E SG Report 2023

CONTENTS
Sustainability Policy/
Sustainability Promotion System

Governance

Message from Senior Management������� 1

Corporate Governance������������� 78

SHR's Sustainability �������������� 3

Compliance������������������� 88

Sustainability Management����������� 4

Risk Management ��������������� 93

Materiality (Important Issues)���������� 7
Stakeholder Engagement������������ 11
Supporting Initiatives/External Evaluations��� 13

Environmental Initiatives
Our Approach to Environmental Considerations,
Environmental Performance ���������� 19
Measures for Addressing Climate Change ��� 24

Sustainability FinanceGreen Finance����������������� 95
Positive Impact Finance ������������ 98

Coexistence of Humankind and Nature,and Initiatives for Environmental Resources �� 39
Investing in Real Estate with Excellent
Environmental Performance ���������� 44
Collaboration with Tenants and Property
Management Companies ������������ 47

Social Responsibility

ESG Library

Initiatives for Residents and Tenants������ 49

ESG Report ������������������ 99

Contributing to Society������������� 60

ESG Data������������������� 100

Respect for Human Rights ����������� 64

External Certification������������� 113

Human Resource Development��������� 66

GRI Standards Content Index��������� 118

Creating Comfortable Workplace Environment � 70

SASB Standards Content Index�������� 124

Occupational Health and Safety �������� 74
Engagement with Investors����������� 76■ Editorial Policy

This document is issued to engage withstakeholders and have readers understand theefforts made by Sekisui House Reit, Inc. (hereinafterreferred to as the “SHR”) and Sekisui House AssetManagement, Ltd. (hereinafter referred to as the“SHAM”) toward realizing a sustainable society.
The GRI Standards (2021) and SASB Standards
were referenced in editing of this document.
■ Reporting Coverage

Sekisui House Reit, Inc. and Sekisui House AssetManagement, Ltd.
■ Reporting Period

Sekisui House Reit Inc.
May 1, 2022 to April 30, 2023 (Some details include
information before and after the relevant period.)
Sekisui House Asset Management, Ltd.
February 1, 2022 to January 31, 2023 (Somedetails include information before and after the
relevant period.)■ Issue Cycle

Published annually as an annual report■ Issue Data

December 2023 (Previous Data: December 2022)■ Contact Information

Sekisui House Asset Management, Ltd.
Investor Relations Department and ESG Promotion
Department
TEL: +81 3-6447-4870 (Main)〈Disclaimer〉
The forward-looking statements in this document,
including earnings forecasts, are based on the
judgment of SHAM in light of the information
available at the time of preparation and are subject
to potential risks, uncertainties and other factors.
Therefore, actual results may differ significantly
from the forecasts due to changes in various factors.

Sustainability Policy / Sustainability Promotion
SystemMessage from Senior
Management

Message from Senior Management
Introduction

We would like to take this opportunity to thank you for your exceptional support of Sekisui House Reit, Inc.

In recent years, all aspects in the business environment surrounding the company have undergone dramaticchanges. In such an environment where uncertainty is increasing, in order for SHR to aim for stable, medium tolong term growth, it is essential that we engage in efforts to realize a sustainable society that will be thefoundation for this growth.

What SHR is Aiming for

SHR has set a vision of “managing assets to better provide for people, society and the future”. This is a

declaration of our determination to continue contributing to the creation of a more prosperous “future” byseeking to enhance the value of our assets under management together with our sponsor Sekisui House, andby providing social capital for a new era for the “people” and the “society”. We believe that addressing social

issues through asset management that takes ESG (Environmental, Social and Governance) into consideration

will contribute to the realization of a sustainable society and enhance the trust of stakeholders, thereby

contributing to securing stable earnings over the medium to long term and maximizing unitholder value.

Recent Initiatives

Based on this idea, SHR has identified materiality (important issues) in 2020, set KPIs (targets), and is actively
pursuing initiatives to resolve the issues. In

targets, aiming to reduce GHG emissions (Scope
fiscal year

, we have changed our existing environmental targets and set new
and Scope ) by

% by fiscal year

, in comparison with. The targets have been certified by SBTi (Note ), which certifies GHG emission reduction targets

based on scientific evidence.

In addition to introducing Sekisui House Owner Denki (Note ) - electric power derived from renewable energy - toour assets, SHR acquires the CASBEE Wellness Office evaluation certification (Note ), which evaluates the

specifications, performance, and efforts of buildings, for the first time. These and other ESG initiatives have beenhighly appraised by external parties. SHR acquired “AA” rating by MSCI ESG Ratings, and been included in both the
MSCI Japan ESG Select Leaders Index and the FTSE Good Index Series (Note ). Going forward, we will continue toreview our materiality (important issues) and targets (KPIs) in response to changes in the environment, society,economy, and other factors, and focus on improving the sustainability of both society and SHR.

1

Toward the Realization of a Sustainable Society

SHR will continue to strive to maximize unitholder value through the provision of high-quality real estate, thatwill become the social capital of a new era. As a REIT that leads the way in the era of the 100-year lifespan, we
aim to continuously meet the expectations of our stakeholders and contribute to the creation of a prosperous
future, while aiming to be a widely loved REIT for a long time to come.

We would like to ask the continued support and encouragement of our stakeholders in the years ahead.
(Note 1) SBTi is an international joint initiative established in 2015 by CDP, the United Nations Global Compact, WRI (theWorld Resources Institute) and WWF (the World Wide Fund for Nature).

(Note 2) "Sekisui House Owner Denki" is a service in which the power supply company purchases surplus electricity fromsolar power generation from owners of houses built by Sekisui House. This surplus electricity is purchased even after
the expiration of the feed-in tariff (FIT) system and used by Sekisui House and others.

(Note 3) Certification for CASBEE Wellness Office is a tool to evaluate the specifications, performance, and efforts of buildingsthat support the maintenance and promotion of the health and comfort for building users.
(Note 4) The FTSE4Good Index Series is developed by FTSE Russell to promote investment in companies that meet global ESG
standards.

Sekisui House Reit, Inc.

Atsuhiro Kida

Executive Director (Right)

Sekisui House Asset Management, Ltd.

Toru Abe

President & Representative Director (Left)2

Sustainability Policy / Sustainability Promotion
System

SHR's Sustainability

Vision of Sekisui House Reit
Managing assets to better provide for people,
society and the future
Maximize unitholder value

Aim to maximize unitholder value by achieving

Provide high-quality social capitalthe enhancement of the overall asset value of thesustainable growth together with stakeholders
Provide high-quality social capital by pursuingcommunity

A REIT that leads the way into an
era of thePromote ESG strategies and become a REIT that-year lifespanleads the way into an era of the 100-year lifespanCorporate Philosophy of Sekisui House Group3

Sustainability Policy / Sustainability Promotion
SystemSustainability Management

Sustainability Policy
As a company, SHR and SHAM have a responsibility to contribute to the resolution of social issues, that arebecoming increasingly diverse and complex day by day, through business activities. We believe that fulfilling

this responsibility not only enhances the sustainability of the society and SHR, but also ultimately maximizes
unitholder value.

SHR has a vision, “managing assets to better provide for people, society and the future” and conducts businessactivities from a medium to long term perspective. Based on the Sustainability Policy established by SHAM, wewill strive to contribute to the realization of a sustainable society and increase corporate value by complying
with and implementing this policy.

1. Enhancement of Governance System
In addition to complying with laws, regulations, and other rules, we ensure appropriate management toprevent conflicts of interest and work to enhance our governance system. We also conduct education / training
and awareness-raising activities for directors, and employees to ensure thorough compliance.

2. Responding to Climate Change
We actively and continuously promote the efficient use of energy and aim to achieve net zero greenhouse gas(GHG) emissions, toward the creation of a decarbonized society.

As part of our response to climate change, SHR will also implement measures to raise the awareness of bothinternal and external stakeholders.

3. Water and Resource Saving Measures
We will actively contribute to the creation of a recycling-based society by promoting measures and publicawareness activities for reducing water use and implementing the three Rs (reduce, reuse and recycle) in
relation to resources.

4. Biodiversity Conservation
In accordance with the Gohon no Ki (“five trees”) Project

promoted by Sekisui House, we aim to realize

harmony with nature and the surrounding environment by conducting maintenance and management ofplanting and other greenery measures, centering on tree species with consideration given to the ecosystemmatters.

4

. Providing Comfort and Safety
We will provide high-quality housing where residents can lead their lives in comfort and safety.

We will also provide convenient, safe, and comfortable spaces that contribute to enhancing the productivity oftenant companies.

. Contributing to Regions and Communities
We will create liveliness in the region and work to coexist with and revitalize the region and community.

. Practicing Human Capital Management in Action
By respecting diversity, personality and individuality, and promoting work-life balance, we aim to create anorganizational culture in which each employee can work in a healthy and lively manner.

We also encourage the autonomy of our employees, and work to improve the value of our human resource
value based on their happiness.

. Cooperating with Stakeholders
In order to promote environmental and social considerations throughout the supply chain, we seek theunderstanding and cooperation of property management companies, other business partners, residents,

tenant companies and facility users.

. Disclosing Information and Acquiring External Certifications
We will proactively disclose ESG-related information to our stakeholders.

We will also continue to acquire environmental certification and assessment from external evaluation
organizations.

5

Sustainability Promotion System
SHAM has established the Sustainability Committee for the purpose of continuous and organizational

implementation of ESG initiatives. With the aim of strengthening the sustainability promotion system, theCommittee is composed of the President & Representative Director as Chief Sustainability Officer, the Director

in charge of ESG promotion Department as Chief Sustainability Operator, all full-time directors, the complianceofficer, and all heads of departments of SHAM. This Committee sets targets and develops the system to promotesustainability. Matters deliberated by the Committee are approved and/or instructed, and various actions aretaken based on them. The progress of initiatives and the status of engagement with stakeholders are reported

regularly to the Committee, and reports are also made to the Board of Directors of SHR as appropriate. The

Committee will meet at least once every three months in principle (held seven times in fiscal year 2022.) With theCommittee at the core, SHAM will work to implement sustainability initiatives across the organization andcontribute to the resolution of social issues.

6Sustainability Policy / Sustainability Promotion
SystemMateriality(Important Issues)

Materiality Identification Process
In 2020, SHR has identified our materiality in accordance with the following process, with the aim of promoting

more concrete initiatives for sustainability through our business activities. Even after the identification ofmateriality, the environment surrounding stakeholders and SHR is ever-changing. By periodically reviewing themateriality in accordance with these trends and pursuing the sustainability of SHR in a manner that meets thedemands of society, we will fulfill our responsibility toward the mutual sustainable growth of both society and

SHR.

7

Materiality
SHR believes that sustainable growth in our business activities is built on a solid foundation of a sustainable
society, and recognizes that in order to continue providing "Prime Properties", which SHR focuses on as aninvestment strategy, it is necessary to carry out initiatives based on the guidelines of solving issues to build asustainable society through business activities. Based on this recognition, SHR has identified eightmaterialities (important issues) and set targets (KPIs) as indicators to resolve each of them. In light of the SDGs
adopted by the United Nations in 2015, we will pursue mutual sustainability of both society and SHR bypromoting efforts to resolve these material issues.

Materiality of SHR
Materiality and Target（KPI）

Related SDGs

Promoting Response to Climate Change

Target(KPI)Reduce GHG emissions
Medium term target (by FY 2030): Reduce 42% of Scope 1
and Scope 2 emissions of portfolio compared to FY 2021
Long term target (by FY 2050): Achieve net zeroCalculate and reduce Scope 3 emissions

Page
linkedReduce 10% energy consumption intensity of portfolio by
FY 2028 (Note) compared to FY 2018
Achieve 25% or more of the portfolio with green leaseagreement by FY 2030

Page
linkedEnvironment

Coexistence of Humankind and Nature and Activities for the Resources
Environment
Advance greenification and respect biodiversity
Target(KPI)

No increasing waste emission intensity of portfolio
compared to FY 2018
No increasing water use intensity of portfolio compared to
FY 2018

Page
linkedPage
linkedInvesting in Real Estate with Excellent Environmental Performance

Target(KPI)

Maintain 70% or more of the portfolio with green
certification
Promote ZEH initiatives
8

Page
linkedMateriality and Target（KPI）

Related SDGs

Providing Residents and Tenants with Secure and Comfortable Space that Offers
Peace of Mind

Periodic surveys on resident and tenant satisfaction andpromote initiatives to improve satisfaction

Target(KPI)

Promote certification acquisition for comfort and health ofbuildings (spaces)
Periodic assessment of earthquake risk and flood damage
risk and the implementation of measures to reduce such
risks

Page
linkedPeriodic assessment of initiatives toward ESG in the supply
chain and the promotion of collaborative initiatives
Contributing to Society
SocialTarget(KPI)

As a member of society, contributing to greater vitality inthe community and countermeasures aimed at preventing
damage from natural and other disasters
By FY 2023, "Sekisui House Matching Program" (a joint
donation system for employees and the company)
participation rate: 45%

PagelinkedCreating a Rewarding Workplace

Target(KPI)

By FY 2023,
Percentage of female managers: 7%
Average monthly work hours per person: 162 hours
Take-up rate for male childcare leave: 100%
Annual paid leave take-up rate: 70%
Number of annual external training courses attended perperson: twice
Annual internal training participation rate: 100%
Practicing Sekisui House Group Human Rights Policy

9PagelinkedPage
linkedMateriality and Target（KPI）

Related SDGs

Strengthening Corporate Governance System
Enhance effectiveness of board of directors of SHR andSHAM
Conducting effectiveness evaluation questionnaire（once/year）

GovernanceTarget(KPI)

PagelinkedPenetration of compliance
Conducting compliance training by external experts, etc.
（four times/year）participation rate: 100％Page
linkedStrengthening internal controls structure
Conducting internal audit（twice/year）

Page
linkedStrengthen risk management system
Conducting risk management meeting（twice/year）

Page
linkedInformation Disclosure and Engagement with Stakeholders

Target(KPI)

Timely and appropriate disclosure of information andenhanced utility of disclosures
Building relationships of trust with stakeholders(Note) In principle, reduction targets are set every 5 years after FY 2028.

