ESG REPORT

Issued on May 16 , 2023

CO NTENTS
Philosophy on Sustainability
Message from Management����������������������� 1
Sustainability Management����������������������� 2
Materiality������������������������������������� 6
Stakeholder Engagement������������������������ 12
International Initiatives and External Certifications �� 14
ESG-related Information Disclosure Policy andReporting Framework �������������������������� 19

Environmental Initiatives
Philosophy on Environmental Consideration andEnvironmental Performance ������������������� 21
Addressing Climate Change�������������������� 24
Initiatives to Address Environmental Challenges �� 31

Social Initiatives
Social and Local Community Initiatives ��������� 35
Human Resource Development���������������� 42
Employee Health and Safety ������������������ 49
Human Rights������������������������������ 50
Diversity & Inclusion（D&I） ������������������� 51

Governance Initiatives
NAF’s Corporate Governance������������������� 53
Management Structure ����������������������� 56
Compliance Structure������������������������� 59
Risk Management System ��������������������� 63

Sustainability FinanceGreen Finance��������������������������������� 65

MESSAGEFROMMANAGEMENT
Nippon Accommodations Fund Inc. (“NAF”) seeks to achieve its primary goal of maximizing unitholder value
over the medium to long term by contributing to solutions for addressing various social challenges that we
encounter by engaging in rental apartment and other property investment and management, underpinned by its
awareness that attaining sustainable growth of NAF hinges on sustainable growth of society.
In conjunction with Mitsui Fudosan Accommodations Fund Management (the “Asset Management Company”),
NAF has long engaged in asset management practices that place due consideration on sustainability, and wehave accordingly been taking one step at a time toward amassing concrete results and achievements withrespect to sustainability-related issues of particularly high importance to NAF (materiality), which has involved
considering action plans regarding such materiality, then setting metrics and targets.
Moreover, we expressed our support for the recommendations of the Task Force on Climate-related Financial
Disclosures (TCFD) in September 2021, underpinned by the aim of articulating our approach to addressing
climate change and carbon neutrality, which has been particularly subject to escalating demands from society inrecent years. Then in March of 2022, we performed information disclosure on “governance,” “strategy,” “metrics
and targets” and “risk management” and “metrics and targets” pursuant to the matters subject to climatechange-related disclosure per the TCFD recommendations, and released refined targets for environmental
performance, such as CO2 emissions of energy sources, that serve as key metrics when it comes to achievementof a decarbonized society.
NAF and the Asset Management Company will keep working together to promote initiatives looking towardachieving ongoing improvement. This will involve actively engaging in efforts carried out on the basis ofindividual action plans, metrics and targets based on materiality issues, and will also involve disclosing
sustainability-related information to facilitate more extensive dialogue with various stakeholders, such as
unitholders and investors, tenants, officers and employees, participants in the supply chain, and members of
local communities, and cooperating with them.
Nippon Accommodations Fund Inc.
Executive Director Takashi Ikeda
Mitsui Fudosan Accommodations Fund Management Co., Ltd.
President & CEO Hiroshi Kojima

1

SUSTAINABILITYMANAGEMENT
Sustainability Policy
The Asset Management Company formulated its “Sustainability Policy” in April 2016, and set the materiality for
NAF in February 2020.
To improve medium- to long-term unitholder value, NAF, together with the Asset Management Company, willcontinue to promote investment based on environmental, social and governance considerations.

1.Basic Policy
Based on an awareness that achieving a sustainable society is essential for NAF’s sustainable growth, the AssetManagement Company works to ensure asset management operations that consider the reduction of theenvironmental load and collaboration with various internal and external stakeholders.
In addition, based on an awareness that corporate governance is also a key issue, the Asset Management
Company works to ensure thorough compliance and the establishment of risk management structures.
When promoting the aforementioned issues, the Asset Management Company refers to the various Group
policies on sustainability prescribed by its sponsor Mitsui Fudosan Co., Ltd. (”Mitsui Fudosan”) and where
necessary proceeds with the Code of Conduct for execution of asset management operations.
The Group Environmental Policy
Health and Productivity Management Declaration
Mitsui Fudosan Group s Human Rights Policy
Policy for Social Contribution Initiatives
Mitsui Fudosan Group Compliance Policy

2.Reduction of Environmental Load
Promoting energy-savings and reduction of CO2 emissions
The Asset Management Company promotes e cient use of energy in asset management while aiming topurchase energy-saving equipment, etc. and working on initiatives to reduce CO2 emissions through energy
savings.
2

Promoting the conservation of the water environment and waste reduction
We implement initiatives for conservation of the water environment such as through saving water and thepurchase of water saving equipment. In addition, The Asset Management Company works on initiatives toreduce toxic substances, saving resources and reducing waste.

3. Diverse Affiliation and Collaborations with Various Internal andExternal Entities
Unitholders and investors
NAF strives to promote timely and appropriate information disclosure and dialogue with unitholders andinvestors to foster mutual understanding and trust through disclosure documents such as securities reports andpress releases, briefings for analysts, and briefings for individual investors, etc. In addition, NAF also makes
efforts to disclose information concerning sustainability management in response to environmental certification
systems, etc.
* Please see “Policies on Customer-Oriented Business Conduct” established by the Asset Management
Company.

Tenants
NAF strives to implement disaster prevention measures by improving response times during emergencies andstrengthening preparedness during normal times at rental apartments, the major assets for which it manages
investments, in an effort to enhance the safe and secure living environments. At the same time, NAF aims to
improve customer satisfaction of tenants and other users by enhancing the level of comfort of the living spaces.

Officers and employees
The Asset Management Company recognizes that human resources are its most valuable assets and strives tocreate a comfortable and friendly working environment that takes into consideration the health of officers andemployees in order for them to fully exert their capabilities as well as promote initiatives for developing
capabilities through training and other measures. In addition, the Asset Management Company aims to improve
the awareness of its officers and employees by continuously conducting educational activities on complianceand sustainability.

Supply chains
As part of monitoring property management companies ( PM companies ) and other business partners
concerning the execution status of operations that are carried out on a regular basis, NAF con rms the status ofsustainability-related initiatives of the PM companies and other business partners, and by requiring them to beunderstanding and cooperative with respect to sustainability, promotes initiatives in its supply chains.
3Local community
As a member of the local community, NAF endeavors to contribute to the vitalization and development of local
communities where the assets it manages are located and to disclose information on such efforts.

4. Initiatives for GovernanceThorough compliance
The Asset Management Company has established an organizational structure that should secure compliancewith laws and regulations and implement fair transactions at any time. At the same time, the Asset Management
Company works to ensure that its officers and employees will act based on high ethical values to win the trust of
its stakeholders.

Establishment of risk management structure
The Asset Management Company has established a proper risk management structure to appropriately managea variety of risks for the purpose of avoiding or minimizing risks in conducting asset management.

5. Information Disclosure to Stakeholders Such as Investors
The Asset Management Company endeavors to proactively disclose this policy and its performance based on thepolicy, etc. to investors and other stakeholders.

In-House Structure for Promotion of Sustainability
The Asset Management Company has established internal rules for promoting sustainability for the sake of
implementing the Sustainability Policy. Based on these rules, the President & CEO has been designated as the
person with overall responsibility for sustainability promotion and the respective chief o cers of divisions incharge of the relevant measures (Chief Investment O cer or Chief Financial O cer) assume responsibility forexecuting individual measures related to sustainability promotion.
In addition, the Asset Management Company has established the Sustainability Promotion O ce (the O ce ),which is composed of four general managers from each team of the Asset Management Company and personnel
appointed by the general managers. It serves as a body for setting objectives and formulating implementationplans concerning NAF s promotion of sustainability.

4

Objectives and implementation plans formulated by the O ce are deliberated and decided upon at theInvestment Committee, which includes the Asset Management Company s President & CEO serving as theultimate decision maker. Meanwhile, such objectives and implementation plans are shared by the O ce with allo cers and employees. The O ce reports to the Investment Committee twice a year, in principle, regarding theobjectives and progress achieved in carrying out the implementation plans. It is furthermore subject to a
management review by the Asset Management Company, which reports to the Board of Directors of NAF.

Rules Concerning Promotion of Sustainability
Aiming to increase the effectiveness of the promotion of sustainability, the Asset Management Company has
established the “Rules Concerning Structure for Promotion of Sustainability,” which outlines basic policies andspecific procedures for the continuous monitoring and reduction of energy consumption, CO2 emissions, water
consumption, and waste quantities, as well as basic policies and specific procedures for cooperation (green
procurement, etc.) with external parties.

Sustainability Risk Evaluation
The sustainability risks of the Asset Management Company are periodically evaluated with the purpose of
appropriately identifying and understanding the sustainability risks of the Asset Management Company.
If significant sustainability risks are discovered based on the evaluation results, the Office will propose
improvement measures aimed at reducing such risks.

5

MATERIALITY
The Asset Management Company established the “Sustainability Policy” in April 2016, under the recognition that
promotion of sustainability is the important topic in its asset management business. Our CEO, who is also themost senior decision maker on sustainability issues made a statement that the organization will commit to thesustainability issues especially the material issues identified above.

Process for Identifying Material Topics
We identified our material topics through discussion at the Office of the Asset Management Company. The topics
identified were approved by the Investment Committee, which is the highest-level decision maker of the AssetManagement Company.

Step1
We gathered information to identify the issues that NAF might have a significant impact on sustainable growth ofthe environment, society and economy, by referring to the following:
Mitsui Fudosan Group's long-term vision, “VISION 2025”
UN Sustainable Development Goals (SDGs)
Global Reporting Initiative Index
External ESG evaluation such as GRESB real estate assessment and MSCI ESG rating
Interim summary issued by ESG real estate investment investigate committee, Ministry of Land, Infrastructure
and Transport, Japan

Step2
We assessed and prioritized each issue by using 2 axes of impacts: on our investment policy and on our
stakeholders, environment and society. Then, we identified material topics that NAF should strategically allocate
its resources.

