals for
improving and maintaining building-wide comfort and productivity.

Sustainable finance100% of new issuances of investment corporation bond to be green bonds(Note) On the condition of issuance based on the current framework.

(2) Progress toward targets as well as practices
API regularly discloses information on its website, etc. on environmental
performance with regard to energy consumption, CO2 emissions, water
consumption, and waste generation; environmental certifications; andenvironmental impact reducing works. It also provides relevant informationon the annual sustainability report and financial statements as part of ESGrelated information.

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Environmental Consideration in Real Estate Investment
Environmental risk assessment in acquisitions
When API is acquiring a new property, TRM conducts due diligence using
third party experts to assess environmental risks regarding toxic substances(usage/storage of asbestos, PCB, CFC, other chemical substances, soil
contamination, etc.) before investment decisions.
In addition, we use a proprietary checklist to survey the status of ESG
initiatives, including the acquisition of environmental certifications foracquired properties, the introduction of equipment and facilities that reduce
environmental impact such as energy conservation, the management ofenvironmental values, and contributions to the local community.

Urban Redevelopment
Brownfield redevelopment
Amagasaki Q’s Mall is a large shopping mall constructed throughredevelopment of a former factory site. Chemicals detected in the soil
contamination risk assessment on the site were removed by excavation
before redevelopment.

Dependence on nature and impact onurban development in the greater
Shibuya area
Quantitative analysis using expert analysis
tools shows that the biodiversity restoration
impact before and after the construction of
the sponsor's properties in the greater
Shibuya area has been positive since
FY2012. (p.27)

Asset-recycling model with TLC
As the support from the Sponsor for external growth, in addition to the"fund-recycling model" in which API acquires an asset from the sponsor
through fund procurement, API is also promoting the "asset-recycling
model" through asset replacement with the Sponsor. By utilizing theSponsor's redevelopment function, not only that the assets that API dispose
will be put back into the pipeline after redevelopment by the Sponsor, but
API also plays a part in the urban redevelopment by the Sponsor.
Fund-recycling model(asset acquisition)

Asset
acquisition

Asset-recycling model(asset replacement)

Substitute
asset

Fund

Asset
disposition

Tokyu Plaza Akasaka (disposed in October 2021)
A hotel representing the area facing the Akasaka-mitsuke intersection,
which was over 50 years old, was transferred to the Sponsor. Not onlythat the preferential negotiation rights for the new property in the eventthat the hotel will be redeveloped by the Sponsor that API has acquired
will contribute to API's future external growth, but API will also play arole in urban redevelopment as a part of the Sponsor's cyclicalreinvestment business.

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Urban Greening and Biodiversity
Initiatives towards biodiversity
Biodiversity is one of the key issues in the TFHD Group‘s environmental management. In urban areas, the TFHD Group is developing and managing real estatewith the goal of connecting greenery scattered throughout the city in a way that takes into account both people and nature.As part of these efforts, the TFHD
Group has been working with experts to disclose the dependence, impact, risks, and opportunities related to the sponsor group’s natural capital, referring to the
TNFD‘s Nature-Related Risk and Opportunity Management and Disclosure Framework Beta v0.4 issued by the Task Force on Nature-Related Financial Disclosures(TNFD). In order to disclose this information, we are working with experts to review, analyze, and organize nature-related information within the sponsor group’s
operations. Recently, a quantitative analysis was conducted on properties owned (including API-owned properties) located in the Greater Shibuya Area, thepriority area for such analysis, using the analytical tools of the experts. As a result, it was found that the TFHD Group's biodiversity restoration effects before andafter the construction of its properties have been positive since the properties developed in FY2012. The results show that the TFHD Group's efforts to secure thequantity and quality of greenery in recently completed properties, such as securing green space under various urban development programs and selecting native
species for planting, have been successful, and the sponsor group's community development has been recognized as contributing to nature positivity. In
accordance with the Group's biodiversity policy, the Group plans to continue various types of monitoring in the greater Shibuya area to determine the state ofnature with reference to the TNFD. In particular, Tokyu Plaza Omotesando Harajuku is the center of the area, and the monitoring results suggest that thegreening of the building, centered on the Omohara Forest, may be having a positive impact on the ecosystem by providing a habitat for living creatures in thegreater Shibuya area. (p.29) For details, please refer to TFHD’s TNFD Report 2023.8.25.

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External
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ESG Data

Transition to Renewable Energy
API began procuring 100% of electricity from renewable energy sources for 4 of the properties it
owns from the fiscal period ended May 2022, and as of the end of the fiscal period ended May 2023,
13 properties, or approximately 31% of the portfolio’s electricity consumption (estimated based on
actual results for fiscal 2022) (Note), were using electricity derived from renewable energy sources.
(Note). 3 of the 13 properties are powered by TFHD Group's renewable energy power plants. We
will continue to implement measures to achieve the KPI of completing the introduction ofrenewable energy power to all properties in the portfolio (Note) by the end of March 2026.
FP ended
May 2022

FP ended
Nov. 2022

FP ended
May 2023

March
2024

March
2025

March
2026

TLC started renewable energy business such as solar
and wind power generation in 2014. In 2019, it
became member of RE100* as a first Japanese realestate developer. To achieve RE100, it advanced theinitial target year to complete 100% transition of 2025
to 2022 and accelerates the initiatives toward climatechange.
*RE100 is a global initiative bringing together the world’s most influential
businesses committed to 100% renewable electricity.

TLC’s renewable energy businessFP ended Nov. 2022

FP ended May 2022

Sponsor’s initiatives（As of the end of Aug. 2023）

Co-owned by TLC

Tokyu Plaza
Omotesando
Harajuku

DECKS TokyoBeach

Q plaza
HARAJUKU

Shiodome
Building

Meguro Tokyu
Building

FP ended May 2023

A-FLAGKOTTODORI

TLC Ebisu
Building

A-PLACE
Ebisu Minami

A-PLACE
AoyamaA-PLACE
Ebisu
HigashiA-PLACE
ShibuyaKonnohCompletetransition
to renewableelectricity
in allportfolio
properties(Note)A-PLACE Kasumigaseki
Shibuya
Tokyu
Nampeidai
Building(Note) Excluding co-owned, sectionally owned, and land-only properties that have not installed
renewable electricity.

Nb. of projects: 89
Rated capacity: 1,625MW
Equivalent to power consumed
by approx.741k households

CO2 emissions reduction: 1,529,000t-CO2/year

Solar

Wind

Biomass

Solar power plant in
Ibaraki(Namegata, Ibaraki)

Wind power plant in
Hokkaido(Matsumae, Hokkaido)

Biomass power plant in
Tottori(Yonago, Tottori)

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Measures Taken in Owned Properties
Tokyu Plaza Omotesando Harajuku

Consideration to Urban Greening and Biodiversity

In the one of API’s flagship properties, various environmental efforts aretaken including CO2 emission reductions through wind-power generation,conservation of water resources as well as resource saving by using
recycling materials.

API does not invest in new development project, though in management of API’s
owned properties, we respect biodiversity through efforts toward conservation ofand improvement in ecosystem in urban greening and natural area in thepremises or neighborhood.

1

Reducing CO2 emissions

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

2Conservation of Biodiversity

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

3

RooftopgardenMeiji Jingu
Meiji Jingu Shrine
Zelkova trees
ShrineZelkova trees

For Tokyu Plaza Omotesando Harajuku, we acquired ABINC certification andconducts regular surveys of living creatures throughout the year in cooperation
with an expert in natural environment conservation, in order to monitor changes
in the ecosystem of the green space.
On the rooftop, a nature-friendly environment with water mountain for birds has
been created. A large-sized rooftop garden with tall trees, such as zelkova and
Katsura trees, in the center of Omotesando and Harajuku areas, is registered as a
“Birdpia” by the Japanese Society for Preservation of Birds. As part of a green
network consisting of Meiji Jingu shrine and zelkova trees near the property, the“Forest of Omohara” links the urban area with a natural environment that is home
to many birds and other living creatures.
Rooftop greening and wall greening are being actively introduced in several officebuildings as well.

Conservation of Water Resources

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

4

Resource Saving

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

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

5

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

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

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

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Participation to the project “Zero Single-Use Umbrellas by2030 for office”
TRM has joined as a partner company in a new initiative to expand theinstallation of umbrellas in office buildings and other locations in a project
launched by Aikasa, Japan's first umbrella sharing service, with the aim ofeliminating the disposal of single-use umbrellas by 2030. To further promote
this system, in which users borrow durable Aikasa’s umbrellas at train
stations and in the city and return them to the nearest umbrella spot when it
stops raining, TRM is working to install spots at API-owned properties.