10

Page
linkedSustainability Policy / Sustainability Promotion
SystemStakeholder Engagement

SHR conducts its business activities in the context of its ties with stakeholders. In order to continue as aninvestment corporation that contributes to society, it is important to accurately understand the demands andexpectations of its stakeholders and society, and to respond to them through its business activities. For thesereasons, SHR actively discloses ESG-related information in order to gain a better understanding of its initiatives. At
the same time, SHR strives to strengthen engagement by utilizing the demands and expectations gained throughcommunication with stakeholders in its business activities.

Engagement with Stakeholders
Proactive Information Disclosure and Creationof Communication Tools

Related Links
IR Library

Holding Financial Results Briefings and Setting

Engagement with Institutional
Investors

Participation in IR Events and Online Seminars

Investors

Up IR Meetings with Institutional Investors

Monitoring through External Evaluation
Organizations

Initiatives to Reduce Energy Consumption

11

Engagement with Individual

Selection and Evaluation of
Property Management Companies
Initiatives to Reduce Energy
Consumption

Engagement with Stakeholders
Communication through Tenant Satisfaction
SurveysCollaboration Based on Green Lease
Agreements
Improvement in Human Resource Value
Promoting Human Rights Policies
Promoting Diversity

Related Links
Conducting Tenant Satisfaction
Surveys
Promotion of Green Leasing
Support for Acquiring andRetaining Qualifications

Human Rights Reporting System
Promoting Diversity

Contributing to Local Communities
Supporting Initiatives

12

Contributing to Local
Communities

Supporting Initiatives / External
Evaluations

Sustainability Policy / Sustainability Promotion
System

Supporting Initiatives /External Evaluations

SHR and SHAM have expressed their commitment to promote ESG initiatives through the signing or supportingof each initiative. In addition, we will analyze the strengths and weaknesses of SHR and SHAM through theacquisition of sustainability assessments from external organizations, which will lead to further strengtheningof our initiatives.

Signing of the PRI (Principles for Responsible Investment)
Since SHR and SHAM have conducted real estate investment management taking ESG into consideration torealize a sustainable society and believe that such management policies share objectives with the PRI(Principles for Responsible Investment) advocating incorporation of ESG issues into investment analysis anddecision-making processes, SHAM decided to support the basic approaches of the PRI and became a signatory inMarch 2019.

The Six Principles
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 implementationof the Principles within the investment industry.

5. We will work together to enhance oureffectiveness in implementing the Principles.

6. We will each report on our activities and progress
towards implementing the Principles.

13

Overview of the PRI
The PRI is a set of six principles listed above, established for the financial industry in 20

under the leadership ofthe former United Nations Secretary-General, Kofi Annan, together with an international network of investors
working to realize said principles.

Signatories to the PRI pursue improvement of investment performance from the long-term perspective for theirbeneficiaries to further fulfill their fiduciary responsibilities by incorporating ESG issues into investment
analysis and decision-making processes.
For details of the PRI, please click here.

Endorsement of Advance
SHAM is committed to ensuring that all directors and employees fulfill their responsibilities to respect humanrights in accordance with the “Sekisui House Group Human Rights Policy” formulated by Sekisui House.

Believing that the objectives of Advance, an initiative that calls for action on human rights and social issues,
are in line with the “Sekisui House Group Human Rights Policy”, SHAM has signed on as an endorser (Note) in

March 2023.

(Note) Endorsers are PRI signatory institutions that publicly endorse Advance by signing the Advance investor statement.

Overview of Advance
Advance is a stewardship initiative where institutional investors work together to take action on human rights
and social issues. Investors use their collective influence with companies and other decision makers to drive
positive outcomes for workers, communities and the society.
For details on Advance, please click here.

14

Supporting the Recommendations of the TCFD
(Task Force on Climate-related Financial Disclosures)
SHR and SHAM recognize that efforts to tackle environmental issues, such as climate change, are one of the key
issues in real estate investment management that take into account ESG, and SHAM, in July

, has declared

support for the Recommendations of TCFD, and joined the Japan TCFD Consortium, a body of TCFD supporters inJapan. Based on the TCFD's recommendations, SHAM analyzes the risks and opportunities posed by climate change
and promotes actions that are consistent with the TCFD framework.

Recommendations of the Task Force on Climate-related Financial Disclosures

Overview of TCFD
TCFD refers to the Task Force on Climate-related Financial Disclosures, which was established by the Financial

Stability Board at the request of the G2 to consider how to disclose climate-related information and respond tofinancial institutions. TCFD published its final report in June
related risks and opportunities.

to encourage companies to disclose climate-

For details of the TCFD, please click here.

Acquisition of Science Based Targets initiative (SBTi) Validation
SHR has obtained SBTi validation for the GHG emissions reduction target by FY 2030 as being a science-basedtarget from SBTi which is an international joint initiative.

15

Overview of the SBTi Validation
SBT is a Science-based target for reducing GHG emissions that is certified by the SBTi, an international joint

initiative established in ���� by CDP, the United Nations Global Compact, the World Resources Institute (WRI) andthe World Wide Fund for Nature (WWF). SBT is necessary to align GHG emission reduction targets with the levels
required by the Paris Agreement (reduce the increase of global average temperature toeffort to keep it to . ℃ compared to before the Industrial Revolution).

℃ or less and make an

For details of the SBTi, please click here.

Expressed Support for the UN Global Compact
Sekisui House Group, to which SHAM belongs, has clearly stated its commitment to respect human rights in the

Sekisui House Group Corporate Code of Conduct and Corporate Ethics Guidelines, which are the foundations of its
corporate activities. Further, Sekisui House Group has expressed support for the 10 principles of the UN Global
Compact.

Participation in GRESB Assessment
GRESB Assessment of SHR
In theGRESB Real Estate Assessment, SHR has received " Stars" in "GRESB Rating", which is based on

GRESB Overall Score and its quintile position relative to global participants. SHR also has received "Green Star"
designation for the seventh consecutive year by achieving high performance both in "Management

Component" that evaluates policies and organizational structure for ESG promotion, and "Performance
Component" that assesses environmental performance and tenant engagement of owned properties.

Moreover, in the GRESB Public Disclosure (five-level rating from "A" to "E"), which assess the width of ESG

information disclosure, SHR has received the highest "A" rating for the fourth consecutive year in recognition of
our ESG information disclosure efforts.

16

Overview of GRESBGRESB is an annual benchmark to evaluate environmental, social and governance considerations in the global realestate sector, which was established in 2

primarily by major European pension fund groups which led the PRI(Principles for Responsible Investment). The characteristic of the GRESB Assessment is that it evaluates
sustainability efforts by real estate companies, REITs and funds, not of individual properties.
For details of GRESB Assessment, please click here.

MSCI ESG Rating /Inclusion in the MSCI Japan ESG Select Leaders
Index
MSCI ESG Ratings investigate, analyze, and rate the extent to which companies are appropriately managing therisks and opportunities related to ESG and provides a comprehensive corporate ESG rating of seven levels,
ranging from “AAA“ to “CCC”. SHR acquired "AA" in the rating. In addition, SHR has been included in the "MSCI
Japan ESG Select Leaders Index" in 20. The Index is composed of select companies with high ESG performancefrom among the companies in the MSCI Japan IMI Index. The Index is selected as one of the ESG indices forinvestment by Japan’s Government Pension Investment Fund (GPIF).

USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES ON THIS PAGE DOES NOTCONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF "SHR" BY MSCI OR ANY OF
ITS AFFILIATES.

THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMESAND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

Selection as a Constituent of the “FTSE4Good Index Series”
FTSE4Good Index Series is an index series provided by FTSE Russell, a global index provider designed tomeasure the performance of companies that demonstrate strong ESG practices, the constituents are regularly
reviewed based on highly transparent management methods and clearly defined ESG criteria.

SHR was selected as a constituent of the Index Series in recognition of SHR’s ESG efforts upon the 2022 review.

For details of FTSE Good Index Series, please click here.

17

MUFG ESG Rating Certificate for J-REIT supported by JCR
SHR and SHAM have collectively been granted the highest “S” rank among 5 grades in “MUFG ESG Rating
Certificate for J-REIT supported by JCR” by Mitsubishi UFJ Research and Consulting Co., Ltd. (“MURC”).

This Rating, which is conducted by MURC and supported by Japan Credit Rating Agency, Ltd. (“JCR”), intends toevaluate J-REITs’ initiatives and implementations on ESG issues based on its own ESG check items, and assigns
a score.

18

Environmental Initiatives

Our Approach toEnvironmental Considerations,
Environmental Performance

Our Approach to Environmental Considerations
In accordance with the following Sustainability Policy, SHR and SHAM promote initiatives to addressenvironmental issues and work with stakeholders to reduce environmental impact through business activities.

Sustainability Policy (excerpt)

Responding to Climate Change

We actively and continuously promote the efficient use of energy and aim to achieve net zero greenhousegas (GHG) emissions, toward the creation of a decarbonized society.

As part of our response to climate change, SHR will also implement measures to raise the awareness ofboth internal and external stakeholders.

Water and Resource Saving Measures

We will actively contribute to the creation of a recycling-based society by promoting measures and publicawareness activities for reducing water use and implementing the three Rs (reduce, reuse and recycle) in
relation to resources.

Biodiversity Conservation

In accordance with the Gohon no Ki (“five trees”) Project promoted by Sekisui House, we aim to realize

harmony with nature and the surrounding environment by conducting maintenance and management ofplanting and other greenery measures, centering on tree species with consideration given to theecosystem matters.

Click here for the full Sustainability Policy.

19

Environmental Targets
SHR has set the following environmental targets to resolve materiality. While implementing various measuresto achieve the targets and reviewing them as appropriate in consideration of environmental, social, andeconomic changes, we will contribute to the realization of a sustainable society.

(Note) In principle, reduction targets are set every 5 years after FY 2028

Environmental Management System（EMS）
SHAM has established an Environmental Management System (EMS) to address environmental issues specified
in the Sustainability Policy. In this system, based on environmental performance data such as CO₂ emissions,energy consumption, water use, and waste emissions, we set environmental targets (Plan), track achievements(Do), budget management and progress reporting (Check), and plan and implement improvement measures(Act). Furthermore, the Sustainability Committee deliberates and provides reports on the contents of each
item, and we work to continuously strengthen our initiatives.

Environmental Performance Data
SHR has received third-party assurance for environmental performance data since fiscal year 2020, with the
exception of some data, and is committed to managing accurate and transparent data.

Click here for detailed data by asset type, other environment-related data, basis of calculation, etc.

20

GHG Emissions (Scope ,Scope )KPI: Medium term target (by FY)% (total emission basis, compared to FY 2021)

Reduce(t-CO₂)
6,000
5,126

FY 2022 Result
vs. base year

-50.7%

4,000
2,973
2,529

2,000

0
FY 2021(Base year)

FY 2030(Medium term target)

FY 2022

Energy Consumption
KPI: Reduce 10% by FY 2028 (intensity basis, compared to FY 2018)(MWh/㎡)
0.20
0.174

FY 2022 Result
vs. base year

-8.3%

0.179
0.161

0.165

FY 2020

FY 2021

0.16

0.157

FY 2022

FY 2028(Target)

0.15

0.10

0.05

0
FY 2018(Base year)

FY 2019

Waste Emission
KPI: Avoid increasing waste emission intensity of portfolio compared to FY 2018(kg/㎡)
10

FY 2022 Result
vs. base year

-43.2%

8

7.455

6

5.382
4.236

4

3.679

3.477

FY 2020

FY 2021

FY 2022

1.561

1.543

FY 2021

FY 2022

2

0
FY 2018(Base year)

FY 2019

Water UseKPI: Avoid increasing water use intensity of portfolio compared to FY
(㎥/㎡)
2.5

2.0

FY 2022 Result
vs. base year

-

. %

1.743

1.707

1.631

1.5

1.0

0.5

0
FY 2018(Base year)

21

FY 2019

FY 2020

Introduction of Environmentally Friendly Facilities
SHR actively promotes the efficient use of energy, and installs environmentally friendly facilities such as LED
lighting and energy-saving air conditioner in addition to energy-creating facilities through the installation ofsolar panels, etc. in owned properties.

LED Lighting
SHR promotes the changeover to LED lighting in common areas of residences. As of the end of the 18th fiscal

period, changes have been made to a cumulative total of 67 properties, and it is expected that the annual
electricity usage will be reduced bychanges thus far.

. % and the annual CO₂ emissions will be reduced bytons with the

Effect of the Change to LED Lighting （Note1）（Note2）(Note 1) The total covers 67 residential properties that have been switched to LED lighting.

(Note 2) The figures for expected reduction are estimated by SHAM based on materials provided by the replacement
contractor etc. There is no guarantee that the expected reductions will be realized.

In addition, we strive to reduce the environmental burden through the introduction of solar power generation
panels, Low-e double glazed windows with thermal shielding and thermal insulation capabilities, and electricvehicle chargers.

Examples of Facilities Installation
Low-e Double Grazed

Solar Power Generation Panels

Garden City Shinagawa
Gotenyama

Windows

Prime Maison Gotenyama East

22

Hommachi Minami Garden
City

Electric Vehicle Chargers

Prime Maison EGOTANOMORIIntroduction of Renewable Energy-Derived Electricity
SHR promotes the introduction of renewable energy-derived electricity in owned properties by switching thecontracts for power supply to electricity plans that eliminate CO₂ emissions to virtually zero.

SHR has switched the contract for power supply to "Sekisui House Owner Denki （Note） " for "Hirokoji Garden
Avenue", resulting in CO₂ emissions from electricity to be virtually zero.

SHR introduced virtual renewable energy through the purchase of FIT non-fossil fuel energy certificates withtracking at the Non-fossil Fuel Energy Value Trading Market of the Japan Electric Power Exchange via a broker.
(Note) "Sekisui House Owner Denki" is a service in which the power supply company purchases surplus electricity fromsolar power generation from owners of houses built by Sekisui House. This surplus electricity is purchased at a stableprice even after the expiration of the feed-in tariff (FIT) system and sold to Sekisui House and others.