6

Step3The material topics were discussed and approved at the Investment Committee, which includes the President &CEO of the Asset Management Company who is a member of the Committee and the highest-level decision
maker of the Asset Management Company.

Step4
The material topics have been communicated to all employees in the Asset Management Company as well asboard members in the investment committee. The topics are subject to periodical review and update to reflectchanges in society and environment.

Materiality
Materiality and status of initiatives
Promote Energy Efficiency and CO2 Emissions Reduction (Act against
Climate Change)
Why this topic
is material

We recognize that greenhouse gas (including CO2)
emissions from the real estate assets of ourinvestment corporation have a significant impact
on the environment.

tnemnorivnE

We understand the importance of learning theimpact of physical and transitional risks of climatechange on our asset to pursue sustainable growthof our investment corporation.
We support the international goals set forth by theParis Agreement, and continuously promote
initiatives for realizing net-zero greenhouse gas
emissions by 2050 in order to contribute to
mitigating climate change.
How theorganization
manages the
topic

We monitor and manage energy consumption andCO2 emissions in the common areas of ourresidential assets by setting reduction target.

7

Applicable SDGs

Materiality and status of initiatives
How theorganization
manages thetopic

We install equipment for energy efficiency, such as
LED lighting.
We pursue further understanding and managing
physical and transitional risks of climate change.
【Environmental Targets】

tnemnorivnE

Energy-oriented CO2 emissions (based on
intensity): With actual consumption of 2015 as thebase, 50% decrease in amount used
Water consumption (based on intensity): Withactual consumption of 2015 as the base, noincrease in amount used
Green Building certified percentage（based on
total floor space）: 40％

Acquire External Certification and Assessment on Sustainability
Why this topic
is material

We recognize promoting green building in our
property would have certain impact toenvironment and it is one of a major concerns of
our stakeholders that whether we makecommitment to.
By participating external ESG assessment such as
GRESB and referring to ESG ratings such as MSCIESG Ratings, we are able to assess our initiatives
and improve our sustainability-related activities.

How theorganization
manages thetopic

We proactively acquire and update external green
building certifications such as DBJ Green Building
Certification.
We have been participating GRESB real estate
assessment since 2017.
Using GRESB assessment, we review sustainability
initiatives and plan actions for improvement each
year.

8

Applicable SDGs

Materiality and status of initiatives

tnemnorivnE

Build Partnership with Property Companies and Operators
Why this topic
is material

We consider that cooperating with property managementcompanies and operators that manage our asset isessential to promote our sustainability initiatives.

How theorganization
manages the
topic

We engage property management companies andoperators to share our ESG policy and goals.
We assess and monitor sustainability initiatives
conducted by property management companies
and operators.
We share energy consumption and CO2 emissions
data from the common area of the building withproperty management companies to discuss theincreases/decreases and work on improvement
measures together.

9

Applicable SDGs

Materiality and status of initiatives
Develop Human Capital and Raise Sustainability Awareness among our
Employees
We understand that providing a working environment, inwhich employees of the Asset Management Company can
maximize their capability, contributes to improving theirproductivity and attracting new talents. This will
eventually benefit the investment corporation.

How theorganization
manages thetopic

We provide the following programs and benefits to ouremployees in the Asset Management Company.

yteicoS

Why this topic
is material

Career-building support for employees byimplementing regular interviews to help them set
their career goals and objectives
Performance evaluation program which includes
their commitment to sustainability initiatives
Regular training on compliance and sustainability
Financial and non-financial support for theacquisition of certifications/qualifications and theparticipation in external training programs.
Monetary support for annual health checkups,
thorough medical checkups and vaccinations.
Regular employee’s satisfaction surveys toimprove their working environment.

Enhance Tenant Satisfaction, Safety and Comfort
Why this topic
is material

We recognize that our asset, residential or
accommodation facilities, have a substantial impact onsafety and comfort of our tenant. Therefore, it is highly
important to maintain and improve them.

How theorganization
manages the
topic

We offer a high-quality rental apartment series, thePark Axis, which assures the tenants safety andcomfort.
We upgrade common / tenant-owned area of theproperties to increase our tenants safety andcomfort.
We provide our tenants with holistic services suchas house cleaning, through an exclusive
membership program, “Mitsui Sumai Loop” toenhance tenants satisfaction.
We perform continuous tenant satisfaction survey.
10

Applicable SDGs

Materiality and status of initiatives

Applicable SDGs

yteicoS

Contribute to Community Development
Why this topic
is material

We consider that developing local community will havean impact on maintaining and increasing
competitiveness of our properties.

How theorganization
manages the
topic

At the Okawabata Apartment Communities, NAF
has proactively cooperated in activities of the
management association and strives to contributeto formation of a local community.
We provide a space for regional bicycle sharing andencourage community residents to use at the
Okawabata Apartment Communities.
Materiality and status of initiatives

ecnanrevoG

Ensure Fairness and Transparency of Corporate GovernanceWhy this topic
is material

We understand that complying with laws and regulations
and having organization process that embraces fairtransactions will have a significant impact on trust andcon dence from stakeholders.

How theorganization
manages the
topic

The asset management company of NAF has establishedthe following governance structure.

We have a code of conduct on compliance.
Following the code, we develop an action plan andimplement the plan in our daily operation.
We have Chief Compliance Officer (CCO) who is incharge of assuring internal audit.
We have an established standard procedure intransaction with our stakeholders to prevent a
conflict of interest.
We perform an internal audit on a regular basis.

11

Applicable SDGs

STAKEHOLDERENGAGEMENT
As a member of society that interacts with various stakeholders, NAF recognizes that we can conduct our own
sustainable business activities by fulfilling our social responsibilities.
NAF will continue to promote ESG management while valuing the trustworthy relationships we have establishedwith our stakeholders and meeting their expectations.

Diverse Affiliation and Collaborations with Various
Internal and External Entities
Unitholders and investors
NAF strives to promote timely and appropriate information disclosure and dialogue with unitholders andinvestors to foster mutual understanding and trust through disclosure documents such as securities reports andpress releases, briefings for analysts, and briefings for individual investors, etc. In addition, NAF also makes
efforts to disclose information concerning sustainability management in response to environmental certification
systems, etc.
* Please see “Policies on Customer-Oriented Business Conduct” established by the Asset Management
Company.

Tenants
NAF strives to implement disaster prevention measures by improving response times during emergencies andstrengthening preparedness during normal times at rental apartments, the major assets for which it manages
investments, in an effort to enhance safety and security of tenants. At the same time, NAF aims to improvecustomer satisfaction of tenants and other users by enhancing the level of comfort of the living spaces.

12O cers and employees
The Asset Management Company recognizes that human resources are its most valuable assets and strives tocreate a comfortable and friendly working environment that takes into consideration the health of officers andemployees in order for them to fully exert their capabilities as well as promote initiatives for skill development
support through training and other measures. In addition, the Asset Management Company aims to improve theawareness of its officers and employees by continuously conducting educational activities on compliance andsustainability.

Supply chains
As part of monitoring property management companies (“PM companies”) and other business partners
concerning the execution status of operations that are carried out on a regular basis, NAF confirms the status ofsustainability-related initiatives of the PM companies and other business partners, and by requiring them to beunderstanding and cooperative with respect to sustainability, promotes initiatives in its supply chains.

Local community
As a member of the local community, NAF endeavors to contribute to the vitalization and development of local
communities where the assets it manages are located and to disclose information on such efforts.

13

INTERNATIONALINITIATIVES AND
EXTERNALCERTIFICATIONSInternational Initiatives
Support for Task Force on Climate-Related Financial Disclosures(TCFD) Recommendations
In September 2021, the Asset Management Company endorsed the recommendations of the TCFD, and joined
the TCFD Consortium, which is a group of domestic companies that support TCFD recommendations.
The Asset Management Company will declare its support for the recommendations of the TCFD, and promote
initiatives based on these recommendations.

14External Certi cations
GRESB Real Estate Assessment
GRESB is an annual benchmarking assessment to measure ESG (Environmental, Social and Governance)
integration of real estate companies and funds, as well as the name of organization which runs the assessment. It
was founded in 2009 by a group of major European pension funds who played leading roles in launching
Principles for Responsible Investment (PRI). The GRESB Real Estate Assessment is distinguished by its
comprehensive evaluation of sustainability e orts of real estate companies and REITs, etc., and not of individual
properties.
NAF has received a Green Star rating since it is highly evaluated in both areas Management Component andPerformance Component with regards to activities for environmental consideration and sustainability.
Moreover, NAF has received Two Stars in GRESB Rating by relative evaluation of total scores.

SMBC Environmental Assessment Loan
NAF has received an A rating for the SMBC Environmental Assessment Loan from Sumitomo Mitsui Banking
Corporation, as asset management is carried out with proper consideration for the environment and it wasdeemed in an assessment of environmental initiatives that NAF is at a high level in terms of understanding
environmental impact, environmental business, and the status of e orts for environmental conservation
measures.