Resource recycling program
In Tokyu Plaza Omotesando Harajuku, we collect and compost raw garbage
generated in the restaurants in the properties. Manure is utilized to growvegetables and fruits in the rooftop garden. Visitors can enjoy menus
prepared with the garden’s harvest.
We participate also in a project “Pool Project Tokyo” which collects andrecycle plastic materials in retail facilities in Tokyo and verifies recycle
system for packaging waste from clothing and apparel shops.

Environment

SocialGovernance

ESG Data

Table ofContents

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

Commercial Mall Hakata
In the renewal work of air-conditioning equipment forcommon areas and backyards, planning, procurement,
construction, and delivery were conducted to satisfy
TRM's Green Procurement Standards and the"Premium Standard Formulation Guidelines Version
1.4" set by the Ministry of the Environment and CO2
emissions reduced by 37%.
The "Premium Standard" is based on advanced
environmental performance that can be adevelopment target to promote market traction andinnovation by people and organizations pioneering inenvironmental considerations. It is a standard basedon advanced and higher environmental performancethat can serve as a development target for
manufacturers and providers of goods and services topromote and differentiate their advanced
environmental friendliness. (excerpt from the website
of Ministry of the Environment)

A-PLACE Aoyama
Electricity consumption was reduced byapproximately 50% due to the installation of LED
lighting in private areas.

Umeda Gate Tower
Water saving effect of approx. 20% from existing
fixtures by updating large urinals.

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Environmental Performance
FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

FY2022

Actual(MWh)

86,660102,039

104,804

112,120

116,744

48,774(107,339)

39,716(106,030)

39,121(103,770)

Intensity(MWh/㎡)

0.23

0.25

0.22

0.22

0.21

0.29
(0.20)

0.23(0.19)

0.23(0.19)

0.05

0.03

0.03

0.04

0.02

0.14

913

21,357

Generation
（MWh)

0.05

0.03

0.03

0.04

0.02

0.14

0.10

0.09

Purchase
（MWh)

ー

ー

ー

ー

ー

ー

913

21,357

Actual (Total)(t-CO2)

34,19737,28540,91046,172

45,347

40,683

41,18231,513

Scope 1
(direct emission)

-

-

-

-

-

1,465

1,699

1,710

Scope 2(indirect emission)

-

-

-

-

-

18,037

13,551

10,887

Scope 3(emission from tenants)

-

-

-

-

-

21,18125,932

18,917

0.093

0.090

0.087

0.089

0.083

0.116
(0.07)

0.086(0.07)

0.073(0.06)

526,515533,757

591,392

675,847

701,847

443,885

440,732

479,312

1.42

1.29

1.25

1.30

1.29

0.82

0.8

0.89

Recycled water (Grey water and drainage)
(㎡)

-

3,492

6,667

18,99230,76815,54913,29221,012

Water generation (t) (Note4)

2,824

3,209

3,665

4,262

4,367

2,899

2,558

2,652

Energy consumption
per year(Note 2)

Renewable energy（MWh）

CO2 emissions(Note 3)

Water consumption

Intensity(total/Scope 1&2)
（t-CO2/㎡）
Actual(㎡)
Intensity(㎡/㎡)(Note 1) Principally the figures shown above are the cumulative amounts of the entire portfolio (excluding those in which API owns only land) during each fiscal year.
(Number of properties: FY2015：30, FY2016：37, FY2017：40, FY2018：42, FY2019：43, FY2020 : 41, FY2021：45, FY2022 : 46)(Note 2) The figures shown are total amount of consumption fuel (gas, heavy oil, etc.), electricity and district heating / cooling of the properties.
From FY2020, the actual amounts cover the area of the properties for which API has operational control of energy consumption. Figures in parentheses include emissions by tenants, same as the previous fiscal years.
(Note 3) The factor and the method applied to the calculation are in accordance with “GHG Emissions Accounting, Reporting and Disclosure System” of the Ministry of the Environment.
Figures reported as Scope 3 fall under category 13 and are limited to the data which was able to be collected from tenants. Figures for intensity from FY2015 to FY2019 as well as those in parenthesis from FY2020 are
calculated based on the total area of the properties with reference to the occupancy. Figures from FY2020 are total of the intensity for Scope 1 and 2, calculated based on the common area of the properties.
(Note 4) Excluding waste directly generated by tenants. Figure for FY2016 excludes properties of which data were not available (Figure represents 91.5% of the entire portfolio).
(Note 5) Due to errors in the ownership percentage conversion and some of the totals for the amount of renewable energy generated and water reused through FY2021, some of the reported values in previous years' reports
have been corrected.

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Green Building Certifications
API proactively works to acquire green building certifications. In July 2022, we have set a KPI to achieve 70% or more green buildings in our portfolio (excl.
land-only properties) by 2030.

Overview of green certifications
CASBEE for Real Estate
CASBEE (Comprehensive Assessment System for Built Environmental Efficiency) is a system that
evaluates and rates the environmental performance of buildings, including aspects of environmental load
reduction such as energy saving, resource saving, and recycling performance, as well as biodiversity andindoor environmental considerations. The evaluation results are graded in four levels from B (★★) to S(★★★★★).

Green-building ratio

BELS
BELS assessment is provided under a public evaluation system, which evaluates the energy conservation
performance of houses and buildings, established by the Ministry of Land, Infrastructure, Transport andTourism. Third parties evaluate the performance of buildings based on the primary energy consumption
defined in energy saving act (Note), regardless of whether a building is new or not, and the evaluation
result is represented by a number of stars (from one "★" to five stars "★★★★★").
BELS assessment, which is the first public evaluation system specific to energy conservation performancein Japan, is expected to promote further improvements by providing appropriate information andpromoting the energy conservation performance of buildings.

71%
(35

properties)

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

(As of the end of May 2023, based on gloss floor
area)Tokyo Low Carbon Mid-to-Small Building
Tokyo Metropolitan Government Small and Medium Low-Carbon Model Buildings are small and mediumsized tenant buildings that are certified as A1 or higher in the Low Carbon Building Evaluation Index(Low Carbon Building Benchmark) published by the Tokyo Metropolitan Government in 2012, with theaim of creating a real estate market where low-carbon buildings with low CO2 emissions are evaluated.

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Certifications acquired(As of May 31, 2023)
CASBEEFor Real
EstateBELS

Tokyu Plaza Omotesando Harajuku

★★★★★

★★★★★

TO-12

Shiodome Building

UR-3

Q plaza EBISU

★★★★

★★

TO-13

A-PLACE Ebisu Higashi

★★★★

★★★

UR-5

Kyoto Karasuma Parking Building

★★★★★

TO-14

A-PLACE Shibuya Konnoh

★★★★

★★★

UR-7

Kobe Kyu Kyoryuchi 25Bankan

TO-15

A-PLACE Gotanda Ekimae

UR-8

A-FLAG SAPPORO

TO-16

A-PLACE Shinagawa Higashi

★★★★★

UR-9

A-FLAG SHIBUYA

★★★★

TO-18

Ebisu Prime Square

★★★★

UR-10

Q plaza SHINSAIBASHI

★★★★

TO-19

A-PLACE Tamachi East

UR-11

A-FLAG KOTTO DORI

★★★★

TO-20

Meguro Tokyu Building

UR-12

A-FLAG BIJUTSUKAN DORI

★★★★★

TO-21

Q plaza Shinjuku-3chome

UR-13

A-FLAG DAIKANYAMA WEST

★★★★★

TO-22

A-PLACE Shibuya Nampeidai

UR-15

DECKS Tokyo Beach

Kasumigaseki Tokyu Building

Q plaza HARAJUKU★★/★★
(Bldg.A/Bldg.B)

TO-23

UR-17

AA-2

icot Nakamozu

UR-18

A-FLAG NISHI SHINSAIBASHI

★★★★

★★★★

TO-1

TLC Ebisu Building

★★★★

AA-4

icot Mizonokuchi

★★★★★

TO-2

A-PLACE Ebisu Minami

★★★★★

AA-5

icot Tama Center

★★★★★

TO-3

A-PLACE Yoyogi

★★★★★

AA-6

A-PLACE Kanayama

★★★★

TO-4

A-PLACE Aoyama

★★★★★

AA-7

Osaka Nakanoshima Building

★★★★★

TO-5

Luogo Sihiodome

★★★★

AA-8

icot Omori

TO-7

A-PLACE Ikebukuro

★★★★

AA-9

Market Square Sagamihara

★★★★★

TO-8

A-PLACE Shinbashi

AA-10

Umeda Gate Tower

★★★★★

TO-9

A-PLACE Gotanda

★★★★

★★

AA-11

A-PLACE Bashamichi

★★★★

TO-10

A-PLACE Shinagawa

★★★★

★

AA-12

Commercial Mall Hakata

TO-11

OSAKI WIZTOWER

★★★★★

★★

AA-13

A-PLACE Shinsaibashi

#

Asset

UR-1

Table ofContents★★

★★

DBJ Green
Building#

Asset

CASBEEFor Real
EstateBELS

DBJ Green
Building

★★★★★

★★

★★

(Note 1) Luogo Shiodome has been disposed of on June 1, 2023.
(Note 2) As of September 29, 2023, updates are planned as follow.
[Recertification] S rank in CASBEE Real Estate for TLC Ebisu Building (TO-1), A-PLACE Ebisu Higashi (TO-13), A-PLACE Kanayama (TO-14), A-PLACE Shinagawa Higashi (TO-16)[New certification]Kasumigaseki Tokyu Building (TO-23) S rank in CASBEE for Real Estate★★★★★/★
(Kohnan bldg./Bank
bldg.)