Status of Renewable Energy-Derived Electricity(As of December,)(number of properties basis)

Entire Portfolio. ％Introduced

91.7%

Not Introduced

8.3%

23

Environmental Initiatives

Measures for Addressing
Climate Change

Disclosure Based on TCFD Recommendation
In recent years, the environment, society and corporate activities havebeen exposed to major risks due to climate change such as global

warming. SHR recognizes that resolving environmental issues such as
climate change is one of the key issues for us, which aims to provide"bases for sustainable living" and "sustainable bases of operation forbusiness" through ESG-conscious real estate investment management.
Based on the TCFD recommendations, SHAM identified and disclosed the risks and the opportunities posed by climate change
to the business in 2

, and further analyzed and conducted a scenario analysis in, using future climate projections

published by international organizations and other sources as the main source of information. In, in addition to analyzing

the financial impact of the identified risks and opportunities, SHAM conducted an analysis using CRREM (Carbon Risk Real
Estate Monitor). We will continue to enhance our resilience by enhancing information disclosure and by appropriately

identifying and responding to transition and physical risks related to climate change through our initiatives in accordance with
the TCFD recommendations, while simultaneously working strategically to create business opportunities.

Governance

SHAM has established a Sustainability Committee as the decision-making body for sustainability issues. It meets at least

once every three months to define policies, targets, and various measures related to sustainability and to discuss climatechange risks (transition risks and physical risks) and material issues in relation to mitigation of and adaptation to climatechange.

In 2020, in addition to defining the basic approach and organizational structure for addressing climate change-related issues,
the Chief Sustainability Operator was appointed as the Director in charge of climate change, with the President &Representative Director as the Chief Sustainability Officer, in order to strengthen the promotion of climate change initiatives

and clarify its responsibilities. These activities aimed at mitigating and adapting to climate change are reported as appropriate
to the President & Representative Director, the Board of Directors of SHAM, and the Board of Directors of SHR.

In 2021, the Sustainability Committee expanded its membership to include the heads of all departments in an effort to raiseawareness of sustainability and strengthen the organizational structure for promoting awareness. And in, the “ESG

Promotion Department” was established as a department dedicated to overseeing and managing ESG-related operations tostrengthen the promotion system.

Click here for Sustainability Promotion System.

24

Strategy
Based on the recognition that climate change is an important issue that will have a significant impact on

business activities, SHAM has set “Promoting Our Response to Climate Change” as a materiality of SHR, andviews the various risks and opportunities associated with climate change as one of the key points in its
business strategy.

Scenario Analysis
In order to assume various possible future events that could be caused by climate change and to understandthe risks and opportunities for the business activities of SHR and assess the financial impact, SHAM usedscenarios from international organizations and industry groups such as the IPCC (Intergovernmental Panel on

Climate Change) and the IEA (International Energy Agency) to conduct an analysis for a world in which temperatures
have increased by �℃ and �.�℃, respectively. Scenario analysis is conducted using the following process.

The Process for Conducting a Scenario Analysis

25

Risks and Opportunities Related to Climate Change
Risks related to climate change include risks associated with the transition to a decarbonized society("transition risk"), such as tightening of regulations such as carbon tax, falling demand for companies thatcannot respond to decarbonization, and a decline in reputation, and risks associated with the physical damage("physical risk") caused by an increase in natural disasters and extreme weather events due to climate change.
At the same time, we can also make assumptions regarding opportunities created by climate change.
Category
Policy, and laws andIntroduction of carbon taxes and emissions trading scheme

Technology

Innovation and further adoption of renewable energy and energy-saving
technologies

MarketChanges in tenant requirements for the environmental performance ofbuildings

Reputation

Changes in evaluation and social values of climate change response

AcuteIntensification of natural disasters such as typhoons, torrential rains, andstorm surges

Regulations

Transition
risks

Physical risks

Opportunities

Changes in the World due to Climate Change

Chronic

Tighter energy regulations

Rise in sea level

Changes in cooling equipment demand due to rising temperatures

Increase in non-life insurance premiums due to frequent natural disasters

Technology

Innovation of renewable energy and energy-saving technology

MarketChanges in tenant requirements for the environmental performance ofbuildings

26

A Worldview with Stakeholders in Mind by Scenarios

�℃ Scenario

The �℃ scenario is a future view that assumes no strict regulations or tax reform aimed at decarbonizing

society will be enacted and that greenhouse gas (GHG) emissions will continue to rise. This is a scenario in
which the physical risk is relatively high and the transition risk is relatively low.

27

. ℃ Scenario

The . ℃ scenario is a future view that assumes regulations and tax policies aimed at decarbonizing society
will be enacted. This scenario is characterized by relatively low physical risk and relatively high transition
risk.

28

Assessment of Financial Impact
Under the following assumptions, we set parameters to evaluate the financial impact of risks and opportunities faced
by SHR, and calculate the impact by taking into account differences in parameters under each scenario. Furthermore,climate change risks are highly uncertain with respect to the timing and the scale of the risks that materialize, and it

is extremely difficult to predict their financial impact. The current analysis places certain assumptions on the subjectof the analysis, socioeconomic changes, and anticipated natural disasters, and does not take into account theprobability that the identified risks/opportunities will be realized. Therefore, analysis methods will continue to bereviewed in the future in light of changes in the external environment.
Subject of Analysis
Anticipated
Periods

General business in real estate investment management and funding
Short term

Category
Referenced
Scenarios: From present until

Medium term : Until
Long term: UntilTransition risks

Physical risks

�℃ scenario: IEA World Energy Outlook ����STEPS
. ℃ scenario : NZE

29℃ scenario : IPCC RCP .
. ℃ scenario : IPCC RCP .

�℃ Scenario
Risk and opportunity
factors,

Classificationand financial impact

Periodanticipated

Amount of financial

Countermeasures

implications (Note)

Appropriate
Reduced rents due toinability to operatebusinesses due to flooding
damage caused bytyphoons, torrential rains,
Acute

etc.

response
based onMediumand long
term(0.6) billion yen

monitoringof flooding
risk

Implement
measuresuch asstocking

emergency
power
Increase repair costs due toflooding damage

supplies andinstall tide

Mediumand long
term(0.3) billion yen

and watergate barriers
Take out
insurance

Physical risks

Monitorusage
associatedwith weather
andtemperaturechangeChronic

Increase electricity costs
due to increased air
conditioning operation as aresult of chronically risingtemperatures

Medium tolong term

( .

to .

) billion yen

Optimize
HVAC
operation
throughhighefficiency

airconditioning
equipment
and building
automation

Identify

high-risk
properties

byquantitively
identifying
physicalrisks anddispose ofsuchproperties
as needed

Incorporate
quantitative
physicalrisk
information
into preacquisition
propertyevaluations

systems(BAS), etc.

Thoroughinspection of
HVAC
equipment

fordeterioration
due toincreased
operation

Opportunities

Technology

Reduction in electricity
charges by improving theenvironmental performanceof owned properties

Mediumand long
term

30

0.15 billion yen

Collect information on newtechnologies and services
and add to portfolio

Convert owned properties to
ZEHs/ZEBs

�.�℃ Scenario
Classification

Risk and opportunity
factors,
and financial impact

Due to the introduction of

Policies,

laws andregulations

carbon tax, tax burdens
corresponding to GHG
emissions will increase
operating costs

regulations are tightened

Transition Risks

Reputation

MarketAmount of financial
implications (Note)

Countermeasures
Set reduction targets for GHG

Mediumand long
termemissions and disclose
progress against targets(0. ) billion yen

Renovate properties for
improved energy-saving
performance

Procure renewable energy
Reallocate portfolio to

Increase in property
renovation costs as energy

Technology

Periodanticipated

Increase in the cost of
introducing renewableenergy and energy-saving
technologies

Rising financing costs due toperceived inadequacy of
response to climate change

Decreased competitivenessand rent income due to poor
environmental performanceof owned properties

Mediumand long
term

Mediumand long
term

Short,
mediumand long
term

Medium tolong term(0.7) billion yen

increase investment ratio inproperties with outstanding

environmental performance
Acquire ZEH and ZEB
properties

Collect information on new(0.1) billion yen(0.05) billion yen

technologies and services
and add to portfolio

Convert owned properties to
ZEHs/ZEBs
Improve investor valuations
by strengthening information
disclosure using frameworks
such as TCFD
Promote green financing(1.45 to 1.6) billion yen

Identify needs throughtenant satisfaction surveys,
etc., and conduct energysaving renovations
Acquire ZEH and ZEB
properties

Acquire green certifications

31

Risk and opportunity
factors,

Classificationand financial impact

Periodanticipated

Amount of financial

Countermeasures

implications (Note)

Appropriate
Reduced rents due toinability to operatebusinesses due to flooding
damage caused bytyphoons, torrential rains,
Acute

etc.

Increase repair costs due toflooding damage

response
based onMediumand long
term(0. ) billion yen

monitoringof flooding
risk

Implement
measuresuch asstocking
emergency
power
Mediumand long
term

supplies andinstall tide(0.1) billion yen

and watergate barriers
Take out
insurance

Physical risks

Monitorusage
associatedwith weather
andtemperaturechangeOptimize

HVAC
operation
Increase electricity costs
Chronic

due to increased air
conditioning operation as aresult of chronically risingtemperatures

through
highMedium andlong term(0.01) billion yen

efficiency
airconditioning
equipment
and building
automation
systems(BAS), etc.

Thoroughinspection of
HVAC
equipment
fordeterioration
due toincreased
operation

32

Identify
high-risk
properties

byquantitively
identifying
physicalrisks anddispose ofsuchproperties
as needed

Incorporate
quantitative
physicalrisk
information

into preacquisition
propertyevaluations

Classification

Technology

Opportunities

MarketRisk and opportunity
factors,
and financial impact

Reduction in electricity
charges by improving theenvironmental performanceof owned properties

Rise in occupancy rates andrents of owned properties
with outstanding

environmental performance

PeriodanticipatedMedium tolong term

Amount of financial
implications (Note)

0.2 to . billion yen

Countermeasures
Collect information on newtechnologies and services
and add to portfolio

Convert owned properties to
ZEHs/ZEBs

Identify needs throughtenant satisfaction surveys,
Medium tolong term

1.45 to 1.6 billion yen

etc., and conduct energysaving renovations

Acquire ZEH and ZEB
properties

Acquire green certifications(Note) The amount of financial implications is the annual implications estimated by SHAM based on the actual performance of SHR and other factors,
and with reference to various parameters based on scenarios presented by international organizations, etc. The accuracy of the figures is notguaranteed.

33

Analysis Results
Under the ℃ scenario, no strict regulations or tax reform aimed at shifting to a decarbonized society areenacted, causing GHG emissions to continue rising. Physical risks due to changes in weather patterns such as

intensifying weather disasters and chronic temperature increases are unavoidable. As a result, rent for owned
properties are expected to decrease, while repair costs and electricity charges increase. SHAM is aware of therisk that flooding damage to its properties due to typhoons and heavy torrential rain, etc., could affectearnings. SHR owns

properties in Japan (as of March), of which

properties are recognized as beingat risk of flooding damage due to river flooding, etc., based on hazard maps and other survey data. Properties
that are expected to suffer large amounts of damage are covered by insurance for more than the estimatedamount. In such cases, there is also a risk that continuation of business operations will become impossible due
to flooding damage, and rent income will decline. We are therefore seeking to reduce risks by taking out

insurance to compensate for lost profits (indirect damage), the financial impact of which is calculated to bearoundmillion yen. While these damages are calculated based on the assumption that similar damage

occurs simultaneously in all areas where owned properties are located, we believe that the risk of such damage
occurring simultaneously is low due to the dispersed location of properties owned by SHR.

Under the . ℃ scenario, we expect to be affected by transition risks, such as tightening of regulations aimed at
curbing GHG emissions toward the realization of a decarbonized society, and changes in property selection

preferences due to increased environmental awareness among tenants. To respond to these risks, SHR calculates

the impact of the introduction of a carbon tax on operating costs. In fiscal year

, GHG emissions decreased

significantly due to the introduction of renewable energy, etc., resulting in a smaller impact of

million yen,which is lower than in the previous year’s analysis results. SHR is also working to reduce GHG emissions in its

portfolio and obtain green certification for its properties. We have calculated the impact of the response to theserestrictions at aroundmillion yen, in anticipation of further tightening of environmental regulations such asenergy-saving standards. With regard to the impact of changes in preference of properties by tenants, we havecalculated that the impact on rent income if the acquisition of these properties does not proceed will be a decreaseof up to . billion yen, while the effect on rent income if the acquisition proceeds will be an increase of up to .

billion yen, assuming that the demand for properties with high environmental performance - such as ZEH - will

increase.

In anticipation of the intensification of weather disasters indicated by the ℃ scenario, SHR invests mainly inproperties that are resistant to risks such as flooding in terms of location and specifications, and with highenvironmental performance. Additionally, in order to respond to transition risks and maintain a competitive

advantage in anticipation of the transition to a low-carbon society indicated by the . ℃ scenario, we will work

actively to address individual risks, by working to further reduce GHG emissions in our portfolio, acquire green

certification, and actively investing in ZEH properties developed by Sekisui House. In this way, SHR is engagedin active efforts to respond to individual risks. As a result of these efforts, we believe that the impact of theserisks on our business will be limited, and that these initiatives will lead to business opportunities for value
creation.

As part of our further responses, since fiscal year

, we have also been conducting transition risk assessment

analysis using CRREM (Carbon Risk Real Estate Monitor). Going forward, SHR will continue to strategically address
climate change, and work to reduce climate change risks and maximize opportunities.

34

Analysis According to CRREM
Overview of CRREM
CRREM (Carbon Risk Real Estate Monitor) calculates and publishes GHG emissions

pathways (carbon reduction pathways) up to ���� consistent with the ℃ and . ℃targets of the Paris Agreement for each use of real estate in a total ofof November

countries (as) in Europe, North America and the Asia-Pacific region including

Japan. This tool is expected to be utilized for operational improvement bycomparing the property data analyzed and pathways to calculate the timing ofassets becoming stranded (Note) and carbon costs for each property, and to grasp thescale of renovation required to address these issues.

（Note） Stranded assets are assets that turn out to be worth less than expected as a result ofchanges (such as demands and market prices) associated with the transition to a lowcarbon economy.

35

Analysis Results

SHAM analyzed the potential stranded asset risk of the portfolio (the portfolio excluding properties held as ofMarch ���� that have been sold or decided to be sold within one year) using CRREM's risk assessment tool, as
follows. The analysis is based on the Asia Pacific version of the tool (ver. .