15

DBJ Green Building Certification
DBJ Green Building Certification Program was launched by the Development Bank of Japan Inc. ("DBJ") in April
2011 for the purpose of supporting the properties which give proper care to environment and society (Green
Building). The program evaluates and certifies properties which are required by society and economy. It makes
comprehensive assessment of properties, while evaluating various factors which range from properties'
environmental features to their communication with stakeholders, such as disaster prevention and proper carefor surrounding communities.
For information on the Certification System for CASBEE for Real Estate, please refer to the following website.
Please click here for details of the DBJ Green Building Certification

Certification rank
★★★★★

★★★★

★★★

★★

★

Properties with thebest classenvironment &social awareness

Properties withexceptionally highenvironment &social awareness

Properties withexcellentenvironment &social awareness

Properties with highenvironment &social awareness

Properties withsatisfactory
environment &social awareness16

Properties with DBJ Green Building certi cation (As of April 19, 2023)
Name of property

Location

Certi cation rank Date of Certi cation

Okawabata Apartment Communities(River Point Tower)

Chuo-ku, Tokyo★★★★★

2022.2.28

Okawabata Apartment Communities(Park Side Wings)

Chuo-ku, Tokyo★★★★

2022.2.28

Park Axis Toyosu

Koto-ku, Tokyo★★★★★

2021.8.25

Park Cube Nishigahara Stage

Kita-ku, Tokyo★★★★

2021.2.16

Park Cube Meguro Tower

Meguro-ku, Tokyo★★★★

2023.2.24

Shibaura Island Air Tower

Minato-ku, Tokyo★★★★★

2021.2.15

Park Cube Atagoyama Tower

Minato-ku, Tokyo★★★

2022.2.10

Park Axis Toyocho Shinsui Koen

Koto-ku, Tokyo★★★★

2022.2.10

CASBEE Certification
CASBEE is an evaluation system for rating the environmental performance of buildings, developed under the
auspices of the Ministry of Land, Infrastructure, Transport and Tourism. The system rates the overall quality ofbuildings based on consideration for the environment, such as the use of energy-saving materials or equipment
or those with a low environmental impact, as well as consideration for the comfort inside the buildings,
landscaping and other factors.
Certification for CASBEE for Real Estate is rated in four scales: rank S, rank A, rank B+ and rank B.

Certi cation rank
Rank

Assessment

Scores for additional points

S

Excellent

78 points or moreA

Very Good

66 points or more

B+

Good

60 points or more

B

Satis es Criteria

50 points or more
17

Properties with CASBEE Certi cation (As of April 19, 2023)
Name of property

Location

Park Cube Meguro Tower

Meguro-ku, Tokyo

Certification
rank

Date ofCertification
2023.2.24

S
Park Axis Ochanomizu Stage

Bunkyo-ku, Tokyo

2023.4.6
A

Initiatives for Green Building Certification
Green building certifications are granted by third parties regarding initiatives for the reduction of environmentalload of buildings, improvement of comfort of users, etc. to assure high performance.
In an aim to increase the credibility and objectivity of its efforts to reduce environmental load as well as increase
the value of its buildings in the mid-to-long-term, NAF endeavors to utilize green building certifications fromthird parties.

Status of External Certification
Green Building Certification18

ESG-RELATEDINFORMATION DISCLOSURE
POLICY AND REPORTING
FRAMEWORK

Information Disclosure Policy
NAF and the Asset Management Company endeavor to disclose information on the status of their sustainability
initiatives to their investors and other stakeholders.

Scope of Report, Period Covered by the Report,
Updates
Scope of Report

Nippon Accommodations Fund Inc. and Mitsui Fudosan Accommodations FundManagement Co., Ltd.

Period Covered by the Report

Nippon Accommodations Fund Inc.

From March 1 to the end of February of the following year
(The report may also contain information for other scal years.)
Mitsui Fudosan Accommodations Fund Management Co., Ltd.

From April 1 to the end of March of the following year
(The report may also contain information for other scal years.)
Updates

Updated in May every year, in principle

19

Reference Guidelines
NAF will make reference to the Global Reporting Initiative (GRI) in releasing a variety of information regarding
sustainability.

Contact regarding ESG
Please contact the following for inquiries regarding ESG
Contact:

Mitsui Fudosan Accommodations Fund Management Co., Ltd.

Tel:

+81-3-3246-3677

Business Hours:

Monday through Friday 9.00 a.m. - 17.00 p.m.
(Excluding public holidays and days designated by the Asset Management
Company)

20

ENVIRONMENTALPERFORMANCE
Basic Philosophy on Environmental Consideration
Mitsui Fudosan Accommodations Fund Management Co., Ltd., the asset management company of NAF, provides its basic
philosophy on environmental consideration below as described in its Sustainability Policy.

Promoting Energy Saving and Reduction of CO2 Emissions
By promoting efficient use of energy in asset management activities and pursuing introduction of energy-saving
facilities, etc., the Company endeavors to reduce CO2 emissions through energy saving.

Preserving Water Environment and Promoting Resource Saving andWaste Reduction
The Asset Management Company aims to preserve the water environment by initiatives for saving water andintroduction of water-saving devices. The Company also pursues efforts to promote reduction of harmful substances,
resource saving, and waste reduction.

Environmental Management System/PDCA Cycle
The Asset Management Company established its own Environment Management System (EMS) and implements a PDCA
cycle every year in order to manage the environmental load of its real estate portfolio such as energy consumption, CO2
emissions, water consumption, etc., and achieve its targets.

Environmental Targets
We continuously monitor the amount of energy used in the common areas of the portfolio and continue to implement
initiatives to achieve the targets.

21

Indicator

Target（Target year：2030）

Energy-oriented CO2 emissions (based on intensity)

With actual consumption of 2015 as the base, 50% decrease inamount used

Water consumption (based on intensity)

With actual consumption of 2015 as the base, no increase inamount used

Green Building certified percentage（based on total
floor space）

40％※The Asset Management Company, while achieving the above medium-term targets, supports the international goals set forth by the Paris Agreement over thelong term, and will continuously promote initiatives for realizing net-zero greenhouse gas emissions by 2050 in order to contribute to mitigating climatechange.

Environmental Performance
Base year 2016（2015）

2017

2018

2019

2020

2021

2022 (vsChange
FY2015)

Total
(1000
kWh)

10,544

10,387

9,895

9,580

9,406

9,001

9,064

9,129

-13.42%

Intensity(1000
kWh/㎡)

52.05

50.93

48.32

46.55

45.38

43.23

42.44

42.13

-19.05%

Total
(1000
kWh)

9,800

9,650

9,111

8,839

8,659

8,434

8,414

8,440

-13.88%Intensity(1000
kWh/㎡)

48.38

47.32

44.49

42.95

41.78

40.52

39.40

38.95

-19.48%

Total (tCO2)

5,038

4,958

4,509

4,183

3,297

2,646

3,356

3,542

-29.69%Intensity(t-CO2/㎡)

0.02490.02430.02200.02030.01590.01270.01570.0163-34.26%

Total(㎥)

24,273

23,836

23,811

24,055

22,811

19,996

20,07820,180-16.86%

Intensity(㎥/㎡)

0.11980.11690.11630.11690.1101

0.0961

0.09400.0931-22.27%

Indicator/Unit

Energyconsumption

Electricity
consumption

CO2 Emission
Water
consumption※ Results are actual gures for the common areas in rental apartments among assets under management. For co-ownership properties, the gures areaccording to the ownership ratio.
※ Each of the intensity gures are calculated upon adjustment with the ownership period of each asset.
22Independent Practitioner's Review about Environmental
Performance
NAF has received assurance by a third party organization (Deloitte Tohmatsu Sustainability Co., Ltd.) in order to enhance
the reliability of the disclosed Environmental Performance data.

Independent Practitioner's Assurance Report
Issue date: 2021/6/23
Issue date: 2022/6/24

Green Building Certification
No. of properties

Total floor space（㎡）

Acquisition（％） rate

Total number of certified buildings

8

247,503.99

32.6

DBJ Green Building Certification

6

211,635,61

27.9

CASBEE Certification

2

35,868.38

4.7

23

ADDRESSING
CLIMATE CHANGE
Awareness of Climate Change
The Earth is undergoing global warming amid a scenario where concentrations of carbon dioxide (CO2) and other greenhouse gases in
the atmosphere have been increasing as a result of escalating energy consumption since the Industrial Revolution. Meanwhile, actions
to address climate change now constitute key challenges worldwide amid a scenario where the environment, society, the economy, andcorporate activities are being gravely a ected by intensifying storms, heat waves, droughts, rising sea levels and other such weatherrelated catastrophes. The member states at the 2015 Conference of the Parties to the United Nations Framework Convention on Climate
Change (COP) adopted the Paris Agreement, which aims to limit global warming to below 2℃, and preferably to 1.5℃, relative to levels
prior to the Industrial Revolution.
Mitsui Fudosan Accommodations Fund Management Co., Ltd. (the Asset Management Company ), the asset management company of
Nippon Accommodations Fund Inc. ( NAF ), recognizes that climate change is a key challenge that will substantially a ect NAF s asset
management and the Asset Management Company s business activities over the medium to long term. Meanwhile, NAF will actively
pursue opportunities while appropriately addressing risks associated with climate change in conjunction with the Asset Management
Company.

Support for Task Force on Climate-Related Financial Disclosures(TCFD) Recommendations
The Asset Management Company expressed its support for the recommendation of the Task Force on Climate-Related Financial
Disclosures in September 2021.

The Asset Management Company takes appropriate action and actively promotes information disclosure upon having analyzed andassessed effects of climate change on operations based on the TCFD disclosure recommendations.

24

TCFD recommended disclosure items
Disclosure items

Disclosure details

Governance

The organization’s governance concerning climate-related risks and opportunities

Strategy

The actual and potential impacts of climate-related risks and opportunities on the organization’s business, strategy
and financial planning

Risk
Management

The processes for identifying, assessing and managing climate-related risks

Metrics andTargets

Metrics and targets to assess and manage climate-related risks and opportunities

Governance and Risk Management
For the Asset Management Company s internal system for promoting sustainability, including the response to climate change, pleaserefer to Internal System for Promoting Sustainability .
As a rule, the Sustainability Promotion O ce monitors climate change-related risks and opportunities, metrics and targets, etc. once a
year, and these are discussed and assessed by the Investment Committee, whose members include the President & CEO of the AssetManagement Company. At the same time, the progress status of applicable initiatives is reported to NAF s Board of Directors. The
system also integrates company-wide risk management.