★★

★★★★★

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

TFHD Group’s Sustainable Procurement Policy

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

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

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

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

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

10)Extension of the
Sustainable
Procurement Policy10)-1 Extension to business partners
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Green lease agreement
API and its tenants have concluded agreements which includes the green
clause and share the importance of preservation and improvement of the
comfort and productivity of tenants and properties. The green clausestates that they should share information and work together for green
certification acquisition, environmental target setting, response toenvironmental regulations, etc.
API and one of its tenants have signed the memorandum of understanding
on a green lease linked to refurbishment works. It stipulates that when thetenant enjoys profit from energy-saving effect of the refurbishedequipment the property owner invested in, the tenant shall return areward to the owner.
In January 2022, we have set a target of 100% green lease included in the
new lease agreements. We keep making effort to reduce environmental
impact in cooperation with tenants such as information sharing.

Environment

SocialGovernance

ESG Data

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

Act•

Management review –Evaluation and instruction forimprovement

Plan
•
•

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

Table ofContents

Check
•
•
•
•

Validation of environmental
performance
Validation of execution of environmental
practice plan
Actual vs. budget comparison
Put corrective and preventive measures
into practice

Set target for environmental
performance
Establish environmental practice
plan

Do
•
•
•

Execute plan
Recognize actual performance
Provide trainings

Acquisition of ISO14001
Examples of construction work with the introduction of Green Procurement
Standards - Commercial Mall Hakata air conditioning renewal (FP ended May
2022)
In the air conditioning renewal work for the common areas and backyard, TRM
presented its "Green Procurement Standards" to the contractor in advance andreceived technical proposals for reducing environmental concerns. emissions by
37%.(p.30)

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

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

A. Eligible Green projects
Buildings that have achieved the top two levels of one or more of the thirdparty green building certifications/recertifications listed below within 36
months prior to the payment date of green bonds or are expected to achieve
below top 2 ranks of each certifications

1. CASBEE (A or S rank)
2. DBJ Green Building (4 or 5 stars)
3. BELS (4 or 5 stars)

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

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

B. Refurbishments
Refurbishments with a primary purpose of achieving one of the targets listed
below and are completed within 36 months prior to the payment date ofgreen bonds or are expected to be completed:
1. Refurbishments with more than 10％ reduction in CO2emissions or energy consumption
2. Refurbishments with more than 10％ reduction in water
consumption
3. New achievement of the top two levels of one or more of thegreen building certifications listed in the item A or one or morelevels of star/rank improvement in such certifications

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ESG Data

Management of proceeds

Impact reporting

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

If there is unredeemed balance of green bonds, API will annually disclose thesummary, progress and levels of certifications of the Eligible Green Projects.
Additionally, API will annually provide the following indicators of the Eligible Green
Projects where API has control over energy usage: Energy consumption, CO2
emissions, water consumption, and waste generation.

Green balance sheet (as of May 31, 2023)
Total book valueof API’s portfolio

ActualScope1

Scope2

Scope3Water
consumption

Waste
generation

FY201852,171

22,614---

271,0211,994

FY201944,66918,125---22,963

58

11,077

11,828226,405

1,913

16,758233

5,320

11,205

146,773

1,128

FY2020
FY2021

Book value¥542.5bn
47 properties

Eligible Green
Projects¥220.9bn
19 properties

Energyconsumption(MWh)(Note 1)

Eligible Green Project balance sheet(Note 2)

Debts of Eligible
Green Projects(Note 3)

Eligible Green
Projects¥220.9bn
19 properties

LTV
46.9%

¥103.5bn(Note) “Eligible Green Projects as at the end of the financial period immediately preceding eachdate of bond issuance” refer to the properties having achieved the top two levels of one or more of
the third-party green building certifications/ re-certifications within 36 months prior to the end of
the financial period immediately preceding each date of bond issuance.

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

26,585(60,318)
16,261(45,435)

CO2 emissions (t-CO2)(Note 3)

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

Green bond summary
Total issued
Redemption
Interest rate Issuance date(¥ mn)
date
The 10th unsecured
investment corporation bonds(green bonds)
The 11th unsecured
investment corporation bonds(green bonds)
The 12th unsecured
investment corporation bonds(green bonds)
The 14th unsecured
investment corporation bonds(green bonds)
The 15th unsecured
investment corporation bonds(green bonds)
Total

Description

5,000

0.220%

2019/7/9

2024/7/9

Unsecured,
non-guaranteed

4,000

0.530%

2019/11/18

2029/11/16

Unsecured,
non-guaranteed

4,500

0.510%

2020/10/21

2030/10/21

Unsecured,
non-guaranteed

3,900

0.400%

2021/11/16

2031/11/14

Unsecured,
non-guaranteed

2,000

0.820%

2022/12/19

2032/12/17

Unsecured,
non-guaranteed

19,400

-

-

-

-

37

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

Stakeholder Engagement

39

Initiatives toward Unitholders and Investors

Contribution to local communities

44

40

Employee Engagement

45

Tenant Engagement

42

Human Rights and Labor Policies

51

Supply Engagement

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

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

Suppliers◆各種研修制度◆人事制度
Employees◆働き方改革
◆福利厚生◆Various
training programs◆ダイバーシティ◆Work-Life Balance◆Diversity

API
TRM

◆Joint seminars◆Local staff awards

TFHD Group’s Consultative meeting
Since July 2023, TRM has also been participating in the Sustainability
Council organized by TFHD to build a system to resolve issues throughcollaboration with TFHD group companies. This council meets regularly
and is attended by API's sponsor, TLC, as well as PM and BM.

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

Tenants◆Tenant satisfaction survey◆Cooperation with tenants◆Effort to advance
health/wellness◆Disaster prevention measures◆テナント満足度調査◆テナントとの協同促進◆健康・快適性向上への取組み
◆防災対策

◆防災対策
◆地域活動への参加
◆治安維持

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

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

In July 2023, an SDG event was held at“Omohara Forest” which recorded
approximately 1,000 visitors. “Aquaponics”,
a food production system that couples
aquaculture with hydroponics and soldgoods made from waste.

Shiodome Building
We create a community in the area through participation to the local
events. Vacant spaces of the property are offered to the “HAMASITE
Summer Festival”, a traditional summer event which is reorganized since2022 after a hiatus due to the Covid-19 pandemic and joined by various
stakeholders in the area including residents, workers, tenants, PM and BM,
etc.

Kyoto Karasuma Parking Building
In relation to Kyoto Karasuma Parking Building, we exchange with local
residents and other concerned parties through participation inneighborhood associations. Every year, we sell handmade chimaki(dumplings) and help assemble the Yamahoko float at the Gion Festival,
one of the three major festivals in Kyoto, thereby contributing tocommunity development in collaboration with the local community.

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Installation of shared cycle ports

Donation through Regional Revitalization Support Tax System

We provide space for “LUUP”, a next-generation electric bicycle sharing
service, at several of API's properties to support the spread of sustainabletransportation.

As part of the effort to the “contribution to local communities” that TRM
shares with API as one of its Materiality, it has made donations to
Hokkaido Prefecture since 2020 and newly to Kyoto City in addition in
2022, utilizing the regional revitalization support tax payment system.
Through donations, we expect to further strengthen relationship between
TRM, API and the communities, and advance our contribution to them.

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

41

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

Satisfaction survey
API makes effort to improve tenant satisfaction by regularly conducting thirdparty surveys to understand their needs and complaints.
In a previous year, the results scored low in terms of cleanliness of the officebuildings, and after providing intense training to building keepers andperforming renovation work of toilets and kitchenettes, there was asignificant satisfaction improvement in the survey held in the following year.
In the 2023 survey to office tenants, overall score improved.