), with some parameters (e.g., GHG

emission factors for grid electricity) adjusted. The graph below shows a comparison of the performance of theportfolio and Global Pathways v .

( . ℃ target).

CRREM Pathway Transition

The performance across the entire portfolio is calculated based on theassumption that the current performance will continue based on the resultsof fiscal year 2021.
Since there was no data on energy consumption in the residential areas ofthe properties at the time of the analysis, the average energy consumptionof residential areas was set as an alternative value, based on the Tokyo
Metropolitan Government’s survey on energy consumption trends in theresidential sector.
In analysis results for the office portfolio conducted in(Global Pathway v .

, with respect to the old �.�℃ pathway), analysis results were below the old �.�℃ pathway until the first half ofin thecase where performance continued at the current level. This time, residential properties were also includedin the analysis. In an analysis of the entire portfolio, with respect to the new �.�℃ pathway(Global Pathways v .
mid-) results showed that the new pathway would be exceeded much sooner, in thes. The performance across the entire portfolio is calculated based on the results of fiscal year

, but if the performance results of fiscal year

are maintained in the future, we can see that thetiming of exceeding the new �.�℃ pathway can be postponed until. Since we also plan to implement

measures to reduce GHG emissions, we believe that the timing of exceeding the new �.�℃ pathway can
actually be delayed further beyond.

36

Risk Management
SHAM has established an integrated risk management system for the purpose of accurately identifying various
risks inherent in the execution of our operations, managing such risks appropriately, preventing risks frommaterializing, and minimizing losses when risks occur. In order to properly carry out organizational risk

management, the Chief Manager of the Internal Control Promotion Department takes care of risk management

as the chief supervisor, the head of each department is its own department’s responsible for each risk

management, and the Internal Control Promotion Department is in charge of promoting risk management.

Every business year, the Internal Control Promotion Department formulates a risk management plan for thefollowing fiscal year, consisting of annual policies, priority management risks, and receives approval from theBoard of Directors. The Internal Control Promotion Department also holds risk management meetings every six
months, monitors the progress of the risk management plan, including climate-related risks, and reports thedetails to the Board of Directors. Under such risk management system, with respect to climate change, theSustainability Committee of SHAM continuously identifies and assesses climate change risks and opportunities that
may affect SHR’s operations, and updates its measures as deemed necessary by the President & Representative
Director, who is also the Chief Executive Director of the Sustainability Committee. We clarify the methods for

managing climate change risks and opportunities, and as part of our integrated risk management process, promotemanagement of climate change risks/opportunities and initiatives related to resilience.

Click here for Risk Management System.

37

Indicators and Targets
SHR recognizes that solving environmental challenges, such as climate change, is one of the key issues for thesustainable growth of our business. We have identified “Promoting response to climate change” and “Investingin real estate with excellent environmental performance” as materialities and have established the following
metrics and targets for use in identifying, evaluating, and managing climate change risks and opportunities.
SHR has obtained SBTi Validation for the medium term GHG emissions reduction target.
For details of the SBTi Validation, please click here.

■ GHG Emissions Reduction Target

Medium term target (by FY 2030): Reduce 42% of Scope

FYLong term target (by FY

Calculate and reduce Scopeand Scope): Achieve net zero
emissions■ Energy Consumption Reduction Target
Reduce% energy consumption intensity of portfolio by FY

In principle, reduction targets are set every

years after FY■ Portfolio Green Certification Target
Maintainemissions of portfolio compared to% or more of the portfolio with green certification

Click here for indicators.

38.

compared to FY

Environmental Initiatives

Coexistence of
Humankind and Nature,and Initiatives forEnvironmental Resources
Biodiversity Conservation
The Gohon no Ki (“five trees”) ProjectIn accordance with the Gohon no Ki (“five trees”)

Project

promoted by the sponsor, Sekisui House,

SHR carries out maintenance and management ofplanting, etc. based on tree species that take theecosystem into consideration.

The Gohon no Ki Project is based on the approach that“three trees are for birds, two trees are for butterflies,

and all are local native tree species.” The project
proposes the use of native tree species that are

beneficial to birds and butterflies in gardens. In

addition to biodiversity conservation, we are making

proposals that encompass the benefits to residents ofgarden visits by fauna and the other effects of garden
trees. We seek to maintain and revive the ecosystem

network (nature positive) by increasing the amount ofrichly green space in urban areas and by leveraging
residential gardens, created under the Gohon no Ki

Project, to support the habitat and activities of thefauna. Ecosystem networks enrich biodiversity at theregional and national levels, creating places where

both wildlife and residents can simultaneously enjoy therichness of nature. In fiscal year 2022, Sekisui House
plantedthousand trees and the cumulative number

reached. million.

of planted trees since the start of the project has

39

Examples of implementation
We are considering the biodiversity conservation, and are implementing tree planting and replanting programsfor some residences. When replanting, in collaboration with Sekisui House, we planted trees in accordance with
the Gohon no Ki (“five trees”) Project after confirming the details of the replanting, such as the selection ofnative tree species and whether there are non-native species that fall under the non-native species that requirecomprehensive measures. And the tree plates installed have QR codes on them, allowing visitors to checkdetailed information about the tree species.

Esty Maison Kayaba (Example of replanting)Tree Plate

As for our office buildings, Garden City Shinagawa Gotenyama and Hommachi Garden City have rooftop

gardens. The greening of rooftops improves insulation performance and contributes to the creation of naturalenvironments in urban areas.

Garden City Shinagawa Gotenyama

Hommachi Garden City

Prevention of Pollution Risks
Upon acquiring the properties, SHAM establishes investigation items such as the use history, use status andstorage status of asbestos, PCBs, and other hazardous substances, geological status, land use history, and soil
contamination status in the due diligence standards, sufficiently conducts investigations to examine theappropriateness of the investment targets. While investment opportunities are limited, we conduct surveys ofproperties developed on brownfield and greenfield sites in accordance with the same criteria, and will not invest inproperties developed on such sites if there is a risk of significant impact on the natural environment. Even after theacquisition of properties, we maintain legal compliance by investigating whether there are any violations ofenvironmental laws and regulations in owned properties through continuous acquisition of engineering reports andother means.

40Installation of Water-Saving Equipment
In residences, we have installed flow control valves to prevent excessive water flow and shower heads, toilets,
etc. equipped with water-saving functions. In office buildings, we are promoting water conservation and theeffective use of water resources by using stored rainwater for sprinkling water in Garden City Shinagawa
Gotenyama and Honmachi Garden City, and for toilet flushing water in Akasaka Garden City.

Flow Control Valve and Water-Saving

Water-Saving Shower

Kitchen Faucet

Appropriate Waste Management
In residences, SHR recycles building materials discharged during restoration
work. And in office buildings, in recognition of our excellent performance inpromoting the reduction and proper disposal of commercial waste, the Osaka

City Environment Bureau certified Honmachi Garden City as an excellent building
for waste reduction and awarded HK Yodoyabashi Garden Avenue a “Mark of
Excellence for Waste Reduction”.

Furthermore, in order to further reduce waste emissions, we have posted

awareness-raising posters for the three Rs (Reduce, Reuse, Recycle) aimed at

reducing waste emissions. We will continue to strive for proper waste
management through the operation of owned properties.

HK Yodoyabashi Garden
AvenueMarks of Excellence for Waste

Urban Revitalization / Urban Redevelopment

Reduction

Leveraging our decades of expertise in housing construction, Sekisui House is implementing urban

redevelopment that goes beyond mere scrap-and-build. Through the urban redevelopment of rental and for-sale condominiums, offices, hotels, commercial facilities, and complexes incorporating these property types,
Sekisui House aims to realize buildings that are accommodating to all and will be passed on to subsequent

generations, thereby creating value for society as a whole with focus on people, communities and the future.

When planning urban redevelopment projects, Sekisui House always considers the impact of their operations
on the environment and community, referencing relevant laws, regulations and internal rules. SHR, in

cooperation with Sekisui House, aims to provide high-quality social capital and to create a sustainable city
through the acquisition of environmentally friendly properties developed by Sekisui House.
41

“Gotenyama Project”, a Large-Scale Complex Development by Sekisui House“Prime Maison Gotenyama East”, “Prime Maison Gotenyama West”, “Garden City Shinagawa Gotenyama”, and“Gotenyama SH Building” owned by SHR are properties planned and developed under Sekisui House’s large-

scale complex development “Gotenyama Project”. It is not just a large-scale development that advocates only asense of scale, but is based on the revitalization of the original landscape of "Gotenyama", which is rich innature, and creating an expressive and intimate human-scale townscape. In addition, the project focuses onenvironmental considerations and actively uses natural energy and adopts advanced energy-saving
technologies.

In the “Gotenyama Project”, more than 40% of the total development area is greened through exterior planting androoftop greening. Based on Sekisui House’s proprietary Gohon no Ki Project, which takes into account theecosystem of Japan’s original “Satoyama” landscape, a green network that is integrated with the greenery in thesurrounding area is created through preservation of existing trees and planting over 26. thousand trees, mainly
indigenous species.

＜“Gotenyama Project” Overview＞
Location

Site area

Overviewof thebuildings

6-7-

Kitashinagawa,Shinagawa-ku, Tokyo
Approx.

,four sites）㎡（Total of

For details of each

property, please refer tothe following.

Prime Maison Gotenyama
East
Prime Maison Gotenyama
West
Garden City Shinagawa
Gotenyama
Gotenyama SH Building＜Major Awards Granted to the Project＞
February

Sponsored by Shinagawa Ward, Tokyo

Greening Grand Prize at the Green Honoring
SystemSeptemberSponsored by Organization for Landscapeand Urban Green Infrastructure

Minister of Land, Infrastructure, Transport

and Tourism Award in the Rooftop Greening
Category at the “Rooftop / Wall / Special
Greening Technology Contest”
OctoberSponsored by Organization for Landscapeand Urban Green Infrastructure

Urban Greenery Organization Chairman’s

Award in the Green Community Development
Category at the Urban Green City Award42

“EGOTANOMORI Project”, a large-Scale Town Development“Prime Maison EGOTANOMORI ” owned by SHR is a property planned and developed by Sekisui House throughthe “ EGOTANOMORI Project”, a large-scale urban development project carried out on land owned by the Urban

Renaissance Agency. The property consists of five different buildings: Prime Maison EGOTANOMORI EAST/WEST(rental condominiums for families), MAST ONE EGOTANOMORI (a rental condominium for students and single-

persons), GRAND MAST EGOTANOMORI (serviced housing for the elderly), and NICHII HOME Egotanomori (a paid
nursing home with long term care).

The area where this property is located is blessed with a rich natural environment and has been designated as awide-area evacuation site in the Tokyo Metropolis. In the Nakano City urban planning master plan, the area isconsidered to have sufficient evacuation routes and an environment that is harmonious with the abundant

greenery in the surrounding area, and is positioned to promote the supply of good housing complexes, etc. In
addition, the community was developed under the concept of creating a sustainable community nurtured bymultiple generations in order to take advantage of the many schools, medical facilities, and facilities for theelderly in the area. We aim to develop a community that regenerates as an area where diverse generations live

together, including students, young family households starting to raise children, and elderly people who want asafe and comfortable life.

＜“ EGOTANOMORI Project” Overview＞
Location

Site area
Overviewof thebuildings- - ~ Egota, Nakano-ku,
TokyoApprox.

,㎡

For details of the property,
please refer to thefollowing.

Prime Maison
EGOTANOMORI＜Major Awards Granted to the Project＞
May

Urban Landscape Award sponsored by the“Urban Landscape Day” Executive CommitteeAwarded the "Urban Landscape Day"

Executive Committee Chairman's Award in
the Urban Space category
OctoberGreen City Award sponsored by theOrganization for Landscape and Urban GreenInfrastructureAwarded the Minister of Land, Infrastructure,
Transport and Tourism Award in the Green
Business Activities category

The land for this project was provided by the Urban Renaissance Agency

as a site for rental condominiums and other facilities, taking advantage ofthe "rich natural environment" and developing roads and parks with theaim of “ensuring disaster prevention functions”, “creating a community
with excellent health and medical care”, and “creating a community

where a variety of households, mainly families, can continue to live”.

43Environmental Initiatives

Investing in Real Estate with
Excellent
Environmental Performance

Approach to the Acquisition of Green Certifications
SHR invests and manages real estate with excellent environmental performance, and is actively acquiring green
certification to evaluate the environmental performance of its properties. Through these certifications, SHR
objectively assesses the environmental performance and refers to such assessment for improvement.
In addition, SHR has set a target (KPI) for the percentage of green certifications obtained.

Green Certification
KPI: Percentage of portfolio with green certification

Maintain% or more

Percentage of certified assets(as of December

,

)

82.8%

(total floor area basis)(Note 1) In case the property contains multiple uses and only a specific use is certified, the percentage of portfolio with green
certification is calculated based on the total floor area of the entire property, in principle.

(Note 2) The property acquired multiple certifications is calculated as one property.

44

Status of Acquisition of Green Certifications(as of December 21,

DBJ Green Building Certification

6
properties

Certification for CASBEE for Real
Estate30
properties

S rank9
properties★★★★★

1 property

★★★★

20
properties★★★

34
properties

A Rank20
properties★★

1 property

B+ Rank

1 property)

Click here for details of property names for each rank.

Overview of Green Certifications
DBJ Green Building Certification
DBJ Green Building Certification Program was launched by Development Bank of Japan Inc. (“DBJ”) in April

2011, for the purpose of supporting the properties which give proper care to the environment and the society(“Green Building”).

The certification is based on a comprehensive evaluation of the property's environmental performance as well
as how it responds to the needs of various stakeholders, including disaster prevention and community
considerations, and is awarded on a five-star scale from 1 Star to 5 Stars.

Since August 2017, Japan Real Estate Institute (“JREI”) evaluates and certifies properties and DBJ is in charge ofthe entire system of the DBJ Green Building Certification Program.

For details of the “DBJ Green Building Certification System”, please click here.