StrategyWith respect to this scenario analysis, NAF and the Asset Management Company reference the following scenarios.
Scenario

1.5℃/2℃ scenario

4℃ scenario

Illustrative
worldview

Progress is being made toward achieving a decarbonizedsociety for the sake of combating climate change. This calls
for measures to respond to various environmental laws andregulations, as well as real estate with excellent
environmental performance.

Insufficient progress made to combat climatechange is culminating in escalating severity ofnatural disasters, thereby giving rise to the need forsociety as a whole to strengthen measures forpreventing disasters.

Referencesources

IPCC Fifth Assessment Report (AR5) RCP 2.6
International Energy Agency (IEA) World Energy Outlook 2020
(NZE2050)

IPCC Fifth Assessment Report (AR5) RCP 8.5
International Energy Agency (IEA) World Energy
Outlook 2020 (SPS )※ IEA: International Energy Agency *IPCC: Intergovernmental Panel on Climate Change

Examination of Financial Impact Based on Scenario Analysis
NAF and the Asset Management Company examined the financial impact of identified risks and opportunities in terms of their
qualitative magnitude with respect to the aforementioned 1.5°C/2°C, and 4°C scenarios, as follows.
※ “Medium term” refers to the outlook for 2030, and “long term” refers to the outlook for 2050.
25

Risk Type

Risk and
Opportunity
Factors in Real
EstateManagement

Recognized Issues andPotential Financial Impact

Category Timeframe

Degree of Impact
1.5℃/2℃

４℃

Strategies to Address
Risks

Transition risks and opportunities

Increased GHG
emission costs(Note 1) due tointroductionof carbon tax
Policy andlegal

Increased operating
costs due tointroduction of carbon
tax and increased
carbon reduction costs
to meet emission
quotasRisk

Medium
term
Long
term

Medium

Small

Risk

Medium
term
Long
term

MediumSmall

Steep rise in current
electricity prices due tocarbon tax hikes

Tightening ofenvironmental
standards

Increased procurement
and repair costs forbuildings andequipment

26

Setting GHG
emission
intensity
reduction
targets anddisclosing
achievement
statusConsidering
energy-saving
upgrades forproperties
Procuring
renewableenergyAcquiring ZEH(Note 2)
properties andconsidering
retro tting ofexisting
properties
Sharingexpertise acrossthe Mitsui
Fudosan GroupRisk Type

Risk and
Opportunity
Factors in Real
EstateManagement

Recognized Issues andPotential Financial Impact

Category Timeframe

Degree of Impact
1.5℃/2℃

４℃

Strategies to Address
Risks

Transition risks and opportunities

Increased costs ofadapting to changing
building speci cation
requirements/standards
as products created bytechnologicalrevolution become
more widespread

Technology

Evolution andspread ofrenewableenergy andenergy-saving
technologies

Risk

Long
term

MediumSmall

Gathering
information
about newtechnologies
and services
and considering
implementation
policySharingexpertise acrossthe Mitsui
Fudosan Group

Small

Setting GHG
emission
reduction
targets anddisclosing
progress status
Considering the
introduction ofrenewableenergygenerating
facilities
Consideringand pursuingplannedenergy-saving
upgradesSharingexpertise acrossthe Mitsui
Fudosan Group

Reduced environmental
footprint and energy
costs due to theinstallation of LED
lighting, high-e ciency
A/C equipment, etc. andintroduction ofrenewable energy
facilities
Opportunity

27

Mediumterm

Large

Risk Type

Risk and
Opportunity
Factors in Real
EstateManagement

Recognized Issues andPotential Financial Impact

Category Timeframe

Degree of Impact
1.5℃/2℃

４℃

Strategies to Address
Risks

Transition risks and opportunities

Lower values forproperties with poor
environmental
performance (strandingof assets)

Impact on realestatetransaction
markets

Risk

Short
term

Large

MediumMarkets

Worse funding
conditions due toclimate change
response being
perceived as insu cient
Impact on
funding
markets

Improved funding
conditions due toproactive climatechange response

Risk

Short
term

MediumSmall

Opportunity

Medium
term

Large

Small

28

Striving togatherinformation onreal estate
assessment
trends andeitherimprovingproperties
environmental
performance ordisposing ofthem
Setting GHG
emission
intensity
reduction
targets anddisclosing
achievement
statusConsidering
energy-saving
upgrades forproperties
Procuring
renewableenergyComprehensive
climate-related
nancialinformation
disclosure
Ongoing
implementationof greennancing
Pursuing theacquisition ofenvironmental
certi cations(green building
certi cations,etc.)Risk Type

Risk and
Opportunity
Factors in Real
EstateManagement

Recognized Issues andPotential Financial Impact

Category Timeframe

Degree of Impact
1.5℃/2℃

４℃

Strategies to Address
Risks

Transition risks and opportunities

Avoidance of properties
with poor
environmental
performance, leading todecreased demand
Impact on
rental housing
markets
Markets

Impact on
operatingcosts

Reputation

Reducedbrandreputation on
nancial andcapitalmarkets

Risk

Mediumterm

Improved
competitiveness forproperties withexcellent environmental Opportunity Medium
term
performance

Increased running costs
due to steep rise inenergy prices
Increased renewableenergy costs due tochanging energy mix

Risk

Decreased investment
unit value due toperceived passive
response to climatechangeRisk

29

Mediumterm

Medium
term
Long
term

Large

Small

Large

Small

MediumLarge

Monitoringneeds throughtenantsatisfaction
surveys, etc.
Considering
energy-saving
upgradesPursuing theacquisition ofenvironmental
certi cations(green building
certi cations,
etc.)

Small

Purchasing
renewableenergy (green
power
certi cates,
etc.)

Small

Maintaining
brand image by
proactively
pursuing
initiatives
aimed at adecarbonizedsociety androbustly
addressing
climate changeRisk Type

Risk and
Opportunity
Factors in Real
EstateManagement

Recognized Issues andPotential Financial Impact

Category Timeframe

Degree of Impact
1.5℃/2℃

４℃

Strategies to Address
Risks

Physical risks and opportunities

Acute

Torrential
rainfall,ooding due
to nearby
riversover owing,
inlandoodingReduced rental income
due to lower occupancy
rates
Increased ood
countermeasure costs

Damage toproperties
fromtyphoons

Increased repair costs
and insurance
premiums

Flooding of
low-elevation
properties,
etc. due torising sea level
Chronic

Increase inhigh-water
damage due
to rise inabnormalweather, suchas extremely
hot or cold
days

Increased costs ofcountermeasures forhigh-water damage

Increased A/Cequipment
maintenance andoperation costs

Risk

Short
term
Medium
term

Small

Large

Risk

Mediumterm

Medium

Large

Risk

Medium
term
Long
term

Small

Large

Risk

Medium
term
Long
term

MediumLarge(Note 1) GHG refers to greenhouse gases.
(Note 2) ZEH is an abbreviation for net-zero energy home.

Metrics and Targets
Environmental Targets
For information on metrics and targets, please refer to Environmental Targets and Environmental Performance.

30

Monitoring
physical risks,
identifying
high-risk
properties, andeither taking
preventive
measures ordisposing ofthem
Re ectingphysical risk
information in
the assessment
process when
acquiring newproperties
Managing A/Cequipment
maintenanceand operation
costs

INITIATIVES TOADDRESSENVIRONMENTAL
CHALLENGES

Energy consumption/CO2 emission volume
Improvement of Environmental Performance ThroughBuilding/Facility Renovations/Retro ts
Promotion of energy-saving through installation of LED lighting in common areas
Promoting energy-savings for the portfolio and initiatives such as the conversion to LED lighting and airconditioning repair works at assets under management.

31

River Point Tower Replacement of air-conditioners/Reduction of CO2 emissions
Worked to reduce energy consumption of each housing units by changing the air-conditioning system from
Housing Heating Total
System (HEATS) to electric heat pump air-conditioners.

Introduction of Renewable Energy
NAF utilizes renewable energy from solar generation at some of its assets under management.

32

Water resources
Installation of water-saving devices
At Okawabata Apartment Communities, we are seeking to reduce water consumption by installing water-saving
showers, sinks, sanitary equipment, and other such amenities when renovating private areas.

Use of rainwater for irrigation
On Shibaura Island, rainwater is stored and utilized to water green spaces, aimed at reducing the amount ofwater used.

Biodiversity
Habitat Conservation: Sponsoring the
Karugamo Project
The Karugamo Project started as an initiative of the Minato Ward
Bay Area Power Up Project, which serves as a body enlisting
involvement of ward residents associated with the Minato Ward
Shibaura-konan Regional City O ce situated in the vicinity of
Shibaura Island. We sponsor their activities to develop an
environment that allows karugamo (spot-billed ducks) to rest, as
they used to do, in arti cial nests placed in the canal. Throughthese activities, we are making e orts to preserve the ecosystemand biodiversity.