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

Cooperation with tenants

＋3pt
77pt

80pt

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

Green lease agreement (cf. p.35)
2020

2023

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

Measures taken in owned properties
Perks for tenant employees working
in API’s office properties
Various perks are offered to tenant employees
such as discount coupon for the Sponsor group’scommercial facilities and hotels and organizationof some events, etc.
It enables tenant companies to enhance
employee benefits which represents anopportunity for API to be tenants’ first choice.

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

ESG trainings toward PMs
We work to foster a culture that ESG initiatives are to be taken by ourentire supply chain, not limited to the officer and employees of TRM. To
that end, ESG training sessions are organized for PMs. In FY2022, TRM
organized also virtual seminars themed ESG overview and trend, how toapproach to ESG issues of the Green Procurement Standards.

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

Cooperation through the Green Procurement Standards
TRM communicates the principle of the Green Procurement Standards (cf.
p.35) to its direct and indirect suppliers it works with, aiming to further
enhance its initiatives on a basis of mutual understanding.

ESG-related clauses in property management agreement
In principle, the property management contract includes ESG-relatedclauses such as compliance with environmental laws and regulations.

Monitoring and evaluation of ESG initiatives of property
manager
In accordance with TRM’s outsourcing and evaluation standards, thestatus of legal compliance, etc. is monitored and evaluated annually for all
outsourced property managers in order to consider whether or not tocontinue the transaction.
We are also making preparations to monitor their initiatives in each area ofESG. In addition, we have introduced a system to mutually motivate eachother by, for example, providing incentives for obtaining environmental
certification.

Introducing label-free bottles:
3R (reduce, reuse, recycle) practice based on Green
Procurement Standards
Since April 2022, TRM has introduced label-free pet bottles. Labelfree bottles serve to reduce use of plastic and simplify the sortingof waste.
We use the label-free bottles whenholding meetings and receiving visitors
and procure them from suppliers whoare committed to work for asustainable society and environment.
We believing that a daily purchase of
supplies with a view of sustainability
will contribute to support thesustainability.

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

For institutional investors
During the pandemic, API and TRM remain proactive to carry out investor
relation activities utilizing teleconference and videoconferences.
From January to April 2023, we had 92 dialogues with domestic and foreign
investors for the financial results of the fiscal period ended November 2022,
and 100 dialogues from July to September 2023 for the fiscal period ended
May 2023. Also, we respect the fair disclosure principle for the foreign
investors by preparing the financial result presentation videos in Japaneseand English and publishing them at the same time.

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

For retail investors
We are maintaining opportunities to communicate with individual investors
through participation to face-to-face seminars in addition to the webinars
organized Nihon Securities Journal, etc.

Ex) Seminars to retail investors for FP ended November 2022
・March 16, 2023 – Daiwa J-REIT Caravan Sapporo
・May 11, 2023 – Daiwa J-REIT Caravan Fukuoka

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

Our policy on human capital management“Human capital management” in the TFHD Group refers to the act ofworking towards the sustained improvement of value by formulating andexecuting human capital strategies linked to management strategies. The
Group aims to “become a corporate group that continues to create value”
and “realize a future where everyone can be themselves and shine
vigorously” by making aggressive investments based on the perception thatthe knowledge, skills and ambition of its approximately 30,000 employees
spread over 100 companies constitute “human capital.”
With view towards realizing our ideal vision, the Group has espoused“aiming to achieve sustainable social development and growth with all of its
employees possessing a challenge-oriented DNA and sense of purpose inengaging society” as its human capital philosophy. Based on that, the Groupis pursuing the following three human capital strategies: “developing humanresources who create value,” “developing organizations with diversity and asense of unity” and “enhancing motivation to work and ease of working.”
The first of these strategies, “developing human capitals who create value,”
constitutes the Group’s policy on human capital development based on theGroup philosophy and its management strategies.
While sharing the sponsor group's basic policy on human resources, TRM asa professional group in real estate management, recognizes the importanceof developing and nurturing human resources in order to provide highquality real estate investment management services and maximize
unitholder value. Based on such recognition, we will promote human capitalmanagement with the goal of becoming the “Company of Choice No.1”.

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

Support for acquiring business related qualifications

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

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

Training programs by external organizations
In partnership with external organizations, several programs are provided to
TRM’s employees including continued training on asset management
operations and legal compliance, as well as management training provided
GLOBIS, one of the largest business schools in Japan, business skill system
learning, English conversation lessons, etc.
Examples of programs by external organizations
Position-based trainings
Trainings for all-levels employees*all employees excluding
temporary staff

Management training for senior management andmedium-level employees
Trainings on communication, business skills, PC skills,
business English conversation lessons(as of June 2023)

Use of qualification
support system

Real Estate Broker

87

7

ARES* Certified Master68

14

Certified Building Administrator

16

1

Chartered Member of the Securities Analysts
Association of Japan

2

3

Certified Property Manager

90Real Estate Consulting Master

4

0Real Estate Appraiser

80First-class Architect

60Qualification

Nb. of employees(FY2022)*Association for Real Estate Securitization

Performance Evaluation Process
TRM evaluates each employee's growth goals, performance, and abilities
through interviews with their immediate supervisors. We encourage each
employee to have a career plan and to develop skills that can be usedboth internally and externally. ESG-related items are included in the goals
set by the employees, and ESG-conscious work processes and businessperformance are reflected in their evaluations as well as the achievementof other goals, leading to the determination of compensation for thefollowing year's employees, including their grade, position, and salary.

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Recruitment website

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

Human resource exchange

TRM receives staff seconded from the Sponsor or group companies anddispatches its employees to the Sponsor to provide its employees withvaried professional experiences. Based upon the fact that the number of
employees of TRM had increased to a certain size, partly because of themerger happened in 2017, we decided to conduct shuffling of employees
among different divisions in order to raise career development of ouremployees. Meanwhile when conducting such occupational relocation, we
pay close attention to the information firewall between the different
business divisions.

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

External
Evaluation/
International Initiatives

Environment

SocialGovernance

ESG Data

Table ofContents

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

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For Health and well-being of employees
TRM is making continuous effort to have various systems to form a working
environment and organization enabling to realize and promote the health andcomfort of its employees.

Work-from-home system and flex-time work system
For all employees of TRM, a WFH system has been introduced in response to the
spread of the Covid-19. Not only that it improves productivity by reducing
commuting time, etc., but also it enables employment of employee in remote area.
Employees are also allowed to use shared offices under pre-designated rules.
In addition, the flexible working hours system allows employees to work from11:00 to 15:00 as core hours and to leave work freely outside of the core hours,
thereby supporting more flexible work styles based on the various life
environments of each employee.

Paid-leave usage encouragement
Every year, employees are required to set up so-called “commitment holidays”, aseven-day paid leave (five days in a row + two days immediately before or afterthat week) and to share such committed calendar within the teams they belong to.
TRM is also creating business environment for the employees to digest their
allocated paid leaves, by proactively setting up recommended days to use paid
leaves.

Working environment
Workplace of TRM is in Shibuya, an exciting and innovative city where theareas people live and play are closely connected.
In Spring 2023, as an outcome of proposals by “New working style” project,
the working place of TRM was renewed. The office was designed to be aplace where employees can see each other's faces and exchange words,
and where communication is more active, with a group address system(free address system for each department) being introduced and servers
for famous chain-supervised coffee and bread set up in the lounge area.
In a posterior survey, 83% of the respondents answered that they were"much satisfied" or "somewhat satisfied" with the new layout, and 99% of
the employees answered that they were satisfied with the new freebeverage facilities. On the other hand, based on the results of thequestionnaire and opinions about individual measures, there is room for
improvement, and we will continue to work to realize a more comfortableworking environment.
Also, a space for refreshment is created with green on the terrace of thebuilding where TRM is located, Shibuya SOLASTA. The building earned the
CASBEE Wellness Office, a recognition of the building's ability to promotehealth and comfort of people work in the building.

Effort to reduce overtime
In order to prevent excessive long working hours, TRM is taking necessary
measures. The employees are required to set an upper limit of overtime working
hours at the beginning of the fiscal year, and such objectives are regularly
monitored and reminded. In certain cases, we intentionally raise them as ameeting agenda if the working hours are excessively long.