45

Certification for CASBEE for Real Estate
CASBEE (Comprehensive Assessment System for Built Environment Efficiency) is a system thatcomprehensively assesses the quality of a building, evaluating features such as interior comfort andconsideration for the surrounding scenery, as well as its environmental friendliness such as its use of materials

and equipment that save energy or achieve low environmental impact. CASBEE for Real Estate Certification wasdeveloped with the aim of making use of the results of the environmental assessment of buildings in real estateevaluation. It scores buildings under each of the evaluation items in five categories, comprising . Energy &Greenhouse Gases, . Water, . Use of Resources & Safety, . Biodiversity & Sustainable Site, and . Indoor

Environment. Based on the scores, the evaluation results are given one of four ranks: Rank S, Rank A, Rank B+,
and Rank B.

For details of Certification for CASBEE for Real Estate, please click here.

Sponsor Initiatives
Sekisui House’s ZEH and ZEB Initiatives
Sekisui House is working to promote ZEH not only in detached houses, but also in rental housing,condominiums, and all multi-unit housing complexes.

The rental housing brand "Sha Maison" is promoting the increased adoption of "Sha Maison ZEH", which is theZEH of this brand. There are two types of ZEH: ZEH-M (ZEH Mansion), which aims for net zero energy

consumption for the entire building, including common areas, and ZEH, which aims for net zero energy

consumption in individual housing units. By primarily promoting ZEH for individual housing units whereresidents can enjoy benefits such as increased comfort, reduced utility costs, etc. Sekisui House is working toincrease the adoption of rental housing that also meets ZEH-M standards. In addition, for the “Grande Maison”
condominiums, Sekisui House is promoting ZEH in each residential unit, and plans to increase ZEH tofiscal year

onward.

% fromFurthermore, Sekisui House is also promoting ZEB in non-residential construction, leveraging ZEH design

expertise and technologies developed in the housing business to achieve ZEB based on high thermal insulation
performance. SHR will contribute to decarbonization by actively investing in ZEH/ZEB properties developed by

Sekisui House.

46

Environmental Initiatives

Collaboration with
Tenants and Property
Management Companies

Selection and Evaluation of Property Management Companies
In order to secure stable earnings and maintain and improve the value of assets, SHR has established criteria

for selecting property management companies to which such management may be entrusted. In principle, SHR
monitors and evaluates the performance of property management companies' management operations once a
year through external evaluation organizations, and verifies their appropriateness.

In addition to the company's property management capabilities and operational systems, its organizational

structure for promoting corporate sustainability and the energy conservation promotion system for managed
properties are also subject to evaluation. For property management companies that receive low ratings onsustainability-related items as a result of the monitoring, SHR interviews them to share details of SHR's
approach to sustainability and supports them in promoting initiatives as one.

Initiatives to Reduce Energy Consumption
SHR asks property management companies to make suggestions for energy conservation in the managed

properties. For office buildings, we also share the results of the CO₂ emissions reduction potential diagnoses
conducted by SHR with property management companies to work together for the purpose of reducing
environmental impact.

At Akasaka Garden City, tenant companies are regularly convened to hold the CO₂ reduction promotion

meeting. At the meeting, energy consumption and CO₂ emissions are reported to each tenant, and explanations
on energy conservation are provided in conjunction with these reports to raise environmental awareness.

Materials of the CO₂ Reduction Promotion Meeting (excerpt)

47Promotion of Green Leasing
Green leasing refers to the establishment and implementation of environmental provisions in lease agreementswith tenants of owned properties. SHR promotes the conclusion of green lease agreements with tenants, andaccelerates environmental efforts by establishing a system for mutual cooperation to share ideas on

maintaining and improving the comfort and productivity of owned properties with the tenants from theperspective of energy conservation and environmental consideration. SHR has set a target (KPI) for thepercentage of introduction of green lease agreements, and the result are as follows.

Green Lease Agreement
KPI: Achieve% or more of the portfolio with green lease agreement by FY

Result as of October,. %(Note) The percentage of portfolio with green lease agreement is calculated as the ratio of the area under green
lease agreements to the leasable area.

48

Social Responsibility

Initiatives for Residents
and TenantsRole of SHR with Respect to Residents and Tenants
In recent years, the significance of SHR’s efforts to provide resilient buildings that can withstand disasters, etc.,
and to minimize damage in the event of a crisis has become greater. We believe that our role is to make theproperties owned by SHR a place that provides safety and peace of mind, and to make it a comfortable placethat improves the quality of life on a daily basis.

SHR seeks properties that are located in suitable locations to provide a “sustainable base for living” forresidents and a “sustainable base for business operation” for tenant companies. Based on the recognition thatthe need for real estates that have high residential functionalities including comfort and safety or thecomponents desired by tenant companies is increasing, SHR designates “high quality” residential andcommercial properties, etc. located at “strategic locations” as “Prime Properties” and prioritizes investments insuch properties.

Through investments in properties that qualify as “Prime Properties”, SHR will pursue both sustainable

lifestyles and business activities for its residents and tenants, and the sustainable asset management of SHR.

Six Factors of Prime Property

49

Focus Points for Residences
Element

Focus Points

Economic Zones

Areas where stable rental demand can be expected in terms of commuting
distance, residential population, number of passengers who use nearby stations,

Convenience

Livability

Environmental Consideration

Safety

Brand

etc.

Good access to major transport routes and major terminals, and adjacent tocommercial stores, etc.
Designed to be comfortable as a living space and installed with functional
equipment

Installation of comfortable common spaces and functional equipment, andprovision of services

Environmental performance is ensured by energy-saving equipment, etc. incommon areas and exclusive areas
Biodiversity-friendly planting and landscape design

Buildings with risk management considerations for disasters

Location with high safety, earthquake resistance of buildings, and disaster
resilience
Popularity as an area and recognition of properties

High quality in terms of building grade, design, etc.

Focus Points on Office Building
Element

Economic Zones

Convenience

Functionality
Environmental Consideration
BCP
Brand

Focus Points
Population of the commercial area, residential population, number of passengers
who use nearby stations, and thickness as an economic zone
Good access from major transport routes

Convenience, commercial concentration, and prosperity that contribute tocommuting and attracting customers
Functional design with comfort that leads to increased productivity for tenantcompanies
Sufficient standard floor space and comfortable spacious design, etc.

Environmental performance is ensured by energy saving, rooftop greening, etc.
Provide important facilities as a foundation for “business continuity”
Resilience to disasters, in terms of both location and specifications
Dignity of the area, sense of luxury and cleanliness of the building50

Safety, Security, and Comfortability for Tenants
Measures against Earthquakes
SHR's investment criteria require that the company's domestic portfolio has a seismic PML (probable maximumloss) of% or less in principle and that the addition of earthquake insurance is considered for individual properties

with a PML of% or more. The seismic PML of SHR's portfolio as of October

individual properties with a PML exceeding%.

Seismic PML of Top Five Properties based on Investment Ratio
Property Name

Investment Ratio(Acquisition Price Basis),, was 2.0%; there were no(As of October 31,

Seismic PML

Garden City Shinagawa Gotenyama

13.1%

0.7%

Akasaka Garden City

9.1%

4.3%

Gotenyama SH Building

8.4%

1.2%

Hommachi Minami Garden City

8.0%

1.0%

Hommachi Garden City (office building
portion)

7.0%

3.1%

51

)

Measures against Flooding
SHR has a system for minimizing damage from natural disasters by investigating the risks of inland flooding,river flooding and storm surge for our owned properties to assess our portfolio's flood risk and use the findings
to improve our business continuity plan (BCP).
As of October 31,, properties with a flood depth of . meters or more account for

Flood Depth Classification of Owned Properties (Acquisition Price Basis)
Flood Depth. % of our portfolio.
(As of October 31, 2023)
Total

<0.5m

≥ . m

. %

. %

. %

Greater Tokyo

. %

. %

. %

Osaka Area

-

. %

. %

Nagoya Area

-

. %

. %

. %

. %

. %

Greater Tokyo

. %

. %

. %

Osaka Area

. %

. %

. %

Nagoya Area

. %

. %

. %

Others

. %

. %

. %

-

. %

. %

-

. %

. %

. %

. %

. %

Office Building

Residence

Hotel
Osaka Area
Total

52

Disaster-Resilient Office Buildings
Garden City Shinagawa Gotenyama was built with business continuity in mind. The building is located on anelevated terrain with low flood risk and has a quake-absorbing structure for improved seismic resilience. Its on-site emergency power generator can supply electricity to common areas during a disruptive event. In addition, adisaster prevention center has been established to respond rapidly to incidents 24 hours a day,
Quake-absorbing structure

Emergency power facility

days a year.

Disaster prevention center

Similarly, Hommachi Minami Garden City takes business continuity into account by installing seismic braces oneach floor to absorb the forces that would act on the building in a major earthquake, and by situating its

mechanical room on the 3rd floor, above flood level. Despite these features, it still offers over 1,300 square
meters of column-less spaces and a ceiling height of 2.8 meters on standard floors.

At HK Yodoyabashi Garden Avenue, the floor level of the first floor has been raised by . m from the front roadon the north side to prevent flooding into the building, in readiness for flooding damage due to torrential rain,
etc. Flooding countermeasures have also been implemented in the B F parking lot, which is susceptible todamage due to rainwater flowing in from the road. Electrically operated waterproof panels that activate

automatically when a sensor detects a certain amount of flowing water are installed at the entrances and exitsof the roadway ramp to prevent possible flooding damage. We have also installed emergency generators forbuildings that can supply power to both common and exclusive areas, and are able to supply power for up tohours even when the supply of power from the power company is stopped, ensuring business continuity.
Electrically operated

Power supplied by emergency

waterproof panel

generators for buildings

53

Residence in Preparation for Disasters
Prime Maison Shinagawa is a rental condominium developed by Sekisui House in response to rising concerns

about power conservation and disaster prevention performance following the Great East Japan Earthquake, in
addition to climate change. This property has an emergency power generator that was introduced to ensure ahigher level of safety and security in the event of an emergency. The generator is connected to solar batteries

and storage batteries, ready to serve as an emergency power supply system for use in the event of a blackout.

Conceptual Diagram of Emergency Power Supply System

When power is cut due to a natural disaster or similar event, the emergency power generator is activated andsupplies power to common areas for approximately

hours. It can continue to supply power even longer

when connected with solar batteries and storage batteries. As a result, some lights for common corridors andthe entrance are illuminated, securing passageways and providing a sense of security even at night. In

addition, the generator also supplies power to the electrical outlets in the entrance, where residents would

gather, allowing them to charge mobile phones and other devices. The generator also permits the collection of
information via the monitor in the control room. Power is also supplied to the feed-water pump. This meansthat water will be supplied to common areas and dwelling units as long as the water supply has not been cut
off.

54

Examples of Disaster Prevention Equipment for Residences
Emergency cabinet for elevators

Prime Maison Gotenyama East andothersBench with oven function

Esty Maison Kyobashi and others

Distribution of stockpiled
emergency supplies to tenants

Esty Maison Ojima and others

AED (Automated External
Defibrillator)

Prime Maison Yokohama Nihonodori and others

55

Stockpile of emergency toilets

Prime Maison Shinagawa

Disaster relief vending machines

Prime Maison Ginza East and others

Conducting Tenant Satisfaction Surveys
SHR regularly conducts tenant satisfaction surveys with the aim not only to improve and stabilize leasing
operations, but also to communicate with residents and tenants and build reliable relationships.

For the surveys conducted in fiscal year 2023, we incorporated questions asking about their initiative status of
implementation and in-house discussions related to ESG and well-being into the survey items.

The survey results are shared with property management companies, building management companies andothers, and measures will be developed to further improve services.

Summary of Fiscal Year 2023 Survey
SurveyperiodRespondents

July to August 2023
Officebuilding
Residence
OfficeSurvey items

Response
ratebuilding
Residencetenants,

residents

Overall satisfaction, items regarding ESG, well-being, etc.
Items regarding rooms and common area's satisfaction, residents needs,
management conditions, interest in environmental issues, etc.

Officebuilding. %Residence. %56

Fiscal Year 2023 Survey Results

Office buildings

Residence"highly satisfied".

"highly satisfied".

A total of 93.3% responded that they were "satisfied" or

A total of 78.8% responded that they were "satisfied" or

Acclaimed Points

Acclaimed Points

Convenient location

Convenient location

Building grade, specifications,exterior and interior design ofGood surrounding environmentand security

entrancesWell-equipped facilities (homedelivery boxes and parking
spaces)Security and disaster resilience
Responsiveness and quality ofbuilding management

Design and atmosphere ofrooms, water facilities

companies
Satisfaction

Comfortability and safety

Satisfaction

. %

. %

Clean and tidy rooms and spaces

High soundproofing performance
Environmental friendlinessthrough installing LED lightingsin common areas, etc.
Many pleasant greeneryplantings
Internet connection

Points to be improved

Points to be improved

Aesthetic appearance ofentrance and lobby

Offering common spaces suchas café lounges and rental
conference rooms

Maintenance of parking lots forcars and bicycles
Air conditioning in common
areas(temperature and scent)57

Introducing Barrier-Free Facilities
Hommachi Minami Garden City was designed based on the Building Movement Facilitation Guidance Standard
required by the Act on Promotion of Smooth Transportation, etc. of Elderly Persons, Disabled Persons, etc.

(known as Barrier-Free Act) and is the first office building in Osaka City to be designated as barrier-free under
the law.

Key Features
Two multipurpose restrooms accessible to ostomates andwheelchair users on each office floor
Wheelchair-accessible elevators

Wide hallways that allow two wheelchairs to passThree wheelchair-accessible parking spaces in the parking
garage58

Acquisition of Certification for CASBEE Wellness Office“Garden City Shinagawa Gotenyama” received the Certification for CASBEE Wellness Office for the first time as
SHR, and certified as the highest evaluation rank, “S Rank”. Furthermore, the property has been received “SRank” of the Certification for CASBEE for Real Estate so far, it has also been authorized “S Rank” of theCertification for CASBEE Smart Wellness Office which can be received by combining each certification.

Main Assessment Points
Many efforts are taken to improve convenience, such as an accessiblelounge, common corridors, a rooftop garden available to all tenants, andElevator convenience

Many security measures have been implemented, including highearthquake resistance, seismic isolation structures, and emergency power
supply facilities that exceed legal standards

Many award-winning designs are used in terms of flexibility and design forboth layout and facilities
Tenant meetings are held every month to inform and provide feedback on
opinions

Overview of the Certification for CASBEE Wellness Office
Certification for CASBEE Wellness Office is a tool to evaluate the specifications, performance, and efforts ofbuildings that support the maintenance and promotion of the health and comfort for building users.