33Collaboration with tenants and stakeholders on
environmental matters
Environmentally-friendly initiatives through collaboration withproperty management companies
NAF entrusts the property management of its assets under management to Mitsui Fudosan Residential Lease Co.,
Ltd. ( Mitsui Fudosan Residential Lease ), which has proactively worked on environmental consideration, etc.
under the Group Environmental Policy set forth by the Mitsui Fudosan Group and promoted initiatives forenvironmental consideration in collaboration with NAF.
Social Contribution and Environmental Initiatives (Mitsui Fudosan Residential Lease Co., Ltd. website)
Japanese only

Initiatives for Environmental Consideration in Collaboration with
Tenants
Collaborating with Mitsui Fudosan Residential Lease Co., Ltd., the PM company, NAF has raised tenant awarenessto save energy by distributing a guidebook to tenants upon their move-in, providing information through its
website, and other measures to promote reduction of environmental load in exclusive areas at NAF s portfolio
properties.
A Guide to Housing and Daily Living Japanese only
There Go the Specially Assigned Investigators Eco-G-Men! Japanese only
*Mitsui Fudosan Residential Lease Co., Ltd. website

Initiatives for Environmental Consideration in Supply Chain
Upon selecting/evaluating a supplier, which is important in NAF s asset management, NAF keeps in mind topromote sustainability throughout its supply chain by con rming the supplier s initiatives on environment/social
consideration, etc. as well.

34

SOCIAL AND
LOCALCOMMUNITYINITIATIVES
Basic Philosophy on Social Considerations
As a member of society that interacts with various stakeholders, NAF recognizes that we can conduct our own
sustainable business activities by fulfilling our social responsibilities. NAF will continue to promote ESG
management while valuing the trustworthy relationships we have established with our stakeholders andmeeting their expectations.
For details, see Stakeholder Engagement.

Initiatives to Improve Tenant Satisfaction
The Asset Management Company strives to improve the security, safety, and comfort of NAF's assets undermanagement and to improve tenant satisfaction.

Investment in High-Quality Rental Apartments
With regard to rental apartments, NAF's primary assets under management, we build our portfolio by placing thePark Axis series planned and developed by the Mitsui Fudosan Group at the core of brand strategy along with thePark Cube series which is similar in quality with the Park Axis series.
In order to enhance recognition and familiarity of the Park Axis and Park Cube series as high-quality residence
brands in the rental apartment market, the Asset Management Company develops its brand strategy, including
provision of superior quality over the long term to tenants, by collaborating with the Mitsui Fudosan Group.
Mitsui Rental Housing Park Axis Series (RESIDENT FIRST CO., LTD. website) Japanese only

35

Renovation of Common Areas
In order to maintain the asset value of assets under management over the long term, upgrading and renovations
are implemented as necessary.

Provision of Security and Safety
NAF entrusts the property management of its assets under management to Mitsui Fudosan Residential Lease Co.,
Ltd. NAF collaborates with the company in conducting the following initiatives to improve security and safety for
tenants.
We have set up an around-the-clock, toll-free number exclusively for tenants for responding to problems
regarding building facilities such as water leakage.
Mitsui customer support center C-desk(Mitsui Fudosan Residential Lease Co., Ltd. website) Japanese only

We strive to provide information for security and safety to tenants by distributing disaster-response
handbooks to tenants, in addition to opening a website offering information on local governments anddisaster prevention to help them prepare for earthquakes and other disasters in advance.
Information for Security and Safety (Mitsui Fudosan Residential Lease Co., Ltd. website) Japanese only
※Mitsui Fudosan Residential Lease Co., Ltd. website

36

Tenant Satisfaction Surveys
Mitsui Fudosan Residential Lease Co., Ltd, the property management company, conducts periodic tenantsatisfaction surveys in the form of questionnaires to improve management operations.

Survey design
Objective

Administered to assess tenant satisfaction, needs, etc.

MethodOnline survey

AdministeredtoNumber of tenants in properties managed by Mitsui Fudosan Residential Lease Co., Ltd.: 26,798
Includes all 10,587 tenants (as of the time of the survey) of assets under management by
Nippon Accommodations Fund Inc.

Administration
dates

February 19 to March 6, 2022

Organization
administering
surveyCommissioned to external research firm

Survey ndings
Tenants occupying 2,251 units of the 10,587 units constituting properties owned by NAF replied to the survey.
(Response rate: 21.3%)

Pro le of survey content (examples)
Satisfaction survey (ex. I): Satisfaction with the property management company (Mitsui
Fudosan Residential Lease Co., Ltd.)
Some 75.4% of those responding to the survey selected one of the top two multiple choice options (1. Verysatis ed or 2. Somewhat satis ed) with respect to their overall assessment of the quality of customer support
provided by Mitsui Fudosan Residential Lease Co., Ltd. serving as the property management company.

Findings regarding quality of customer support with respect to upkeep and management of entire building, support in addressing problems, andformalities and procedures indicate no signi cant disparity between tenant expectations prior to taking up residence and tenant satisfaction
subsequent to taking up residence.

37

38

Satisfaction survey (ex. II): Satisfaction with rental property
Tenants were generally satisfied with the rental properties, but deemed that kitchens and storage spaces are too
small. In addition, about 20% of respondents indicated that their Internet connections are unstable or slow.
Lighting

Adequate (86.9%)

Elevator speed

Adequate (78.9%)

Size of kitchen

Adequate (52.3%) + Too small (47.5%)→ 66.2% use cupboards

Size of sinks

Adequate (82.2%)

Size ofmodularbathroom

Adequate (79.9%)

Size of storage
space

Adequate (52.4%) + Too small (47.4%)

Internetconnection

Unstable (23.9%) / Slow (19.3%)

Bicycle sharing/ Car sharing

18.6% use bicycle sharing / 21.0% use car sharing

Needs survey (ex. I): Tenant engagement in telework (changing tenant needs brought
about by the COVID-19 pandemic) Some 57.1% of respondents engage in telework atleast once per week.

39

Needs survey (ex. II): Awareness among tenants regarding their roles in helping toachieve a low-carbon society
NAF’s tenants are subject to lease agreements that ask them to make their best efforts to save electricity andreduce waste. In addition, NAF raises awareness regarding the need for tenants to conserve energy in theireveryday lives in part by providing tenants with guidebooks distributed to them when they take up residence.
Through such initiatives, NAF intends to persistently monitor the extent to which awareness among tenantschanges in terms of their role in helping to bring about a low-carbon society.
Findings of the survey indicate that 20.5% of respondents engage in lifestyles attuned to the need for
decarbonization.
Moreover, this rate of engagement in environmentally-sound practices appears to be trending higher in step withlevels of rents and annual household incomes.

Supply Chain Initiatives
Upon selecting/evaluating a supplier, which is important in NAF's asset management, NAF keeps in mind thepromotion of sustainability throughout its supply chain by confirming the supplier's initiatives on social
consideration/environment, etc. as well.
Furthermore, Mitsui Fudosan Residential Lease Co., Ltd. has a basic policy of prioritizing business continuity andearly restoration in light of its social responsibility as a company that continually supplies buildings securely andsafely. Such stance was recognized, and the company acquired "Resilience Certification" backed by the JapaneseCabinet Secretariat in August 2016.
News release concerning acquisition of Resilience Certification (Mitsui Fudosan Residential Lease Co., Ltd.
website) Japanese only40

Initiatives for Local Community
Cooperation in Local Events
At the Okawabata Apartment Communities, NAF has proactively cooperated in activities of the management
association and strives to contribute to formation of a local community.

Installation of Share-Bicycle Ports
NAF has cooperated in installing bicycle ports for bicycle-sharing services at some of its assets undermanagement, contributing to reduction of CO2 emissions as well as promoting health in the areas.

Shibaura Sanbashi Canal Cruise (Shibaura Cruise Program)
At Shibaura Island Air Tower, an asset under management, NAF has cooperated in/co-sponsored the "Canal
Renaissance Program for Promoting Waterfront Vitalization" by Bureau of Port and Harbor, Tokyo Metropolitan
Government, and contributed to revitalization of local communities, etc.
Shibaura Cruise Program (external website) Japanese only

41

HUMANRESOURCE
DEVELOPMENT
Personnel and Human Resources Strategy
Having set its basic policy for its personnel and human resources strategy as “We will help to maximize unitholder value by
having every officer and employee enhance their expertise, as well as by elevating our organizational strengths by putting eachand every officer and employee on a trajectory that aligns with corporate policy,” the Asset Management Company carries out
human resource management by breaking its activities down into the following three organizational and human resource aims.
1. We seek to serve as a group of specialists equipped with sophisticated expertise in specific domains and also with knowledgeof general corporate affairs encompassing a wide-ranging perspective.
2. We seek to serve as a group of early-career, mid-career, and veteran professionals who work passionately toward fulfilling theirrespective roles.
3. We seek to serve as a group that gives rise to an organizational culture characterized by active engagement in work.
To achieve these aims, we implement respective initiatives of the asset management company encompassing recruitment,
personnel allocation, training, personnel evaluations, and promotion and remuneration.

Capacity Development
As part of developing the capabilities of officers and employees, company-wide group training is implemented, and participationin the system for taking external training and various other types of internal and external training, seminars, etc. is recommended
and promoted.

Company-wide Group Training
The Asset Management Company carries out group training regarding themes such as compliance four or more times per
year.
Compliance training
Training regarding the Act on Protection of Personal Information
Information security training
Human rights education training
ESG training

42System for taking external training & Seminar participation and support
SMBC business seminars
Association for Real Estate Securitization & Investment Trusts Association, Japan seminars
Mitsui Fudosan Group training
Other training/seminars

Training data
Annual totalof hours
spent foreducationand training(*1)
Hours oftraining per
officer andemployee(*2)(hours/year)

Fiscal2015

Fiscal2016

Fiscal2017

Fiscal2018

Fiscal
2019

Fiscal
2020

Fiscal2021

Fiscal2022

42.2 hours

100.4
hours

206.6
hours

215.8
hours

279.2
hours

230.3
hours

283.6
hours

398.4
hours

1.7
hours/year

4.0
hours/year

8.6
hours/year

8.6
hours/year

12.1
hours/year

9.6
hours/year

11.8
hours/year

15.3
hours/year（*1）:Hours spent for education and training, etc. for full-time employees, contract employees and employees seconded from other companies, excluding officers.
（*2）: Calculated by dividing the total hours spent for education and training in each fiscal year by the number of employees (full-time employees, contract employees andemployees seconded from other companies) enrolled as of the end of each fiscal year, excluding officers.