“New working style” projectA team of employees voluntary launched in 2021 a new project aiming to design
how to work effectively with three key words: ”office and digital environment”,“communication”, and “in-company systems”, and is working to create a company
where they can achieve more their best performances and professionally growfurther. Proposals are made to the company, and as a result, online suggestion
box has been set up and group address of office was introduced. (at right of the
page)

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

Health Committee
Health Committee is established to improve employees' occupational health.
The Committee examines labor-related problems occurred in the company,
reports the results of investigation on comfort and safety in the workspace, andtakes measures to increase awareness for mental and physical health by poster,
etc. Lectures by industrial physicians on related themes are held.

One-on-one session with HR
Once a year, employees have one-on-one session with HR department, where
they can discuss and share their career development plan and explain their
troubles and expectations related to the relationship with supervisors andcolleagues.

Employee satisfaction survey
Every year, TRM conducts an employee satisfaction survey with a third-party
partner. Based upon the results of the survey, we are taking variety of means
to improve employee satisfaction level.

FY2020

FY2021

FY2022

FY2023

Employeeengagementlevel*

60.8

62.8

58.4

67.4

Nb. ofresponses/nb. of
eligible
employees

96/98

100/100

99/10097/97Participation rate

98％

100％

99％

100％

Environment

SocialGovernance

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Table ofContents

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

Employee study groups

Younger employees have led voluntary organization of cross-divisional study
groups to share information on businesses unique to each division, and onnecessary knowledge/skills.

Support for company circle activities
Financial support is provided to employees for company club activities.

Luncheon
To enhance communication among employees, regular luncheons by groups
of a small number of staff have been organized.

*Quantifies the attachment and trust between employees and the company

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Key Employee Data
Apr. 30, 2021

Apr. 30, 2022

Apr. 30, 2023

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

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

105
61
44
68
38
30
9
1
8
7
4
3
28
22
6
4
2
2
33
28
5
3
3
0
13
8
5
5
2
3
5.1 yrs
4.4 yrs
5.9 yrs

Number of employees*2
MaleFemaleOf which permanent staff
Male
FemaleOf which contract staff
Male
FemaleOf which temporary staff
Male
FemaleOf which seconded from TLC
MaleFemaleNumber of Directors*3
Male
FemaleNumber of senior management
Male
FemaleNumber of employees aged 60 or more
Male
FemaleNew hire*4
Male
FemaleTurn over*4
MaleFemaleAvg. aggregated years of service*5
Male
FemaleHealth check participation
Stress check participation
Annual paid leave per capita
Ratio of handicapped employee
Monthly avg. overtime per capita
Work-related injury and death
Absentee rate
Ratio of employees on leave
Childcare leave users
Childcare short working hour
/Childcare off-peak commuting users
Nursing-care leave users
Home office utilization rate*1

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

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

FY2022100.0%
99.0%
12.8 days
1.7%
24.4 hours
0
0.0%
1.1%
10.0%

0

5

5

0
100.0%

0
100.0%

0
100.0%* Financial year from April of the year to March of the next year

Training hours per capita
Training expense per capita

FY202227.3 hours¥82,183*1 Trainings include those for human capital development, personal skill
development and essential trainings related to ESG, compliance and risk
management.

*1 Based on the data as of April 30, 2020, April 30, 2021 and April 1st, 2022
*2 Permanent staff, contract staff and staff seconded from TLC*3 Includes part-time directors*4 Permanent staff*5 Includes the years working at the asset managers before merger to TRM in July 201750

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

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

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

1.

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

2.

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

3.

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

4.

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

5.

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

6.

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

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

The 10 Principles of the UN Global Compact

Human rights

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

Environment

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

Anticorruption

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

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

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

API’s Corporate Governance

54

Compliance

60

TRM’s Corporate Governance

56

Risk Management

64

Governance Structure to Maximize Our
Unitholder Value

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

API’s governance structure

Eligibility requirements

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

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

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

(Note) Yonosuke Yamada resigned as supervisory director on September 7, 2023 due to the
expiration of his term of office; Kazuhiko Takamatsu, who was elected as supervisory director at
the Unitholders’ Meeting held on August 17, 2023, was newly appointed as supervisory director
as of September 8, 2023.

Concurrent positions and compensation of directors
Excerpt from the Semi-annual report for the fiscal period ended May 2023
Position

Name

Executive
Director

Nobuhide Kashiwagi

Managing Director, Chief Division
Officer of Activia Management Division,
TLC REIT Management Inc.

Yonosuke Yamada (Note)

Managing Partner of Yamada, Goyaand Suzuki law offices

Yoshinori Ariga

Ariga Yoshinori Accounting Office

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

Directors
The Executive Officer executes the business of API and represent API. In
addition, the Supervisory Directors supervise the Executive Directors in theexecution of their duties. The Supervisory Directors are independent of TRM
or its interested parties, etc., in accordance with the provisions of theInvestment Trust Law, and may request reports from TRM and the asset
custodian on the status of API's operations and assets, or conduct necessary
investigations as necessary.

Supervisory
Directors

Concurrent positions

Compensation received(¥ thousand / period)

ー

3,300

(Note) Yonosuke Yamada resigned as supervisory director on September 7, 2023 due to the
expiration of his term of office; Kazuhiko Takamatsu, who was elected as supervisory director at theUnitholders’ Meeting held on August 17, 2023, was newly appointed as supervisory director as of
September 8, 2023.

Term of office / brief biographies of directors
The term of office for directors is two years. Please refer to API’s website forthe brief biographies of directors.

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Board of Directors
At the meeting of the board of directors, the executive director reports on theperformance of its duties and the supervisory directors supervise to ensure that
API operates the asset management in compliance with legal and regulatory
requirements. The meeting frequency of the board should be at least once inthree months as stipulated under internal regulations of TRM. However, for
FY2022, 13 meetings were held with a 100% attendance of directors.

Independent Auditors
The independent auditor shall audit the financial statements of API and report tothe supervisory directors any improper activity of the executive director. The termof office of the independent auditor comes to an end at the first unitholders’meeting held after the first financial period closed after one year or more from theappointment date. The auditor shall be reappointed except as otherwise resolvedin a unitholders’ meeting.

Auditor fee
Excerpt from the Semi-annual report for the fiscal period ended May 2023
PositionIndependent
auditorName
Ernst & Young ShinNihon LLC

Compensation(¥ thousand/period)
13,700(Note) Includes fees for preparing comfort letters related to the issuance of new investment
corporation bonds in December 2022.

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

TRM management organization

Organizational chart

Under the management organization shown below, TRM
exercises its asset management operation, and the Activia
Management Division undertakes the management ofassets of API. TRM has established the Investment
Committee and the Compliance Committee to deliberatematters related to asset management and compliance,
and the Acquisition Priority Review Meeting to determine
the order of priority for consideration.
In April 2021, TRM established the rules on the
Sustainability Promotion System to strengthen the systemand expand the functionality of measures. Following this,the Sustainability Promotion Council obtained a moreaccurate position in the organization. The Sustainability
Department succeeds the ESG-related missions from theEnvironmental Engineering Department, and we willfurther promote our sustainability program.

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Decision Making Process
In order for API to make decisions concerning the acquisition or sale of assets or the operation and management of such assets, the Investment Committee of
TRM shall, in principle, be required to pass unanimous resolutions on proposals, including the execution of acquisition of such assets and approval of theacquisition price, by the attending committee members with voting rights. In addition, TRM's legal compliance system and as a measure against conflicts ofinterest in transactions with related parties, in certain cases, deliberations and resolutions shall be made at TRM's Compliance Committee prior to resolutions at
the Investment Committee.

Compliance Committee
In order to strengthen the compliance system, TRM holds regularmeetings of the Compliance Committee, whose members are outside
experts (lawyers). The Compliance Committee makes resolutions on thefollowing matters.

Members

・Compliance Officer
・President & CEO・Directors (excluding part-time directors)(In the case that a director concurrently serves as the chief division officer of each
asset management division, such director may not attend the Compliance
Committee meetings pertaining to the investment corporation with which TRM hasentered into an asset management agreement that he/she does not havejurisdiction over as the Chief Division Officer of each asset management division.)・One or more outside experts (who must be a licensed expert such as an attorney
or accountant) appointed by the Board of Directors of TRM

Matters to beresolved

・Establishment and modification of basic investment policy for asset management(*)
・Determination and modification of asset acquisitions or dispositions and theirconditions, etc. (*)
・Establishment and modification of asset management plans (*)
・Establishment and modification of basic policies for asset management (*)
・Establishment and revision of basic policies for financing, capital and dividend
policies (*)(The asterisked matters shall be limited to those related to transactions withrelated parties and matters deemed necessary by the Compliance Officer.)・Matters pertaining to transactions with related parties(except for transactions that do not require prior approval by the Compliance
Committee as stipulated in the Related Parties Transaction Rules).
・Preparation and revision of the Compliance Manual and Compliance Program
・Deliberation and decision on remedial measures or future preventive measures
for inappropriate acts in terms of compliance with laws and ordinances, etc.
・Matters that the Compliance Officer deems necessary to be deliberated by theCompliance Committee

Deliberation

If two-thirds of the committee members including the Compliance Officer and alloutside experts are present at the meeting, and two-thirds of the members whoare present at the meeting including the Compliance Officer and all of the outside
experts agree with the proposal, the proposal may be submitted to theInvestment Committee. The Committee members may have observers present at
the Compliance Committee meetings and ask for their opinions or explanations.