In addition to factors that directly affect the health and comfort for the workers working in the building, factorsthat contribute to the improvement of intellectual productivity and performance related to safety and security
are also evaluated. They are scored on the following five categories of evaluation items: "1. Health andComfort", "2. Improved Convenience", "3. Security and Safety", "4. Operation and Management" and "5.
Programs", and are then given ratings from "S Rank", "A Rank", "B+ Rank", "B- Rank" or "C Rank".

59

Social Responsibility

Contributing to Society

Sekisui House Group Philosophy and Guidelines for Contributing
to Society
The Sekisui House Group, to which SHAM belongs, has positioned coexisting with local communities as a key
issue in the social (S) area of ESG management, from the perspective of wishing for the happiness of local
communities. We are working to address this issue from two directions: social contributions through ourbusiness, and social contribution activities in aspects not covered by business. SHR and SHAM also carry out

initiatives and environmentally friendly activities in collaboration with tenants and local communities whereproperties are located.
Click here

for Contributing to Society of Sekisui House Group

Contribution to Local Communities
SHR takes initiatives to harmoniously co-exist with local communities by introducing equipment available toanyone, in addition to deepening communication with local residents through participation in events of local
communities in which its owned properties are located.

Utilization of Common SpaceIn addition to opening the entrances, ground floor lobbies, building sites, and conference rooms of ourproperties to the public for use as event spaces, SHR has introduced Share Bikes and Food Trucks in someproperties so that they can be used not only by tenants but also by local residents.

60

Participation in Midosuji
Illumination Event

Introduction of Share Bikes

Introduction of Food Trucks

Hommachi Garden City

Garden City Shinagawa Gotenyama andAkasaka Garden City

Introduction of Electric
Kickboards

Introduction of Digital Signage

Provision of Coworking Space

Esty Maison Minamiazabu and others

Garden City Shinagawa Gotenyama and

Garden City Shinagawa Gotenyama

othersothersParticipation in the Minato-ku Adopt Program
SHAM has agreed with Minato-ku, Tokyo, where the office is located, and regularly conducts cleanup activities
in the vicinity of the office through participation in the Minato-ku Adopt Program.

The Adopt Program refers to a series of activities involving the "adoption" of local roads, parks, etc. by deeming
them as "foster children", and groups or citizens, etc. consisting of ward residents, etc. as "foster parents". The"foster parents" engage in beautification and cleaning activities of their "foster children". We will contribute to
our cooperation with tenants and local communities through cleanup activities.

Activities along with the Government and Industrial Groups
Sekisui House Group believes that it bears a significant role and responsibility in the development of housing
and the living environment in Japan, and thus participates in activities of many industry groups. As a full-

member of The Investment Trusts Association, Japan as well as a regular member of The Association for Real
Estate Securitization (ARES), SHAM takes action to further develop the industry.

61Participation in “Sekisui House Matching Program”
The “Sekisui House Matching Program” is an employee-driven donation

program that has been implemented by Sekisui House Group since fiscal year

200 to support NPOs and other organizations. Under this system, the Group's
employees set aside the amount they wish to donate, in units ofyen, andSekisui House adds an equal amount as subsidies to make donations.

The “Children's Fund” and the “Environmental Fund” have been established,and employees can freely choose which one to donate to.
In fiscal year 2, a total of approximately

earmarked to support.

million yen was raised andcivic groups from among those recommended by

employees nationwide, focusing on activities that lead to coordination with
our employees, collaborations and the SDGs.
Click here

for details on the "Sekisui House Matching Program".

Structure of Sekisui House Matching Program62

Other donations
SHAM makes donations through activities, such as collecting plastic bottle caps and used stamps, giving out
unused calendars and notebooks for recycling.
Since, through donating plastic bottle caps to a NPO, we have participated in activities to deliver vaccines

to children around the world through UNICEF.

Relief Donation
When large-scale natural disasters occur inside or outside Japan, SHAM offers relief donations to be used for
rescue and restoration activities in the affected areas.

Endorsing “COOL CHOICE”
SHAM supports “COOL CHOICE”, a national campaign promoted by the Ministry of the Environment as measuresagainst global warming, and takes the following initiatives as environmental measures.

Maintaining moderate temperature settings on air conditioners
Promoting Cool Biz and Warm Biz

Promoting a paper-free environment for internal materials by using smart
devices and a shared server

Stopped using paper cups in the company, making it a rule for individuals tobring their own cups

63Social Responsibility

Respect for Human Rights

Respect for Human Rights
At the core of the Sekisui House Group’s corporate philosophy

is “love of humanity,” and the principle ofvaluing human beings is the foundation of the Group’s corporate management. In accordance with the "Sekisui

House Group Human Rights Policy", established by Sekisui House in April, 2020, SHAM strives to ensure that there

are no infringements of human rights, including harassment, to contribute to the creation of a workplaceenvironment where all employees can work enthusiastically and lead to growth.

All Sekisui House Group officers and employees (including part-time and fixed-term employees) must comply

with this policy, and the Sekisui House Group promotes awareness of the policy through training and othermeasures. the Group also publishes the policy on our website and expect all stakeholders inside and outside
the Group to understand and support the Group’s policies and initiatives for respecting human rights.

In addition, to disclose information as stated in the Human Rights Policy, we publish a human rights report.

Sekisui House Group Human Rights Policy (excerpt)
We are committed to respecting human rights as stipulated in the International Bill of Human Rights and theILO (International Labour Organization) Declaration on Fundamental Principles and Rights at Work. We are asignatory of the United Nations Global Compact and we support its ten principles.
We strictly prohibit any form of forced labor and child labor.

We shall continue to promote the creation of a corporate structure with zero tolerance for any discriminationor harassment based on birth, nationality, race, ethnicity, beliefs, religion, gender, sexual orientation, gender

identity, age, disabilities, preference, educational background, family or any other ground. We also strive tomaintain a healthy working environment without discrimination in employment or treatment of employees.
We respect the freedom of association and the right to collective bargaining. We comply with labor-related
laws and regulations and observe labor-management agreements. We are committed to engaging in

employees or their representatives in good faith through dialogue and consultations and continuously work
to build constructive relations.

We comply with national and regional laws and regulations in countries and regions where we operate. Where
national and regional laws and regulations conflict with international human rights standards, we64

seek ways to honor the principles of internationally recognized human rights while complying withnational and regional laws and regulations.
Click here

Click here

for all of Sekisui House Group Human Rights Policy.
for Sekisui House Group Human Right Report 2023.

Promoting Human Rights Policies
To raise awareness of human rights issues and foster a work environment in which employees can work

comfortably, human relations training is held for all Group employees every year. This training is designed to
improve employees’ awareness around human rights and provides an opportunity for them to think abouthuman rights as their own issues in their everyday work. The training style emphasizes dialogue among
employees with the head of each organization acting as facilitator.

In addition, we solicit human rights slogans from all Group employees and their families for Human Rights
Week, from December 4th to 10th every year. The slogans selected as outstanding works are displayed on
posters in Group companies.

Human Rights Reporting System
The Sekisui House Group has established several reporting systems, including the Compliance Helpline, toidentify concerns and potential negative human rights impacts associated with its business activities, and is

working to enhance its consultation services through the appropriate operation of these systems. The "Sexual

Harassment and Power Harassment Hotline" has been established as a consultation desk system for all humanrights issues, including various types of harassment or any consultation for creating a comfortable working
environment for employees with disabilities. Furthermore, inquiries regarding human rights may be madethrough our public website as well.

SHAM also has one male and one female personnel in charge of the consultation desk.

65

Social Responsibility

Human Resource
Development

Fundamental policy for human resource development
To achieve the Sekisui House Group’s global vision to make home the happiest place in the world, Sekisui

House formulated the Group’s fundamental policy for human resource development as, “maximize the value ofhuman capital and drive business growth through diversity & inclusion of knowledge and experience.” In order toprovide happiness in the era of the 100-year lifespan, the Group aims to improve human capital value and social

value and thereby further enhance corporate value. SHAM, as a member of Sekisui House Group, shares the Group’s
fundamental policy for human resource development and promotes our personnel system reform to maximize thevalue of human capital through employee autonomy and alignment of efforts.

Securing Talented Personnel
SHAM works to recruit and secure great talent in line with changes in the business environment and theorganization, and implements job rotations to promote varied work experiences and skill development. In

addition, by accepting specialized seconded personnel from the Sekisui House Group who have a wide range ofexperience and know-how in real estate investment and management, SHAM aims to utilize their capabilities toachieve advanced asset management.

Click here for Status of directors and employees.

Strategy for Developing Human Resources
Being a part of this philosophy as a Sekisui House Group member, SHAM supports our employees to think
about their own careers and to proactively take on challenges to realize them.

Personnel evaluations are conducted including ESG initiatives and compliance status, based on the "ability andbehavior evaluation", which assesses the degree of ability and behavior expected of each grade, and the"performance evaluation", which assesses the degree of achievement and the process. Performance reviews
include multiple stages of discussion to foster understanding and motivation, thus tying the process todevelopment. We also use multifaceted reviews for managers, with employees providing feedback on theirobservations with the goal of eliciting new understandings and behavior change.

66Performance Review Process Using Discussions

Support for Acquiring and Retaining Qualifications
SHAM helps and encourages employees to enhance their expertise by acquiring qualifications such as the"Association for Real Estate Securitization (ARES) Certified Master", an educational program that provides

systematic study in the fields of real estate and finance. SHAM aims to improve the professional abilities of
employees by covering the cost of training, examinations, continuing education, and seminars for thesequalifications.

Click here for the status of qualifications.

Training System
SHAM offers a comprehensive training program for all directors and employees to develop their skills. In addition, todevelop human resources with expertise as real estate investment management professionals with a broader

perspective and insight, SHAM also offers free voluntary training opportunities such as seminars. Furthermore, tobring more comfort and ease to the workplace, a human relations training (training on human rights, power
harassment, and sexual harassment) is conducted every year.

In addition, SHAM has set the target (KPI) for the training system. The result is as follows.

3

Result for FY 2022

2.4 courses

KPI: Achieve 100% annual internal training participation rate by FY 2023

Result for FY 2022

100%

Click here for details on training attendance results.

67

Training System

General Training
This training is aimed at improving company-wide engagement and raising the level of business skills, humanskills, and specialized skills for all directors and employees (including part-time employees, and other nonregular employees). Themes are selected with reference to the results of governance awareness surveys

conducted by the Sekisui House Group, and in principle, once every two to three years, using an externalorganization.

Human Relations Training
This training is common to the Sekisui House Group and conducted every year for all employees of the Sekisui

House Group, with one of the purposes being to raise awareness of human rights issues and foster a comfortableworking environment. The human relations training includes "promotion committee training" for managers and "allemployees training" for all employees, including managers, and is conducted annually to deepen understanding of
human rights.

Compliance Training
This training is designed for all directors and employees (including part-time employees, etc.) to improve theirknowledge and ability in compliance, which is fundamental to conducting business as a member of society, andto acquire the knowledge necessary to conduct the investment management business.

ESG Training
This training is meant to deepen the understanding of the latest ESG information of the Sekisui House Groupand topics related to ESG in order for all directors and employees (including part-time employees, etc.) to sharecommon awareness and knowledge.

68Tiered Training
This training utilizes external organizations and aims to improve various abilities ( job posture, advanced

expertise, collaboration ability, etc.) based on the skills and requirements required for each job level. It is
intended for all directors and employees (including part-time employees, etc.)

Multi-faceted Observational Investigation
In addition to self-evaluations, this investigation aims to clarify objective “strengths” and “challenges” byevaluating individuals from various perspectives, including superiors, subordinates, and colleagues, to create

an open organization and workplace climate in which leaders and members can easily flourish. It is conducted
once a year for managers using an external organization. By conducting the investigation every year, we carryout a cycle of understanding issues, verification/feedback, setting goals, and implementing them.

Cafeteria Plan Training
From the perspective of personal activity planning and self-development, each employee is able to freely selectand attend seminars by field, rank business skills, IT, etc. We recommend that all directors and employees(including part-time employees, etc.) attend at least one seminar per year.

69

Social Responsibility

Creating Comfortable
Workplace Environment

Promoting Diversity
The Sekisui House Group set the diversity promotion policy and the three pillars of the policy are promoting
the participation of women; utilizing diverse personnel; and promoting diverse workstyles. The Group is

working to create an environment and structure where both employees and the group can achieve sustainablegrowth. As a member of the Group, SHAM also implements initiatives in accordance with this policy.
Click here

for more information on the Sekisui House Group's promotion of diversity.

Promoting of Active Participation by Women
The Sekisui House Group has formulated the goals of the “Sekisui House’s Action Plan for the Promotion of
Active Participation by Women”, and is proceeding with initiatives to promote the appointment of female

managers throughout the Sekisui House Group. SHAM has also set an increase in the ratio of female managers

as a KPI, and not only promotes the active participation of female employees, but also supports diverse humanresources so that they can receive fair opportunities.

KPI：Achieve a female manager percentage of 7% by fiscal year 2023

Result for FY 2022

4.0％

Supporting Active Participation of the Senior Employees
SHAM has introduced an age 65 mandatory retirement rule so that all individual employees can work moreenthusiastically, capably and energetically for a longer period. In addition, in April 2021, we introduced a postretirement re-employment system for employees aged 65 through 70 to support their active participation.

70

Supporting Active Participation of Persons with Disabilities
SHAM promotes the employment of persons with disabilities based on the Act to Facilitate the Employment of
Persons with Disabilities. We support their activities by creating opportunities for conversation so that

employees with disabilities, their supervisors and department members can communicate and consult witheach other. We aim to create a workplace where every employee, with or without disabilities, can work for along time.

Promoting Work-Life Balance
SHAM is working to realize a variety of work styles while stimulating communications in order to promote worklife balance of our employees. Utilizing telecommuting, staggered working hours, etc., to establish work styles

that are compatible with changes in employee's live, SHAM will continue to emphasize the importance of worklife balance and make our employees feel fulfilled and happy.

Improvement of Employees' Benefits
SHAM strives to provide a workplace environment where employees can enhance their motivation to work anddemonstrate their skills through various welfare programs for all employees.