Support for Education and Training
The Company encourages and supports its employees to participate in a variety of internal and external education and training
sessions, etc. as part of the efforts to foster their capabilities.

Support for Acquisition of Qualification

as of the end of March 2023

Qualifications, etc.

No. of holders (*)

ARES (The Association for Real Estate Securitization) certified master

14

Real estate broker

19First-class registered architect

1

Second-class registered architect

2

Interior coordinator

3

Licensed representative of condominium management company

6

Licensed strata management consultant

243

Qualifications, etc.

No. of holders (*)

First-class building operation and management engineer

2

Condominium renovation manager

1

First-class renovation stylist

1

Certified property manager

6

Condominium maintenance and repair technician

1

Real estate Consulting Master2

Urban Renewal Planner

1

Certified tax accountant

1

Chartered member of The Securities Analysts Association of Japan2

ECO kentei

6

Information Security Management Examination

1

Career consultant

1

Housing Environment Coordinator2administrative scrivener

1※Represents the sum total of the qualification holders among full-time employees, contract employees and employees seconded from other companies, excluding officers.
※Includes persons who have passed the examinations but have not yet registered.

Support for Education and Training
The Company encourages and supports its employees to participate in a variety of internal and external education and training
sessions, etc. as part of the efforts to foster their capabilities.

44Personnel evaluations and remuneration
We have adopted a personnel evaluation system under which we assess the implementation of tasks by employees in terms of
their performance and capabilities, from a multi-faceted perspective including their endeavors on sustainability. To help
employees improve their capabilities, we provide them with feedback on their evaluation every year, thoroughly focusing on
informing them of the details in an accurate and speci c manner.

Evaluation scheme
Evaluation
components

Description

Performanceappraisal

Assessment of
implementation
process and extent
of execution withrespect to thepriorities, roles, andother assumed
duties of theemployee set at the
beginning of thescal year

Behavioral
appraisal

Assessment
regarding the extent
to which theemployee has
engaged in actions
desired based on
our corporate values

E ect on promotion and remuneration

Evaluation period

Pay increase＜First half of scal
year＞ April 4to
September 30＜Second half ofscal year＞
October 1 to March
31

April 1to March 31

Promotion anddemotion

Bonus

〇

Pay
adjusted
to re ectaverage of
rst half
appraisalandsecondhalf
appraisal

〇

〇

Pay
adjusted
to re ectappraisal
resultsー

Bonus
adjusted tore ectsemiannual
appraisals〇

Determinedbased on pay
increase
review
acrossmultiple
scal years〇

Elements of the performance appraisal
Component

Appraisal element

De nition

PerformanceContribution toorganizational results

The extent to which the employee has contributed to organizational results bycarrying out his or her priorities and assuming his or her roles

Process

Productivity

E ciency in carrying out professional duties

Level of di culty

Level of di culty of priorities and roles, and level of di culty inherent to internaland external environmental factors, etc.

45

Leveraging the Expert Abilities of External Human Resources from theSponsors, etc.
The Asset Management Company takes in human resources with high expertise from its sponsors and other sources, leverages
their expert abilities and strives to realize sophisticated asset management operations. The number of human resources taken infrom the sponsor and other sources is as follows.
as of the end of March 2023, including o cers
Company name

No. of people

Mitsui Fudosan Co., Ltd.

7

Mitsui Fudosan Residential Lease Co., Ltd.

2

Sumitomo Mitsui Banking Corporation

1

RWA Accounting Holdings Co., Ltd.

1
Total

11

46

Data on Human Resources
Item

Fiscal2015

Fiscal2016

Number offull-time
employees (*1)

Male

8

8

8

8

8

7

7

8

Female

5

6

6

7

7

8

7

7

Number ofcontract
employees (*1)

Male

0

0

0

0

0

0

0

0

Female

2

2

1

1

0

1

2

3

Number of
employees
seconded fromothercompanies (*1)

Male

9

9

9

9

8

7

7

7

Female

1

0

0

0

0

1

1

1

Total numberof
employees (*2)

Male

17

17

17

17

16

14

14

15

Female

8

8

7

8

7

10

10

11

32%

32%

29.2%

32%

30.4%

41.7%

41.7%

42.3%

Male

─

─

6.9years

7.9years

8.9years

10.2years

10.1years

9.7years

Female──

7.9years

7.6years

8.6years

7.6years

7.8years

8.2years

Overall──

7.3years

7.8years

8.8years

8.7years

8.8years

8.9years

Male

0

0

0

0

0

0

1

1

Female

0

1

0

1

0

2

0

1

Ratio of female employees
newly hired by theCompany (*4)

─

100%

─

100%

─

100%

─

50%

Number of persons wholeft the Company (*4)

0

0

0

0

1

1

2

0

Ratio of the used portionof employees' paid
leave (*5)

56.3%

77.0%

83.0%

88.0%

96.4%

65.3%

79.6%

79.7%

Ratio of female
employees (*2)
Average lengthof service attheCompany (*3)
Numberemployees
newly hired bytheCompany (*4)

Fiscal2017

Fiscal2018

47

Fiscal
2019

Fiscal
2020

Fiscal2021

Fiscal2022

Fiscal2015

Fiscal2016

Fiscal2017

Fiscal2018

Fiscal
2019

Fiscal
2020

Fiscal2021

Fiscal2022

Ratio of employees
undergoing medical
examinations (*6)

100%

92.9%

100%

100%

100%

100%

100%

94.4%

Number of employees
taking childcare leave,
etc. (*7)

1

1

1

1

1

1

0

0

Number of employees
taking caregiver leave,
etc. (*8)

0

0

0

0

0

0

0

0

Number of employeeswith reduced working
hours

0

1

1

1

1

1

1

1

Item

During the past three years, the Asset Management Company has not conducted any acquisitions or mergers that resulted inpersonnel reductions, or implemented any large-scale personnel reductions, etc.
※1: Figures are as of the end of each fiscal year. Employees seconded do not include officers.
※2: Figures are the total of the number of full-time employees, contract employees, and employees seconded from other companies (excluding officers). Figures are as ofthe end of each fiscal year.
※3: Figures are average length of services of employees hired at the Company as of the end of March. Figures are calculated by dividing the total length of services by the
number of the employees, based on the calendar year.
※4: Figures are compiled for the employees hired at the Company.
※5: Figures represent the ratio of employees, based on the calendar year (i.e. fiscal 2022 in this case is from January 1, 2022 to December 31, 2022). Ratio of the used
portion of employees' paid leave is calculated by dividing the number of days of paid leave taken by employees by the number of paid leave days initially granted to
employees at the beginning of the year. (excluding new hired employees and resignees)※6: Figures represent the cumulative number of full-time employees and contract employees undergoing medical examinations/health screening within the fiscal year.
※7: Figures represent the cumulative number of full-time employees and contract employees who have utilized either one of the time off for childcare leave program,sick/injured childcare program, program for reduced working hours during childcare or program for taking measures to reduce working hours during childcare.
※8: Figures represent the cumulative number of full-time employees and contract employees who have utilized either one of the caregiver leave program, time off for
caregiver leave program or program for reduced working hours during nursing care.

48

EMPLOYEEHEALTH AND
SAFETY
Implementation of Periodic Medical Examinations, etc
Putting officers' and employees' health first, the Asset Management Company obliges them to undergo medical
examinations and works to increase the rate at which they are conducted.
Moreover, the Company has established a program for employees older than a certain age to take leave toundergo thorough health screening and provide them with subsidies for undergoing such health screening andother examinations, in an effort to support and promote proactive health management of employees.
Furthermore, the Company subsidizes influenza vaccinations for employees.
Please refer to “Data on Human Resources” to access the ratio of employees undergoing medical examinations.

Special Leave Program
In addition to annual paid leave, the Asset Management Company has set up a special leave program that
includes such leave as indicated below:
Summer leave, marriage leave, leave for thorough health screening, paternity leave, menstrual leave, prenatal
checkup and pregnancy disability leave, maternity leave, caregiver leave and time off for sick/injured childcare

Questionnaire on Employees Satisfaction of O ce
Environment
To maintain and enhance o cers and employees health and amenity of the o ce during working hours, theAsset Management Company carries out annual survey on their satisfaction of o ce environment. The Company
takes in consideration of the survey results and comments from our o cers and employees when planning
improvement in o ce environment.

Introduction of system for remote work

The Asset Management Company supports the work-life balance of each employee, and has established aextime system and remote work system to enhance the organization, level of each person s work andproductivity, and to play an even more active role as a company.
49

HUMANRIGHTS
Human rights and accordingly engage in endeavors to form a workplace environment premised on our belief
that unitholder value is enhanced through initiatives that entail prohibiting discrimination based on such factors
as belief, religion, age, sex, origin, mental and physical disorder, as well as sexual orientation and gender identity(LGBT), as well as establishing a workplace environment that values diversity and empowers a variety of humanresources. Moreover, we do not engage in practices that involve child labor, forced labor, unjust wage reductions
or unfairly prolonged work hours.

Mitsui Fudosan Group Human Rights Policy
Seeking to coexist in harmony with society, link diverse values, and help build a sustainable society, as
symbolized by its “ ” corporate logo, the Mitsui Fudosan Group strives to help build a society of abundance forboth people and the planet. In order to live up to the philosophy symbolized by our “ ” corporate logo, we
believe that it is of the utmost importance to ensure that our business always gives due consideration to humanrights, so we have established the Mitsui Fudosan Group Human Rights Policy (hereinafter this Policy).
This Policy is based on the Guiding Principles for Business and Human Rights advocated by the United Nations.