Investment Committee
TRM has an Investment Committee with outside experts (real estate appraisers) as
members. The Investment Committee shall make resolutions on the following
matters

Members

・President & CEO・Directors (excluding part-time directors)
・Chief Division Officers of the Activia, Comforia and Broadia Management Divisions(Each of whom is entitled to attend only the committee meeting pertaining to the REIT for
which he/she is responsible)
・Chief Division Officer of Corporate Management Division
・General Manager of the Asset Investment Department
・General Managers of the Finance & Accounting Department, Corporate Planning Department,
Environmental Engineering Department (without voting right)
・Compliance Officer (without voting right)
・Qualified independent real estate appraiser appointed by the Board of Directors of TRM

Matters to beresolved

・Establishment and modification of basic policies for asset investment
・Determination and modification of asset acquisitions and dispositions and their terms andconditions, etc.
・Establishment and modification of asset management plans
・Establishment and modification of basic policies for asset management
・Matters pertaining to the preliminary settlement of accounts
・Establishment and modification of basic policy on financing, capital and dividend policy
・Decisions and changes related to financing, capital policy, and dividend policy・Matters related to transactions with related parties (excluding transactions that do not requireprior approval by the Investment Committee in accordance with the Related Parties Transaction
Regulations)・Other important matters related to the above

Deliberation

Meetings of the Investment Committee in principle must be attended by all members with avoting right, and the Investment Committee approves a submitted proposal by a unanimousvote. A qualified independent real estate appraiser does not need to attend unless property
value is an issue. If a qualified independent real estate appraiser cannot attend a meeting
where property value is an issue, he/she may, instead of attending the meeting, submit anopinion, which must be respected upon a deliberation and vote.
Any member of the Committee who has a particular interest in the subject proposal may notparticipate in the resolution. If the Compliance Officer determines that there is a problem withthe course of deliberations, he/she may instruct the Investment Committee to suspend thedeliberations. The Committee members may have observers present at the Investment
Committee meetings and ask for their opinions or explanations.

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

Alignment of interests of API’s unitholders and TLC
Ownership by the Sponsor

Co-ownership of properties with the Sponsor

In the Sponsor Support Agreement, TLC has made it clear that when API
decides to issue additional units, a subscription of a part of such issuanceshall be sincerely considered.
In Spring 2022, TLC made additional acquisition of API’s investment units(cf. p.14). Further support from the Sponsor is expected with reinforcedalignment of interests.

API holds co-ownership of interests with the Sponsor in the threecommercial properties namely Tokyu Plaza Omotesando Harajuku,
DECKS Tokyo Beach, and Q plaza HARAJUKU. We consider that thisalignment of interests between the Sponsor and API’s unitholders,
deriving from operating revenues of the owned assets including above,should lead to a better property management practice.

Ownership ratio of
Tokyu Land Corporation (Sponsor)
as of May 31, 2023
11.0%

(Note 1)Percentages of co-ownership interests API holds in the properties.
(Note 2) Tokyu Plaza Ginza (Land)(co-ownership 30%) was disposed on April 5, 2023.

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Acquisition process securing fairness to protect unitholder value

Asset management fee structure including DPU-linked fee

To realize an effective and transparent management, TRM has an effective
decision-making process based on internal regulations including themanagement guideline and rules on related-party transaction.
For instance, asset acquisition from related parties requires deliberation andresolution of Compliance Committee, which includes external expert(s) in its
members and an approval by the Board of Directors of API, for which more
stringent rules are applied and conducted.

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

Acquisition approval process

AM fee structure of API

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Compliance
As a member of the TFHD Group, TRM is implementing compliance management in compliance with the "Tokyu Land Holdings Group Code of Conduct" byholding Compliance Committee meetings and establishing a Compliance Department, etc. TRM has also established a solid compliance system within TRM. We
have established a solid compliance system by formulating compliance rules, compliance manuals, etc. within TRM.

UN Global Compact
TFHD Group has stated its support for the UN Global Compact and TRM
shares its support and respects the ten principles of the UNGC.

10 principles of UN Global Compact

Human rights

Principle 1: Businesses should support and respect theprotection of internationally proclaimed humanrights; andPrinciple 2: make sure that they are not complicit inhuman rights abuses.

LabourPrinciple 3: Businesses should uphold the freedom of
association and the effective recognition of theright to collective bargaining;
Principle 4: the elimination of all forms of forced andcompulsory labour;
Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respect of
employment and occupation

Environment

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

Anticorruption

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

TFHD Group’s Code of Conduct
TFHD, the sponsor group, recognizes that risk management throughcompliance management is the foundation of the Group's management,
and we encourage all executives and employees to not only comply withlaws and regulations, but also to make decisions and act in accordancewith the "Tokyu Land Holdings Group Code of Conduct," a code of conduct.
The Asset Manager is a member of the Tokyu Land Holdings Group. As amember of the Group, TRM will practice compliance management inaccordance with the Code of Conduct.

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Corporate Compliance at TRM
TRM's management philosophy is to contribute to the development of society
and maximize unitholder value through the provision of high-quality realestate investment management services and by earning the confidence of all
stakeholders.
We aim to earn the trust of our unitholders by ensuring compliance with laws
and regulations and acting with high ethical standards, and by providing
transparent and easy-to-understand information disclosure from thestandpoint of our unitholders, thereby contributing to the provision of highquality real estate management services that meet the diverse needs of ourtenants and the provision of total management services that bring together
the know-how of TFHD Group.
In order to ensure compliance management and enhance corporate value, as
well as to become a company that is trusted by all stakeholders including
unitholders, all officers and employees of TRM (including directors, corporate
auditors, temporary employees, and others who are not employed by thecompany) are required to use the Compliance Manual, an internal regulation,
as a guide in their daily business activities, and each and every one of themis required to comply with the standards of conduct stipulated in the Manual.

Directors recognize compliance as the most important issue inmanagement and are responsible for maintaining and improving themanagement environment for compliance by establishing basic
compliance-related policies and internal rules, etc. Their main roles are
as follows;
1.
2.
3.

Formulation and resolution of basic policies and internal rules, etc.
related to complianceDirect activities based on the compliance program
Maintenance of compliance environment and internal control system

Auditors of TRM have the role and responsibility to audit whether
directors' decisions and their execution are legal, appropriate, andeffective.

Compliance Committee
Refer to “TRM’s Corporate Governance.” (p.56)

TRM considers compliance to be not only a matter of legal observance but
also a broader concept, as described below, in accordance with the abovementioned management philosophy, which is to be practiced by each andevery officer and employee with awareness, thereby fulfilling corporate social
responsibility.
1.
2.
3.
4.

Legitimate actions in compliance with laws and regulations (including
supervisory guidelines, financial inspection manuals, etc.)
Risk management behavior in compliance with internal rules andregulations
Exemplary behavior that conforms to our corporate philosophy
Ideal behavior based on social norms and high ethical standards

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

Basic training on compliance and ethics for employees
TRM provides extensive compliance and business ethics training for
employees.
Example of FY2022 trainings for all employees
・Compliance training
Fiduciary duty (customer-oriented business operation) / Financial
Instruments and Exchange Act and Act on Investment Trusts andInvestment Corporations / Compliance framework / Conflict of interest
transaction management
・Risk management training

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Internal Audit
TRM has established regulations on internal audit and conducts internal
audits for the purpose of examining whether or not TRM's operations arebeing conducted properly and efficiently in accordance with laws,
regulations, and rules, and to make recommendations for improvement to
the departments to be audited, thereby ensuring the appropriateness andefficient management of TRM's operations. Internal audits include thedetection and prevention of violations of laws, regulations, and rules,
including rules related to accidents, corruption, fraud, and ethics; the properand efficient execution of the operations and management of the audited
departments; financial soundness; auditing the status of the thoroughunderstanding of laws, regulations, and points of concern by officers andemployees; and auditing other necessary matters. The Internal Audit
Department is responsible for the following audits. The Internal Audit
Department is independent from the audited department, and in principle,
officers and employees of the Internal Audit Department do not perform
duties for the audited department. Internal audits shall be conducted on an
ongoing basis on an annual basis, covering all departments and theiroperations except for the Internal Audit Department (in the case where apart of the business is outsourced to a third party, the audit will cover the
management status of the outsourced business by the department incharge). Audit results are reported to the President & CEO and the Board of
Directors, and the President & CEO gives instructions for improvement tothe audited department based on the audit results.