71Key Benefit Systems
System Name

Subject scope

Description

Childcare leave

All employees

Family-careleave

Paid leave for raising children under three years of age (includes children of legal
guardians, opposite-sex common-law spouses, and same-sex domestic partners)

All employees

Paid leave for providing nursing care to a family member

Sick childcareleave

All employees

Paid leave for nursing a sick or injured child or taking them to receive medical
services (vaccinations, checkups, etc.)

Child-support
leave

All employees except parttime workers

Allows employees who are supporting children under eighteen years of age (Includes
children of legal guardians, opposite-sex common-law spouses and same-sex
domestic partners) to take leave

Short working
hours

All employees

System for working shorter hours to raise a child

Congratulatory
or condolence
payment

All directors andemployees except

contract/part-time workers

One-time payment granted in the event of a marriage, childbirth, death, injury,
illness, or damaging event experienced by employee or their family

Staggeredworking hours

All employees

Permits employees to move their daily start and finish times forward or backfollowing designated patterns

By-the-hour
annual leave

All employees except
contract/ part-timeworkers

Allows up to five days of annual paid leave to be taken in hourly units

Accumulated
annual leave

All employees who workwithout a fixed term

*Including contract employees
who have a contract for morethan 3 years

Qualification
rewardAll employees except
temporary and part-timeworkers

Credentialing
stipendAll employees except
temporary, contract, andpart-time workers

Self-directed

Allows recipients to accumulate annual leave past the legal two-year limit andtake as many as 10 days off in combination with standard annual leave

Supporting funds granted to those who pass a national certifying exam or othereligible credentialing exam

Payment granted to those who pass a national certifying exam or other eligible
credentialing exam

careerdevelopment

All employees except
temporary and part-timeworkers

Advanced study
support systems

All employees except
temporary and part-time

Supports employees financially to acquire specialized knowledge at graduate

Employee stock

All employees except
temporary, contract, andpart-time workers

Allows Sekisui House Group company employees to purchase Sekisui House, Ltd.
Stock through payroll deductions and provides an incentive of % of thepurchase priceAll employees except parttime workers

Corporate pension plan in which future benefits are determined based on theleaveownership plan(with incentives)
Defined-contribution
pension planworkers

Allows employees who are studying at their own expense to take leave for acertain period of time and provides them with a loan to support their studies

schools, etc.

total of contributed sum and investment earnings

72

Encouraging Male Employees to Take Childcare Leave
SHAM encourages male employees who have a child under three years of age to take at least one month ofchildcare leave. SHAM began its childcare leave system for working fathers in September 2018. The first monthis paid, and leave can be taken in as many as four segments based on their respective situations. In April 2021,

SHAM expanded the system into an eight-week postpartum benefit that can be used in one-day increments, toenable more choices and flexibility. SHAM has raised awareness of the importance of the father’s presence

during this period when new mothers are physically and emotionally taxed and at higher risk of postpartum
depression.

KPI: Achieve childcare leave take-up rate for eligible male employees by
FY

:

%

Result for FY 2022

100％

Commitment to Well-Being
Initiatives for Health and Safety
SHAM has formulated the Rules of the Health Committee and established the Health Committee to promote thesafety and health management activities of employees. The committee includes an occupational physician andmeets monthly to discuss the workplace environment and gain insights for preventing health issues in theworkplace and promoting improvements in employee health.

The committee also set up working groups to discuss healthcare and hygiene management, held walking

events to create opportunities for employees to communicate with each other and to eliminate lack of exercise
brought by teleworking, as well as to inform employees about influenza vaccination.

SHAM also conducts stress checks for all employees to prevent the occurrence of any mental health issues. We
encourage each employee to be aware of stress and provide consultation desk system from specialists(counselors). In this way, we provide support in dealing with stress and strive to improve the workplaceenvironment.

Conducting employee satisfaction surveys and ESG interaction
SHAM gauges employee satisfaction using an annual governance awareness survey of all Sekisui House Group
employees. Utilizing the survey, the company provides opportunities for all employees to share thoughts on

topics such as corporate ethics and the workplace environment, encouraging more-active communication in
the workplace.

Furthermore, as a member of the Sekisui House Group, we conduct a “Well-Being Survey” for all employees toanalyze the correlation between individual and workplace happiness, as well as an “ESG Dialogue” every six
months with the theme of making employees, customers and society happy through business. Through ESG
dialogue, we also strive to create a workplace culture that ensures psychological safety for every employee,
providing a calm atmosphere that enables them to feel confident in expressing what they really feel,irrespective of job rank or employment type.

73

Social Responsibility

Occupational Health and
SafetyLabor Relations
SHAM does not have a labor union, but respects “the freedom of association and the right to collective
bargaining” as stated in the Sekisui House Group Human Rights Policy.

In addition, SHAM complies with labor-related laws and regulations and labor-management agreements, andworks to build constructive relationships through sincere dialogue and negotiation with employees (including
workers with shorter working hours) or employee representatives, and our labor-management relations havebeen amicable.

Responding to Overwork
SHAM has set KPIs (targets) to reduce excessive working hours and overtime work, and is implementing thefollowing initiatives.

3

Result for FY 2022

. hours

KPI: Achieve an annual paid leave take-up rate of 70% or more by FY 2023

Result for FY 2022
Monitoring of working hours

When monthly overtime hours exceed

75.6%

hours for more than three months throughout the year, notification to

the supervisor and hearings with employees are conducted. When the working hours subject to healthmanagement exceed

hours, a warning notification is sent to the supervisor and the person in question.

Furthermore, SHAM has set a KPI ofachieve by fiscal year

hours or less for the average monthly working hours per person (to), and is working to reduce overtime work throughout the company.

74

Encouragement of planned use of annual paid leave

We have set a KPI of an annual paid leave take-up rate of 70% or more (by fiscal year 2023), which exceeds thelegally mandated annual paid leave utilization of five days, and encourage all employees to take their leave in aplanned manner.

Wage System and Compliance with Equal Pay for Equal WorkSHAM complies with the minimum wage provisions of labor-related laws and regulations for all employees,

including part-time employees, etc., and pays wages that lead to maintaining and improving living standards,

taking prices into consideration. In addition, we apply a remuneration system that complies with equal pay for
equal work, and do not differentiate remuneration based on gender.

In addition, SHAM conducts evaluations for each evaluation item in personnel evaluations, and the results ofthe evaluations are appropriately reflected in employee promotions, salary increases, and bonuses. Bonuses

are paid three times a year - June, December and March - of which the amount paid for June and December isdetermined according to attendance rate and individual performance, while the amount paid for March isdetermined by overall company performance along with individual performance.

Labor-Related Violations and Accidents
There have been no serious labor-related violations of laws and regulations or accidents during the period fromJanuary 1 to December 31, 2022.
Click here for labor-related data.

75

Social Responsibility

Engagement with Investors

SHR strives to disclose information that is appropriate and easy to understand for all investors through theenhancement of its website, timely disclosure, and the issuance of ESG reports, etc. In 20, our information

disclosure was rated highly according to the GRESB disclosure evaluation (five-level evaluation from A to E),

which evaluates the degree of fulfillment of ESG information disclosure, and obtained the highest “A” rating for
four consecutive years. In addition, we place importance on dialogue with investors, and are implementing thefollowing initiatives.

Engagement with Institutional Investors
1

Financial results briefing for domestic
institutional investors, analysts, etc.

IR meetings for domestic institutional investors,
analysts, etc.

IR meetings for overseas institutional investors,
etc.

76

15th FP ended Apr.
2022 and16th FP ended Oct.
2022

June/December

June/December

126 times

136 times

43 times

60 times

Engagement with Individual Investors
th FP ended Apr.
andth FP ended Oct.

th FP ended Apr.
andth FP ended Oct.

times

times

Events for individual investors
Click here

Click here

for an archive of past events (Japanese only).

for a special website for individual investors (Japanese only).

(Note) Regarding the number of IR meetings held for domestic and overseas institutional investors, analysts, etc., as well as
events held for individual investors, IR meetings and events held inare counted as the number of IR meetings and events held inended Apr.

andth FP ended Oct.

th FP ended Apr.

andth FP ended Oct.

, IR meetings and events held inth FP

are counted as the number of IR meetings and events held in77.

GovernanceCorporate Governance

Governance of SHR
SHR's governing bodies consist of a general meeting of unitholders, a board of directors with at least an
executive director and a supervisory director, and an accounting auditor.

The executive director oversees SHR's operations and, as SHR's representative, has the authority to act in andout of court with respect to any and all of SHR's affairs. The supervisory directors supervise the executive
director's execution of duties. The Board of Directors is held at least once every three months and makes

important decisions regarding SHR's operations, including approval of the execution of important duties by the
executive directors and financial statements. The supervisory directors supervise the executive director's workby means of reports provided by the executive director on the status of the management of SHR's assets asneeded and on investigations results and other tasks requested by the supervisory directors.

The accounting auditor audits SHR's financial statements and also serves legally mandated roles, such asreporting to the supervisory auditors in the event that, in its auditing process, it discovers an illegal action orserious violation of any law or regulation, or of SHR's Articles of Incorporation in connection with the executive
director's execution of duties.

78

Executive Director and Supervisory Directors
Attendance Status
Position

Name

Reasons for Appointment

FP ended
Oct. 2022
th FP)FP endedApr.
( th FP)

Atsuhiro
Kida

We have appointed him as the Executive
Director because it is expected that he will beable to accurately execute operations of SHR,
taking into account comprehensively hisexpertise in real estate, financial accounting
and extensive experience in REIT operations.

times/
times（100%）

times/
times（100%）Yu YadaIn addition to having his excellent character,insight, and ability, he is well versed incorporate management and other fields as an
attorney-at-law. In light of his expertise andexperience in each of these fields, we believe
he is qualified to serve as a Supervisory
Director of SHR, and have appointed him as a
Supervisory Director.

times/
times（100%）

times/
times（100%）

times/
times（100%）

times/
times（100%）(

Executive
Director

Supervisory
Director (Note)

Rei
Yamashita

In addition to having her excellent character,insight, and ability, she is well versed incorporate management and other fields as acertified public accountant. In light of her
expertise and experience in each of thesefields, we believe she is qualified to serve as a
Supervisory Director of SHR, and haveappointed her as a Supervisory Director.

（Note） Supervisory Directors of SHR are independent officers who have no special interest with
SHR based on Article 100 of the Act on Investment Trusts and Investment Corporations(Investment Trust Act) as well as Articleof the Regulation for Enforcement of the Act on

Investment Trusts and Investment Corporations.

Click here

for biographies of current directors.

Promoting Diversity among Directors

Based on the belief that diversity is important to SHR, we promote diversity in the composition of directors.
Since January, the ratio of female directors has been

. %.

Restrictions on the Sale and Purchase of Investment Units, etc. by Directors

From the viewpoint of preventing insider trading, SHR’s “Insider Trading Management Regulation” prohibits
Directors of SHR from buying and selling investment units or investment corporation bonds issued by SHR.
Thus, none of our Executive Director or Supervisory Directors holds the investment units or investment
corporation bonds of SHR.

79

Director's Remuneration
The upper limit of remunerations for executive directors and supervisory directors is stipulated in the Articles ofIncorporation and the amount is determined at the Board of Directors (however, the upper limit per person is
1,000,

yen per month for an executive director, and,yen per month for a supervisory director).

Directors' compensation is as follows.

Position

Name

Executive
Director

Atsuhiro
Kida

Supervisory
Director

Remuneration Amount (Thousand yen)
FP ended Oct. 2022
( th FP)FP ended Apr.
( th FP)--Yu Yada,,Rei
Yamashita,,

Accounting Auditor
Accounting auditor
NameErnst & Young ShinNihon LLC

Continuous Audit Period
From September

until present

Accounting Auditor's Compensation

The compensation for the accounting auditor is set by the Investment Corporation's Board of Directors at a
maximum of

million yen for each fiscal period covered by the audit.

Accounting auditor

Compensation Amount (Thousand yen)Compensation
Details

FP ended Oct.
(

Compensation
based on audit
Ernst & Young ShinNihon LLC

FP ended Apr.

th FP)(,

attestation
services

Compensation for
non-audit services

,

-

80

th FP)-

Organizational Structure
The organizational structure of SHAM, to which SHR entrusts the management of its assets, is as below.

Organization Chart of SHAM

< Overview of each organization >NameOverview
Composition
Chair: President & Representative Director
Members: All Directors and Auditors
Frequency of meetings
A meeting of the Board of Directors is held once a month.