Human rights training
Please refer to “Company-wide Group Training” of “Human Resource Development.”

Prohibition of harassment
The Asset Management Company explicitly prohibits any and all forms of harassment (sexual harassment, power
harassment, maternity harassment, paternity harassment, LGBT discrimination, etc.), premised on the notionthat creating and maintaining business environments where all officers and employees are respected as
individuals and are able to work in a spirit of mutual trust is of great importance.
We seek to enlist the efforts of all officers and employees in creating workplace environments that are free ofharassment, premised on our understanding of the views of the Asset Management Company regarding
prohibition of harassment.
50

DIVERSITY &INCLUSION（D&I）
Diversity & Inclusion Declaration
The “ ” logo adopted by Mitsui Fudosan Group as a management philosophy represents the principles ofcoexisting in harmony with society, linking diverse values, and achieving a sustainable society.
As an asset management company that operates as a group entity of Mitsui Fudosan Group, the driver of ourefforts to continuously provide new value is a major asset of ours-our people. Therefore, we have positioned thepromotion of diversity and inclusion as one of our most vital management strategies, and the Group is coming
together as one to create an organization in which personnel with diverse values, capabilities, and lifestyles candemonstrate each to the best of their abilities.

Diversity & Inclusion Initiative Policy
Our passionate, capable employees have a diverse range of skills, experiences, and values; as such, we areworking to ensure an environment where each officer and employee can demonstrate their individual abilities tothe utmost, and recognize one another as individuals, evaluated fairly regardless of their race, nationality,
religion, sex, age, presence or not of disability, gender identity, sexual orientation, or other characteristics. To
this end, we are promoting workstyle reforms and enhancing our human resources system so as to raiseorganizational productivity and our officers and employees’ work-life balance.

Initiative Policy to Introduce Diverse Workstyles
We seek to maintain and promote good health of each officer and employee, embrace diversity of values andlifestyles, and strive to help our employees achieve work-life balance such that enables them to work with peaceof mind aligned with their individual circumstances.

51

Promoting empowerment of women
We work to create a workplace environment that is friendly for female workers, in an effort to realize a workplacein which each officer and employee can exert their capabilities to the fullest.
Moreover, on top of adopting a childcare leave program, we promote flexible work hours with reduced working
hours and encourages employees to proactively take paid leave.

Support for childcare
We have established the following programs to support work balance for officers and employees involved inchildcare:Childcare leave program, time off for sick/injured childcare program, program for reduced working hours duringchildcare and program for taking measures to reduce working hours during childcare

Support for nursing care
We have established the following programs to support work balance for officers and employees involved innursing care:
Caregiver leave program, time off for caregivers program and program for reduced working hours during nursing
care

Introduction of system for remote work
The Asset Management Company supports the work-life balance of each employee, and has introduced aextime system and remote work system to enhance the organization, level of each person s work andproductivity, and to play an even more active role as a company.

52

NAF’SCORPORATEGOVERNANCE
Executive Directors and Supervisory Directors
4 in total (1 Executive Director and 3 Supervisory Directors)
Ratio of female directors: 25%
Criteria for Election of Directors
Selection of candidates for Director is premised on the notion that they are not subject to grounds fordisqualification as stipulated in the Act on Investment Trusts and Investment Corporations and other laws andregulations (Article 98 and Article 100 of Act on Investment Trusts and Investment Corporations and Article 244 of
the Regulation for Enforcement of the Act on Investment Trusts and Investment Corporations). They areaccordingly elected by resolution of the General Meeting of Unitholders based on the reasons for their election
set forth below. There are no special interests whatsoever between the Directors currently serving on the Boardof Directors and NAF.
Reasons for election of Executive Director: An Executive Director must have extensive experience andknowledge of the real estate business.
Reasons for election of Supervisory Director: A Supervisory Director must be an attorney at law, certified
public accountant, real estate appraiser, or other such external expert, and must be capable of supervising
Executive Directors in executing their duties and performing a checking function.

53

Position
Name

Executive Director

Takashi Ikeda

Position
Name

Supervisory Director

Mika Etoh
Position
Name

Supervisory Director

Eiki Enomoto

year andmonth

Brief personal history

April
1972

Joined Mitsui Fudosan Co., Ltd.

April
2003

Appointed as Group Officer of Mitsui Fudosan Co., Ltd.
Appointed as Vice President & Representative Director of Mitsui Real Estate
Sales Co., Ltd.c (current Mitsui Fudosan Realty Co., Ltd.)

April
2006

Appointed as CEO of Mitsui Fudosan Housing Service Co., Ltd.
(current Mitsui Fudosan Residential Service Co., Ltd.)

April
2011

Appointed as Advisor of Mitsui Fudosan Co., Ltd.
Appointed as Chairman of Mitsui Fudosan Housing Service Co., Ltd.
(current Mitsui Fudosan Residential Service Co., Ltd.)

May
2017

Appointed as Executive Director, Nippon Accommodations Fund Inc.
（current）

year andmonth

Brief personal history

September
2008

Appointed as Director, Etoh Real Estate Appraisal Co., Ltd.
Real Estate Appraiser (current）

May 2021

Appointed as Supervisory Director, Nippon Accommodations Fund Inc.
（current）

year andmonth

Brief personal history

January
2019

Established ENOMOTO&FUJIMOTO LAW OFFICE Attorney at Law (current）

May
2021

Appointed as Supervisory Director, Nippon Accommodations Fund Inc.
（current）
54

Position
Name

Supervisory Director

Seiji Iwatani

year andmonth

Brief personal history

June
2001

Established Iwatani CPA Office CPA (current)

May
2023

Appointed as Supervisory Director, Nippon Accommodations Fund Inc.
（current）

Remuneration of the Independent Auditor
The amount of remuneration of the Independent Auditor is set by the Board of Directors with a cap of 20 million
yen for each operating period, paid in 3-month installments by the last day of February, May, August andNovember each year by bank transfer to the account stipulated by the Independent Auditor.
Name

Details of remuneration

KPMG AZSA LLC

Audit-based remuneration

Total remuneration
33rd Period(ended August 31, 2022)

34nd Period(ended February 28, 2023)

12,690 thousand yen※

12,480 thousand yen※The total amount of remuneration paid to KPMG AZSA LLC includes remuneration (150 thousand yen) for services other than those stipulated in
Article 2, paragraph (1) of the Certified Public Accountants Act.

55

MANAGEMENTSTRUCTURE
Management Structure
NAF’s asset management is consigned to the Asset Management Company. The Asset Management Company
conducts operations under the following organizational structure based on the REIT Management Agreement
entered into with NAF.

For details of Management Structure, please refer toCorporate Structure, 3) Management Structure of NAF (Excerpts from the Securities Report).

56

The Asset Management Company s Decision-Making
Process Flow for Acquiring or Selling Investment
AssetsThe Asset Management Company s Decision-Making Process Flow
for Acquiring and Selling Assets Under Management*1 When NAF acquires or sells of assets in transactions with related parties as defined by the Investment Trust and Investment Corporation Act ofJapan, the Asset Management Company must obtain consent from NAF based on the approval of NAF’s Board of Directors prior to the deliberationsof the Investment Committee. However, such consent is not required for property or other real estate acquisitions stipulated by Article 245-2-1 of theInvestment Trust and Investment Corporation Act as having immaterial impact on NAF’s assets because the acquisition cost represents less than 10
percent of the book value of NAF’s investment properties.

57

Compliance Checking System
1 Approval by Chief Compliance O cer (CCO)

The following require approval of the Compliance Committee

Related-party transactions*2
When CCO determines that a compliance issue has arisen*2 Property acquisition price from sponsor-related parties is below appraisal value

2 The Compliance Committee

The Compliance Committee
Members: CCO (Chairperson),CEO, 2 external professionals (Currently 1 lawyer and 1 CPA)
External professionals: Appoint professionals independent from sponsor-related parties
Resolution: Requires the votes of 2/3 or more members and at least 1 of the 2 independent external
professionals

3 Functions as a Check on the Investment Committee

CCO can suspend discussion when he sees any problem in the discussion process

58

COMPLIANCESTRUCTURE
Nippon Accommodations Fund Inc. (“NAF”) and have adopted a basic policy whereby they have established anorganizational structure for invariably engaging in fair business transactions acting in compliance with laws andregulations and strive to earn the trust of investors by engaging in behavior that reflects high ethical standards.
In addition, the Asset Management Company strives to establish an appropriate management structure giventhat it recognizes that the management operations it carries out on behalf of NAF are important in that they
involve management of unitholder funds.

Thorough Compliance
The Company has established an organizational structure that should secure compliance with laws andregulations and implement fair transactions at any time. At the same time, the Company works to ensure that its
officers and employees will act based on high ethical values and win the trust of its stakeholders.
Mitsui Fudosan Group Compliance Policy

Compliance Structure
Organizational components relevant to compliance are as follows.

Board of Directors
The Board of Directors makes decisions on matters of fundamental importance to management including those
involving management strategies, and also resolves matters with respect to election and dismissal of the Chief
Compliance Officer (CCO) and external members of the Compliance Committee.

59Compliance Committee
The Asset Management Company has established the Compliance Committee, which deliberates and makes
decisions on business transactions potentially subject to conflicts of interest, legal compliance, and other suchimportant matters related to compliance. The committee is composed of the CCO (chairperson), the President &CEO, and two external professionals.

Chief Compliance Officer (CCO)
To establish an appropriate asset management structure for facilitating asset management operations carriedout by the Asset Management Company, we have appointed a CCO, who exclusively handles complianceindependent from the organization, and ensure effectiveness of the internal check functions with respect toother business units.