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Fraud and corruption prevention
TRM shares the THFD Group’s anti-corruption policy, and in the belief that corruption creates significant obstacles against sustainable development and corrodes
the social structure, recognizes that commitment to prevention of corruption is an important issue for the society and is making the best effort to prevent any
unfair practice in the operation. The rules of employment and rules on the compliance stipulate that we shall not conduct those acts, and periodical trainings are
implemented to the employees. The effort includes also that compliance verification by supervisors while keeping evidence to make a judgment of compliance isrequired at a business transaction. Harsh punishment shall be imposed to on the employee who conducted those acts.
TFHD Group is a signatory to the United Nations Global Compact (UNGC), and as a member of the Group, TRM supports the ten principles of UNGC. (cf. p.60)
TFHD Group’s Anti-Corruption Policy
TFHD Group recognizes that corruption and bribery are serious risks that could considerably damage the trust and credibility of a company. We arecommitted to maintaining sound relationships with stakeholders and will never engage in business entertainment or gift-giving that elicits suspicion or
mistrust from society. Specifically, we will thoroughly implement the following.
(1) We will never engage or be complicit in any and all forms of bribery, including money laundering, embezzlement, or obstruction of justice, etc.
(2) In fully understanding laws and regulations about relationships with public offices and other similar
persons in Japan or other countries, we will never engage in business entertainment or gift-giving thatelicits suspicion or mistrust from society and we will never provide monetary or other benefits to gain illicit profits.
(3) We will not provide or receive business entertainment or gifts from business partners or other parties that deviates from sound business practices orsocial norms.
We will not use our position or authority to demand personal benefits from our business partners or other parties.
In addition, a code of conduct is stipulated in the code of ethics for executive officers approved by the Board of Directors Meeting to counteract all
corruption activities including bribery.

Prevention of relationships with anti-social forces
TRM sets forth a basic principles and specific measures to be taken in the"Standards for Anti-Social Forces" to ensure that TRM and API do not have
any relationship with anti-social forces, to ensure proper management, toprevent significant damage to stakeholders including officers, employees,
etc. and shareholders, and to fulfill the company's social responsibility.

Anti-money laundering system
TRM recognizes the importance of preventing money laundering, financing
of terrorism and financing for the proliferation of weapons of mass
destruction ("money laundering, etc.") and conducts annual hearings on
the prevention systems of its business partners.
TRM strives to prevent API, TRM, as well as their clients, business partners,
etc., from involvement in money laundering, etc., and to contribute to thesound maintenance and development of the financial system.

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

Awareness ofCompliance Helpline
Counter

FY2020

FY2021

FY2022

90%

88%

89%

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

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

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

Risk management framework
TRM sets forth a basic policy for risk management based on its strategic
objectives and appropriate risk management to be taken in the "RiskManagement Regulations", and has appointed the Compliance Department,
consisting of an officer and employees who do not concurrently serve in thebusiness division, as the risk management division, and the Compliance
Officer as the risk management manager who oversees this department. The
Compliance Department and the Compliance Officer promote theadvancement of risk management systems with the support of external
experts. The risk management manager is responsible for the effectivenessof appropriate risk management, and reports directly to the President & CEO
and the Board of Directors of TRM on the design and management of theorganization-wide risk management system and the risk management policy
formulated each year. Directors shall establish risk management policies anddisseminate them throughout the organization.
TRM also works to improve the risk management skills of its employees by
providing risk management training.

Risk management training

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

64

Sustainability
Introduction Policy/Structure
for Promotion

TopicsSustainability Report 2023

External
Evaluation/
International Initiatives

Environment

SocialGovernance

ESG Data

Table ofContents

Information Security
In order to protect the information assets held by TRM and ensure theirproper use, TRM has established the "Basic Rules for Information Security
Management" to clarify the responsibilities at TRM regarding information
management and to define basic information security measures to be
implemented.
By continuously practicing these measures, TRM strives to ensure the trustof its stakeholders, including API that entrusts its asset management
operations to TRM, and thereby fulfill TRM's corporate social responsibility.
In preparation for the occurrence or emergence of serious risks related tothe company's information security, TRM has appointed a chief information
security management officer (a Director in charge of information security),
an information security management officer (General Manager of the
Corporate Planning Department), an information system management
officer (General Manager of the Digital Transformation Promotion
Department), and an information security manager at each division (Chief
Division Officer or General Manager of the division), to ensure a system toreport to the Board of Directors without delay.

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

65

Sustainability
Introduction Policy/Structure
for Promotion

TopicsSustainability Report 2023

External
Evaluation/
International Initiatives

GRI Index
Statement of use
GRI 1 used
Disclosure

Location or reason foromission

Disclosure
2-8

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

ProfileAPI Structure

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

2-2

Entities included in theorganization’s sustainability
reporting

None

2-3

https://www.activiaReporting period, frequency andreit.co.jp/en/sustainability/report.ht Sustainability Report and GRI
contact point
Index
ml

2-5

External assurance

https://www.activiareit.co.jp/en/contact/
Nothing in particular

2-7

Employees

Workers who are not employees

https://www.tokyu【Asset Manager】
trm.co.jp/en/sustainability/esg.html
Key Employee Date#c3

Governance structure andcomposition

https://www.activiareit.co.jp/en/about/management.ht Managementml

3. Governance2-9

https://www.activiareit.co.jp/en/sustainability/environm ISO14001 certificatedent.html#c1

2-10
2-11
2-12

2-13
https://www.activiareit.co.jp/en/features/index.html

API Features

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

Profilehttps://www.activiareit.co.jp/en/about/structure.html

API Structure

2-14

https://www.tokyutrm.co.jp/en/sustainability/esg.html#c3【Asset Manager】
Since the Asset Management
Key Employee Date
Company has only one office, there
are no regional differences (samebelow)

2-15

API Structure

https://www.activiaOur Structure to Promote
reit.co.jp/en/sustainability/index.htm
Sustainabilitylhttps://www.activiaGovernance Structure To
reit.co.jp/en/features/feature_03.ht
Maximize Unitholder Valueml
https://www.activiaArticles of Incorporation (inreit.co.jp/ja/ir/library.html
Japanese)https://www.activiaArticles of Incorporation (inreit.co.jp/ja/ir/library.html
Japanese)

Contact us

2. Activities and workers
Activities, value chain and otherbusiness relationships

Location or reason foromission

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

Environmental Performance wasassured bya third-party organization
Third-party assurance
https://www.tokyustatement
trm.co.jp/en/sustainability/esg.html
#c3

2-6

Table ofContents

GRI 1: Foundation 2021

Organizational details

Restatements of information

ESG Data

Activia Properties Inc. and the Asset Management Company have reported with reference to the GRI Standards forthe period from April 1, 2022 to March 31, 2023.

2-1

2-4

Governance

The latest version of the table is on API’s website as well.

GRI2: General Disclosures 2021
1. The organization and its reporting practices

SocialEnvironment

Nomination and selection of thehighest governance body
Chair of the highest governancebody
Role of the highest governancehttps://www.activiabody
Our Structure to Promote
reit.co.jp/en/sustainability/index.htm
in overseeing the management of
Sustainabilitylimpacts
https://www.activiareit.co.jp/en/sustainability/material. Materiality Identification
html
https://www.activiaDelegation of responsibility for
Our Structure to Promote
reit.co.jp/en/sustainability/index.htm
managing impacts
SustainabilitylRole of the highest governancehttps://www.activiaOur Structure to Promotebodyreit.co.jp/en/sustainability/index.htm
Sustainability
in sustainability reportingl
Conflicts of interest

https://www.activiaGovernance Structure To
reit.co.jp/en/features/feature_03.ht
Maximize Unitholder Valueml
https://www.activiaReport on Management
reit.co.jp/file/ir_library_other_fileStructure of the REIT Issuer
20be33d4ff90335d5d0cdfc9d340da3(in Japanese)
03a6a1842.pdf

2-16Communication of criticalconcerns

https://www.activiareit.co.jp/en/sustainability/index.htm
Our Structure to PromotelSustainability
No critical concerns reported during
the reporting period.