Compliance Manual Formulation and
Implementation
The Asset Management Company has prepared a compliance manual, which is to serve as a code of conduct onmatters of compliance.
We also establish yearly compliance programs, which are to serve as specific action plans regarding compliance.
Upon having formulated the preliminary draft of a compliance program, we explain such details to all officers
and employees and elicit their feedback. We then formulate the final draft incorporating such feedback asnecessary. Next, we have the Compliance Committee and Board of Directors furnish their approval before
subsequently taking steps toward putting the program into action.

Internal Audits
CCO conducts internal audits across all organizational units and job categories to confirm whether business andoperations of each unit is carried out appropriately and efficiently in accordance with laws and regulations aswell as other rules and bylaws, based on the internal audit rules set forth in the internal rules of the AssetManagement Company. The results of audits are reported to the audited business units, the Compliance
Committee and the Board of Directors.

60

Training
Please refer to “Company-wide Group Training”

Responding to Anti-social Forces
The Asset Management Company has established specific procedures for preventing business dealings with antisocial forces and contending with unreasonable demands from anti-social forces in its compliance manual andits internal rules for policy against anti-social forces. These are to serve as guidelines to which all officers andemployees must comply.
As part of our efforts to refuse all ties with anti-social forces, we have appointed a CCO as the person in charge,
built a centralized management system and strive to prevent prospective harm caused by anti-social forces.
We have also been taking steps to ensure that we do not engage in business transactions with anti-social forces
through efforts that involve collecting, amassing, and using information on anti-social forces, liaising withexternal professional organizations, and implementing stringent screening.

Whistleblowing System
Those who have become aware of an act that may be deemed problematic in terms of legal compliance are
generally to report the matter through the usual corporate channels. However, in cases where there may begrounds to believe that such channels may not function appropriately, those with such concerns may seek
support outside the scope of such channels by consulting directly with the CCO or with a consultation service
office (law firm) established externally.
Those seeking consultation are subject to protection under the Whistleblower Protection Act, and shall not betreated unfavorably by the company on the grounds of having sought consultation. Moreover, the CCO is toprovide notification to officers and employees regarding the whistleblowing system twice per year.

61

Anti-Corruption Policy
To prevent bribery and corruption, the o cers and employees of the Asset Management Company are instructed
not to engage in illegal acts including bribery, embezzlement and money-laundering in the Compliance
Manual and persons who commit wrongdoing are subject to strict punishment.

Issues related to fraud and corruption
Serious violations of laws and regulations and fines, surcharges and financial
settlements related to bribery and corruption
There were no serious violations of laws and regulations nor fines, surcharges or financial settlements paid by
NAF or the Asset Management Company in relation to non-compliance, etc. with anti-bribery rules during thisreporting period(*1).

Officers and employees subjected to disciplinary action or dismissal related to bribery
and corruption
No officers or employees of NAF or the Asset Management Company were disciplined or dismissed in relation tobribery or corruption during the reporting period(*1).

Political contributions
No political contributions were made by NAF or the Asset Management Company during the reporting
period(*1).
Accommodations
FundyearInc.to the end of February of the current year
*1 Reporting period: Nippon
From March
1 of the previous
Mitsui
FudosanAccommodations
Management
From April
1 of theprevious year toFund
the endof March ofCo.,theLtd.current year

62

RISK
MANAGEMENTSYSTEMNAF and the Asset Management Company aim to avoid and minimize investment management related risks
concerning NAF’s asset management.
For details, please refer to “Investment Risk, 2) Risk Management Structure for Dealing with Investment Risk
(Excerpts from the Securities Report).”Risk Management
The Asset Management Company draws up risk descriptions, management stances, and monitoring guidelines
regarding respective conceivable risks to be comprehensively addressed under its risk management program.
We have accordingly established the Risk Management Council, which is chaired by the President & CEO, andserves as a body tasked with comprehensively managing risk and setting basic policies for addressing such risk.
At the start of each fiscal year, it formulates basic policy on managing risk and accordingly furnishes approval forthe risk management program.
Individual teams are assigned to manage the respective risks, and general managers of each team form risk
management working groups. Once every three months, the working groups sum up the status of risk
management and report their findings to the Board of Directors.

63

Information Security
The Asset Management Company has drawn up Information Management Rules for the purpose of appropriately
managing information security, and has accordingly established a structure under which the Chief Financial
O cer (CFO) is designated to serve as the Chief Investment O cer (CIO). In addition, we seek to educate andraise awareness regarding information management through compliance training, targeted e-mail attack
exercises, and other such initiatives for o cers and employees.
During the year from April of the previous year to March of the current year, we did not encounter any incidents
involving failure or other such issues with significant implications for NAF’s operations or society.

Business Continuity
The Asset Management Company has drawn up the Crisis Management Manual stipulating emergency measuresand action guidelines for the purpose of enabling a swift and appropriate response in the event of a disaster,
data breach, or other such crisis in terms of minimizing the impact of such incidents on business execution andrestoring normal business operations subsequent to the occurrence. We furthermore strive to ensure safety andsecurity by regularly conducting safety confirmation drills and other such exercises for officers and employees.

64GREENFINANCENAF aims to strengthen the funding base by expanding the group of investors interested in ESG investment andfinancing, along with promoting initiatives for sustainability even further, by procuring funds through Green
Bonds.

Green Finance Framework
NAF has formulated the green finance framework as described below as part of its aim of conducting green
finance.

Use of Proceeds
NAF plans to apply the proceeds from green finance to funds for acquisition of eligible green assets (described in“Eligibility criteria” below) and funds for repayment of existing loans or redemption of investment corporation
bonds that were procured for acquisition of eligible green assets.

Eligibility Criteria
Assets for which any of the following certifications from a third-party certification body (“green building
certification”) has been or will be obtained (“eligible green assets”).
DBJ Green Building Certification: 3 Stars, 4 Stars, or 5 Stars
BELS Certification: 3 Stars, 4 Stars, or 5 Stars
Certification for CASBEE for Real Estate: B+, A, or S Rank
Other green building certification: Rating of an equivalent level to the above
For details of “eligible green assets”, please see “International Initiatives and External Certifications” page.

65

Process for Project Evaluation and Selection
The eligibility criteria are drafted by the Office, which is made up of members from across the Asset Management
Company, and decided at the Investment Committee, the members of which include the President & CEO, theChief Investment Officer (CIO), and the Chief Financial Officer (CFO) of the Asset Management Company.
Green finance projects are selected through examination of eligibility carried out by the Office based on theeligibility criteria followed by deliberation and approval by the Investment Committee.

Management of Proceeds
The amount of debt calculated by multiplying total acquisition price of eligible green assets in NAF’s portfolio by
the ratio of interest-bearing debt to total assets (“amount of eligible green debt”) will be set as the upper limit
amount for green finance and managed so that the balance of green finance does not exceed the amount ofeligible green debt.

Reporting
The following items will be disclosed on the NAF website as at the end of February of each year so long as thebalance of green finance is outstanding.
Total acquisition price of eligible green assets
Ratio of interest-bearing debt to total assets
Amount of eligible green debt
Balance of green finance outstanding

As of February 28, 2023
Total eligible green assets(billion yen)

81.1

LTV

51.5%

Eligible green debt amount(billion yen)

41.7

Green nance (billion yen)

11.0

66

Reporting on status of proceed allocation is as follows.
Green nance (billion yen)

11.0

Green bonds (billion yen)

5.0Green loans (billion yen)

6.0

*For details of green nance, please see Investment Corporation Bonds‧ Borrowings

page.

Outline of Green Bond Issues
Name

Total
AmountInterest Date ofIssue date (Yen in Rate(%)
redemption
millions)

Notes

Target for
funding
allocation

3rd Unsecured Investment
Corporation Bonds(with special pari passu
conditions among
specified investment
corporation bonds)(green bonds)

July 16,
2020

2,000

0.26%

July 16,
2025

Unsecured,
Unguaranteed
R&I: AA-

Park Cube
MeguroTower

4th Unsecured Investment
Corporation Bonds(with special pari passu
conditions among
specified investment
corporation bonds)(green bonds)

July 16,
2020

2,000

0.52%

July 16,2030

Unsecured,
Unguaranteed
R&I: AA-

Park Cube
MeguroTower

5th Unsecured Investment
Corporation Bonds(with special pari passu
conditions among
specified investment
corporation bonds)(green bonds)

September
30, 2021

1,000

0.32%

September
28, 2029

Unsecured,
Unguaranteed
R&I: AA-

Shibaura
Island Air
Tower

67

Outline of Green Loans
Name of financial
inst tution

Issue date of loans

Balance Interest(Yen inmillions) rate

Date of maturity

Target for fundallocation

Nippon Life
Insurance
Company

November 30, 2021

1,000

0.53%

November 28, 2031

Park Axis Toyosu

Mizuho Bank, Ltd.

November 30, 2021

1,000

0.53%

November 28, 2031

Park Axis Toyosu

Nippon Life
Insurance
Company

May 31, 2022

2,000

0.65%

May 31, 2032

Park Axis Toyosu

Nippon Life
Insurance
Company

November 30, 2022

2,000

0.80%

November 30, 2032

Park Axis Toyosu

External review
For eligibility of the green finance framework, NAF has been assigned “Green 1 (F),” the highest evaluation gradein the JCR Green Finance Framework Evaluation by Japan Credit Rating Agency, Ltd. (JCR). For the content andother details of the JCR Green Finance Framework Evaluation, please refer to the following website.
JCR Green Finance Framework Evaluation

SMBC Environmental Assessment Loan
NAF has received an “A” rating for the SMBC Environmental Assessment Loan from Sumitomo Mitsui Banking
Corporation, as it was deemed that NAF is at a high level in terms of “understanding environmental impact,”“environmental business,” and the “status of efforts for environmental conservation measures.”68