66

Sustainability
Introduction Policy/Structure
for Promotion

TopicsSustainability Report 2023

Disclosure
2-17
2-18

Collective knowledge of thehighestgovernance body
Evaluation of the performance ofthehighest governance body

2-19

Remuneration policies

2-20

Process to determine
remuneration

2-21

2-23

https://www.activiareit.co.jp/en/sustainability/index.ht
mlhttps://www.activiareit.co.jp/en/sustainability/index.ht
mlhttps://www.activiareit.co.jp/ja/ir/library.html
https://www.activiareit.co.jp/ja/ir/library.html

Policy commitments

Our Structure to Promote
Sustainability
Sustainability Promotion
Council
Articles of Incorporation (inJapanese)
Articles of Incorporation (inJapanese)https://www.activiareit.co.jp/en/features/index.html
https://www.activiareit.co.jp/en/sustainability/index.ht
ml

2-30

Collective bargaining agreements 100%

【Asset Manager】

GRI 3: Material Topics 2021
3-1

Process to determine material
topicshttps://www.activiareit.co.jp/en/sustainability/material. Materiality Identification
html

3-2

List of material topics

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

3-3

Management of material topics

https://www.activiareit.co.jp/en/sustainability/material. Materiality Identification
html
https://www.activiareit.co.jp/en/sustainability/approach. API's Initiatives
html

201: Economic Performance

2-25

Processes to remediate negative
impacts

https://www.tokyu【Asset Manager】
trm.co.jp/en/sustainability/esg.html Establishment of whistle#c4
blowing system

2-26

Mechanisms for seeking advice
andraising concerns

https://www.tokyu【Asset Manager】
trm.co.jp/en/sustainability/esg.html Establishment of whistle#c4
blowing system

Compliance with laws andregulations

Establishment of Compliancehttps://www.tokyu-fudosanHelpline（Tokyu Fudosan
hd.co.jp/english/about/compliance/
Holdings）
No violations during the reporting
periodhttps://www.activiareit.co.jp/en/sustainability/initiative. International Initiatives, etc.
html

Membership associations

Approach to stakeholder
engagement

2016

Our View on Sustainability

https://www.activiareit.co.jp/en/sustainability/index.ht
ml

2-28

Table ofContents

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

2-29

API Features

Embedding policy commitments

2-27

ESG Data

5. Stakeholder engagement

Messagehttps://tokyu-fudosan-hdcsr.disclosure.site/en/themes/32
Human Rights and Community※As a Group member, we share the （Tokyu Fudosan Holdings）
Tokyu Fudosan Holdings Group
Human Rights Policy.
2-24

Governance

Location or reason foromission

Disclosure

Legally, the investment
corporation does not have
employees.The relevant
information of the asset
management company is notaggregated at this time.
https://www.activiareit.co.jp/en/about/index.html

SocialEnvironment

Location or reason foromission

Annual total compensation ratio

4. Strategy, policies and practices
Statement on sustainable2-22
development
strategy

External
Evaluation/
International Initiatives

201-2

Financial implications and otherrisks and opportunities due toclimate change

205-2

Communication and training
https://www.tokyu【Asset Manager】
about anti-corruption policies and trm.co.jp/en/sustainability/esg.html
Compliance Training
procedures#c4

Sustainability Promotion
Council

https://www.activiareit.co.jp/en/sustainability/environm Addressing Climate Change
ent.html#c5

https://tokyu-fudosan-hdcsr.disclosure.site/en/themes/38

Anti-Corruption Policy（Tokyu
Fudosan Holdings）※As a member of the Tokyu Land
Holdings Group, we share the above
policy205-3

Confirmed incidents of corruption
No incidents
and actions taken

206: Anti-competitive Behavior

206-1

2016

Legal actions for anti-competitive
behavior, anti-trust, andNo incidents
monopoly practices

67

Sustainability
Introduction Policy/Structure
for Promotion

TopicsSustainability Report 2023

Disclosure

External
Evaluation/
International Initiatives

SocialEnvironment

Location or reason foromission

302-2

302-3
303: Water

303-3

303-5

2016
Energy consumption outside of
the organization

https://www.activiareit.co.jp/en/sustainability/environm Environmental Performanceent.html#c2

Energy intensity

https://www.activiareit.co.jp/en/sustainability/environm Environmental Performanceent.html#c2

403-5

Water withdrawal

Water consumption

305: Emissions

https://www.activiareit.co.jp/en/sustainability/environm Environmental Performanceent.html#c2

2016

305-1

Direct (Scope 1) GHG emissions

https://www.activiareit.co.jp/en/sustainability/environm Environmental Performanceent.html#c2

305-2

Energy indirect (Scope 2) GHG
emissions

https://www.activiareit.co.jp/en/sustainability/environm Environmental Performanceent.html#c2

305-4

GHG emissions intensity

https://www.activiareit.co.jp/en/sustainability/environm Environmental Performanceent.html#c2

403-6

Promotion of worker health403-9

Work-related injuries

40310

Work-related ill health404: Training and Education
404-1

404-2

404-3

306: Effluents and Waste 2016306-2

Waste by type and disposal
method307: Environmental Compliance 2016
Non-compliance with
307-1
environmental laws andregulations

https://www.activiareit.co.jp/en/sustainability/environm Environmental Performanceent.html#c2

No violations during the reporting
periodGRI 400: Social
4011
4013
403-2

403-4

Worker training on occupational
health and safety

2018
https://www.activiareit.co.jp/en/sustainability/environm Environmental Performanceent.html#c2

https://www.tokyuNew employee hires andtrm.co.jp/en/sustainability/esg.html
employee turnover#c3
https://www.tokyuParental leavetrm.co.jp/en/sustainability/esg.html#c3
Hazard identification, risk
https://www.tokyuassessment, and incident
trm.co.jp/en/sustainability/esg.html
investigation#c3
Employees also take part in the
Worker participation,
health committee disclosed below.
consultation, and communication https://www.tokyuon occupational health and safety trm.co.jp/en/sustainability/esg.html#c3【Asset Manager】
New Hire【Asset Manager】
Childcare leave users【Asset Manager】
Health Committee【Asset Manager】
Health Committee

Table ofContents

Carring out lectures by industrial
doctors and planned classes related 【Asset Manager】
to harassment.
Various employee training
https://www.tokyuprograms
trm.co.jp/en/sustainability/esg.html Health Committee#c3
Carrying out stress checks andregular health checks.
https://www.tokyutrm.co.jp/en/sustainability/esg.html#c3
https://www.tokyutrm.co.jp/en/sustainability/esg.html#c3
https://www.tokyutrm.co.jp/en/sustainability/esg.html#c3【Asset Manager】
Our Commitment
Status of Work-Style Reformand Diversity Promotion【Asset Manager】
Number of worker's
injuries/death incident【Asset Manager】
Status of Work-Style Reformand Diversity Promotion

2016

https://www.tokyutrm.co.jp/en/sustainability/esg.html#c3
Programs for upgrading employee https://www.tokyuskills and transition assistancetrm.co.jp/en/sustainability/esg.html
programs#c3
Average hours of training peryear per employee【Asset Manager】
Employee Development【Asset Manager】
Employee Development

Both contracted employees andregular employees receive
performance and career
Percentage of employees
development reviews in the same
receiving regular performance
structure, and aim to set the goals
and career development reviews and communicate with superiors.
【Asset Manager】
https://www.tokyuPerformance Evaluation
trm.co.jp/en/sustainability/esg.html
Process#c3

405: Diversity and Equal Opportunity
405-1

ESG Data

Location or reason foromission

Disclosure

GRI 300: Environmental
302: Energy

Governance2016

Diversity of governance bodies
and employees

https://www.activiareit.co.jp/en/about/management.ht Managementml【Asset Manager】
https://www.tokyuKey Employee Datatrm.co.jp/en/sustainability/esg.html
Status of Work-Style Reform#c3
and Diversity Promotion

413： Local Communities 2016
Operations with local community
https://www.activia413-1
engagement, impact assessments, reit.co.jp/en/sustainability/approach. API’s Initiatives
and development programs
html
Note: We report information on our
properties in consideration of the
purpose of this standard.
GRI G4: Construction and Real Estate Sector
Disclosures
CRE
Type and number of sustainability
certification, rating and labelling https://www.activiaCRE8
schemes for new construction,
reit.co.jp/en/sustainability/environm Environmental Certifications
management, occupation andent.html#c4
redevelopment

68Sustainability
Introduction Policy/Structure
for Promotion

TopicsSustainability Report 2023

External
Evaluation/
International Initiatives

Environment

SocialGovernance

ESG Data

Table ofContents

Independent Assurance Statement69