An extraordinary meeting of the Board of Directors is called as needed
Requirements for Resolution

Board ofDirectors

Resolutions shall be adopted by a majority of the Directors present at a meeting where a majority of the
Directors who are entitled to participate in the voting are present. Also, Directors who have a special interestin the proceedings of the Board of Directors cannot participate in voting.
Resolutions

In addition to matters stipulated in laws and regulations or the Articles of Incorporation, the Board of
Directors decides the following matters;

Matters relating to the general meeting of shareholders of SHAM
Matters relating to Directors, employees, etc. of SHAM
Matters relating to the assets or finances of SHAM

Important matters relating to the business operations of SHAM
Important matters relating to the asset management of SHR
Matters relating to compliance

Other important matters related to the execution of business operations

81

Name

Overview
Composition

Committee Chairman: President & Representative Director

Committee members: All full-time Directors, including the Compliance Officer who holds the position of
Director; the Chief Manager of the ESG Promotion Dept.; the Chief Manager of the Internal Control

Promotion Dept.; the Chief Manager of the Investment Operations Div.; the Chief Managers of the FinanceDept., IR Dept., Accounting Dept., and General Affairs Dept.; and external committee members

For the current external committee members, a total of two people have been appointed: one real estateappraiser and one attorney who have no particular interest with SHAM or the directors and employees, orinterested parties of SHAM （Note）
Frequency of meetings
In principle, held at least once every three months, and as needed
Holding/Resolution requirements
Established with the attendance of a majority of members of the committee who can participate in voting

However, attendance of the following persons is required: the Committee Chairman, the Compliance Officer
who holds the position of Director, the Chief Manager of the Investment Operations Div., and at least one of
the external committee member with the qualification of a real estate appraiser
Investment
Committee

Resolutions shall be adopted by all voting members present, including external committee members
Contents of deliberation
Development and revision of the investment policy and investment plan of SHR
Development and revision of SHR's management policy and management plan
Development and revision of the basic policy relating to the financing of SHR
Decision to acquire and sell the assets of SHR

Decision to lease, outsource management, or carry out construction work of SHR's assets (limited tothose stipulated in SHAM's “Rules on Administrative Authorities”)
Development and revision of long-term repair plans

Determination of matters relating to the financing of SHR

Determination of other transactions between SHR and interested parties as stipulated in the “Rules forTransactions with Interested Parties”
Important matters relating to the investment policy of SHR

Matters for which each committee member requested deliberation and resolution

Matters deemed necessary by the Committee Chairman and matters separately stipulated by the internal
regulations of SHAM
Other incidental matters
Composition
Compliance
Committee

Committee Chairman: Compliance Officer

Committee members: All full-time Directors, including the President & Representative Director, and an
external committee member

82

Name

Overview

For the current external committee member, one attorney who has no particular interest with SHAM or the
directors and employees, or interested parties of SHAM has been appointed （Note）
Frequency of meetings

In principle, held at least once every three months, and as needed
Holding/Resolution requirements
Established with the attendance of a majority of members of the committee who can participate in voting
However, attendance of the Committee Chairman and the external committee member is required

Resolutions shall be adopted by the affirmative vote of the Committee Chairman and all voting members
Compliance
Committee

present, including the external committee member
Contents of deliberation

Determination of transactions between SHR and interested parties

Development and revision of compliance regulations, compliance manuals, and compliance programs
Development and revision of Internal Audit Regulations
Matters relating to the risk management of SHAM

Matters for which the Committee Chairman requested deliberation and resolution

Matters deemed necessary by the Committee Chairman and matters separately stipulated by the internal
regulations of SHAM
Matters relating to the handling of complaints, etc. against SHAM and other matters relating to acts thatare inappropriate or suspected to be inappropriate in terms of complianceDecision to acquire and sell the assets of SHR
Other incidental matters（Note） The appointment or dismissal of external committee members is carried out by resolution of the Board of Directorsof SHAM, but it is necessary to obtain approval from the Board of Directors of SHR before or after the resolution of
the Board of Directors of SHAM.

83

Asset Management Fee
Concerning the asset management fee paid by SHR to SHAM, the following management fee structure has been
adopted from the viewpoint of emphasizing linkage with unitholder profits. Regarding the management fee ➀,SHR introduced a mechanism of “fees linked to total assets and unit price performance”, in which the fee rate
fluctuates by comparing the performance of the investment unit price of SHR with the performance of theTokyo Stock Exchange REIT Index. Through this process, we are further strengthening the incentives tomaximize the unitholder value of SHR by aligning the interests of SHAM and, consequently, Sekisui House, as astockholder of SHAM, with the interests of unitholders of SHR.

Compensation Amount (Thousand yen)
FP ended Oct. 2022
( th FP)FP ended Apr.
( th FP)Management Fee ①(Fees linked to total assets and unit price performance)
Total assets x ( .

% (annual rate) +

,

,

,

,

(Note )

(Note )

-

-

-

-

Rates linked to the Tokyo Stock Exchange REIT Index) (Note )Management Fee ②(Fees linked to DPU and operating income)(Distributable amount per unit (Note ) ×

Operating income (Note ) × .

%）×(Note )

Management Fee ③(Acquisition fees),

Trading value related to the acquisition ofreal estate-related assets(Note )

× . %(In the case of acquisition from interested parties,
there is no acquisition fee)Management Fee ④(Disposition fees)
Trading value related to the disposition ofreal estate-related assets (Note ) × . % (Note )(In the case of disposition from interested parties,
there is no disposition fee)Management Fee ⑤(Merger fees)
Value of real estate-related assets held by

the merger counterparty at the time of the merger x . %84

(Note1) With regard to rates, unless otherwise specified, applicable rates or expected rates are stated instead of maximum
rates.

(Note2) The upper and lower limits of rates linked to the Tokyo Stock Exchange REIT Index performance are +0.02% and-0.02% respectively. The rate fluctuates depending on the performance of the investment unit price of SHR incomparison with the Tokyo Stock Exchange REIT Index.

(Note3) Calculated as the distributable amount before deduction of Management Fee ➁divided by the total number of issued
investment units.

(Note4) Operating Income of before deduction of Management Fee ➁.

(Note ) As SHR implemented a -for- split of the investment units with May ,formula includes multiplication , which is the split ratio.

as the effective date, Management Fee ➁(Note ) The trading value does not include consumption tax, etc. and expenses, etc.
(Note ) In case of loss on disposition, the fee rate will be 0%.

(Note ) Amounts of the asset management fees related to the silent partnership equity interest are included in the bookvalue.

Evaluation of the Effectiveness of SHR’s Board of Directors and
SHAM’s Board of Directors
SHR and SHAM set "Enhancing the Effectiveness of SHR's Board of Directors and SHAM's Board of Directors" aswell as "Conducting effectiveness evaluation questionnaire" as KPIs, and conducted self-evaluation. With thisself-evaluation, we do not only confirm whether the respective Boards of Directors fulfill their roles responsibly,
but also enhance the effectiveness of the respective Boards of Directors.

Effectiveness evaluation questionnaire is conducted once a year so that Executive Director, Supervisory

Directors, Directors, and Auditors can identify issues and make improvements based on the self-evaluation.
In the previous questionnaire, SHR’s Board of Directors and SHAM’s Board of Directors confirmed that theireffectiveness was sufficiently ensured in terms of member composition, frequency of meetings, number of

agenda items, and the status of deliberation methods and discussions. On the other hand, it is recognized thatstrengthening the foundations for formulating management policies and facilitating the management ofmeetings are issues to be addressed.

We will continue to strive to improve the effectiveness of SHR’s Board of Directors and SHAM’s Board of Directors by
responding sincerely to issues recognized from the results of the questionnaire.

85GovernanceCompliance

Compliance Policy
At SHAM, compliance means that directors and employees accurately understand the purpose and contents oflaws and regulations, comply with them, and execute sincere and fair corporate activities that do not conflictwith social norms. SHAM has established compliance rules to provide a system for directors and employees tocomply with laws and regulations, properly manage the assets, and ensure proper business operations. Basedon the basic policy described below, SHAM is working to ensure thorough compliance.

【 Basic Policies 】
a. SHAM is fully aware that lack of compliance could undermine SHAM’s management base, and has
positioned thorough compliance as one of its most important management issues.

b. As a company that conducts financial instruments business and manages the assets of registeredinvestment corporations, SHAM recognizes its responsibility to strive to realize the value of the worksof SHAM, which is socially demanded. To increase the value of the work of SHAM qualitatively andquantitatively, SHAM will actively and constantly engage in compliance.

c. SHAM aims to contribute to the development of the economy and society by developing the abovementioned compliance activities, thereby enhancing the reputation from investors and establishing
the trust of society at large.

Sekisui House Group (the Group), to which SHAM belongs, regards compliance as a management issue thatshould be constantly addressed, and strives to ensure and promote thorough compliance. The Group operates

the "Sekisui House Group Corporate Ethics Guidelines" as a set of matters concerning common corporate ethics
observed by the company, directors, and employees. In addition, the Group distributes pamphlets containing
the Corporate Philosophy and the Corporate Ethics Guidelines to all Group employees and conducts training

sessions as part of thorough-going efforts to spread awareness. Furthermore, all directors and employees are

obliged to submit "Written Pledge to Comply with the Corporate Ethics Principles" every year and strive to act

in accordance with corporate ethics. The Group will continue to work together to thoroughly enforce corporate
ethics.

Sekisui House Group Corporate Ethics Guidelines86Compliance System
SHAM has established the following departments and institutions intending to ensure compliance.

[Compliance Officer and Internal Control Promotion Department]
SHAM has established the Internal Control Promotion Department which conducts work related to
SHAM's risk management, monitors the status of compliance with legislation and regulations, andmanages internal auditing. SHAM has also appointed a Compliance Officer as the person responsible foroverseeing the compliance of SHR and SHAM in addition to the operations of the Internal Control

Promotion Department. The Compliance Officer is appointed as personnel with sufficient screening andsurveillance capabilities to observe compliance with legislation and norms, develop SHAM's complianceregulations and cultivate compliance awareness among directors and employees of SHAM.

[Compliance Committee]
SHAM has established the Compliance Committee as a body to deliberate and decide on compliancematters in the management of SHR's assets.

[Investment Committee]
SHAM has established the Investment Committee as an organization that deliberates and decides on theinvestment policy of SHR and other matters related to asset management. In making resolutions at theInvestment Committee meetings, the Compliance Officer shall verify whether or not there is any problem
from the perspective of compliance with laws, regulations, rules and other compliance issues. If

Compliance Officer determines that there is a serious compliance problem, Compliance Officer shallorder the Investment Committee to suspend its deliberations or return the proposal to the drafting
department even during the deliberations of the Investment Committee.

Click here for the details of Compliance Committee and Investment Committee.

87Compliance Training
SHAM has established its compliance and internal control system in accordance with "the Financial Instruments
and Exchange Act", "the Comprehensive Guidelines for Supervision of Financial Instruments Business

Operators, etc." and "the Findings from Inspections". To gain the trust of stakeholders, SHAM recognizes that

directors and employees must understand the importance of compliance and act in a compliant manner intheir daily operations in addition to the establishment of the compliance system. Therefore, SHAM has set"Conducting compliance training by external experts for all directors and employees four times a year, andachieving 100% participation rate" as a KPI, and is working to create the organizational culture that emphasizes

compliance, creating opportunities for all directors and employees to deepen the understanding of complianceand raise the awareness of compliance through compliance training.

Click here for the implementation status of compliance training.

Efforts to Prevent Bribery, Corruption, etc.
Sekisui House Group, to which SHAM belongs, has established and operates the “Sekisui House Group

Corporate Ethics Guidelines” as a set of matters concerning common corporate ethics. This guideline stipulates
entertainment and gift-giving for customers, business partners, and public officials, etc. from the viewpoint ofpreventing corruption. Based on this guideline, the Group established the Corruption Prevention Guidelines
and is working to make them known.

In addition, this Ethics guidelines regulates the conducting of donations and political contributions, andstipulates that each contribution is required to comply with relevant laws and regulations and be approved inadvance in accordance with internal rules.
Click here

for Sekisui House Group Corporate Ethics Guidelines.

SHAM monitors the appropriateness of the selection of outsources and expenditures such as expenses ininternal audit, and reports the results of internal audits to SHAM's Board of Directors. In addition, compliancetraining is provided to all directors and employees to promote their understanding of the prevention ofcorruption by, for example, taking up topics related to anti-corruption.

Furthermore, SHAM has formulated the “Compliance Manual” as a specific guide for directors and employees toimplement compliance, and has stipulated the prohibition of fraudulent acts, such as money laundering,insider trading, bribery, embezzlement for self-interest, etc. Directors and employees who engage in improper
conduct are subject to strict punishment/disciplinary action following internal regulations. In addition, SHAM
has set up a monitoring and consultation system, such as a whistleblower system, that allows directors andemployees to anonymously consult or report, and by accepting consultations or reports on compliance issues
such as acts that violate laws and corporate ethics, to minimize problems and prevent risks.

88Internal Reporting System
To prevent compliance risks from happening and minimize the impacts of noncompliance occurred, SHAM

established the system called "Compliance Hotline" (hereinafter referred to as the “Hotline”) which directors

and employees can consult with or report to about compliance issues related to violations of laws, regulations,and corporate ethics. The Hotline accepts and appropriately handles consultation or reporting oforganizational or individual violations of laws and regulations in accordance with the Whistleblower Protection
Act.

The Compliance Officer is selected as the person in charge of the Hotline. The Compliance Officer or theInternal Control Promotion Dept. functions as the contact point while the contact point may be entrusted to an

external party (such as a law office) to protect whistleblowers from being exposed. Reports or consultations are

accepted face-to-face, in writing, by email, telephone, etc. from all directors and employees including contract
employees, part-time employees, temporary employees, and retirees who were employed within one year
before the reported date. Anonymous reporting is also accepted. Once a report is accepted from awhistleblower, a person of the contact point conducts necessary investigations to confirm facts and promptly

notifies the Compliance Officer with summarized details of the incident. If violations of laws or regulations are
revealed as a result of the investigation, SHAM will promptly take corrective measures to prevent the same orsimilar incidents from happening, and carry out internal disciplinary actions to related parties as needed.
The protection of the privacy of whistleblowers and the prohibition of unfavorable treatments from apersonnel, economic, daily life, or mental health standpoint, and other related matters are clearly stated on the“Compliance Hotline Rules”. Even after reports are closed, SHAM continues to confirm that the whistleblowers
are not being harassed but being protected.

Directors and employees of SHAM have the access to the Sekisui House Group Compliance Helpline (hereinafterreferred to as the “Helpline”) established by the Sekisui House Group. The Helpline is for directors andemployees of the Sekisui House Group as well as those of the Group's business partners who have the ongoing
business relationships with the Sekisui House Group, to consult on matters that are difficult to be resolved
through normal reporting channels. A lawyer’s office has been set up as an external contact point, and theCompliance Office in the Legal Department of Sekisui House has been established as an internal contact point.
Anonymous reporting is also accepted.

89Internal Audit System
Based on the concept of corporate ethics standards stipulated in the Sekisui House Group Corporate Ethics

Guidelines, SHAM aims to improve operations and ensure sound management by conducting internal audits ofall departments and their operations, twice a year in principle. Internal audits are conducted by theCompliance Officer and the Internal Control Promotion Department, headed by the Compliance Officer. For the
implementation of internal audits, SHAM will formulate an internal audit plan for each business year based on

the internal audit rules, and then verify whether the business is being carried out appropriately and efficiently
in line with laws, regulations, internal regulations in addition to verifying whether the corporate ethics
standards (including corruption, bribery and fraud) are complied. The results are then reported to theCompliance Committee, President & Representative Director, and the Board of Directors, and a policy is in place
to provide recommendations and instructions for improvement to the relevant organizations and departments
as necessary.

SHAM has also introduced an evaluation system from external perspectives by conducting audits by external
specialist organizations as necessary.

Prevention Measures for Conflict-of-Interest Transactions
SHAM has stipulated the Rules for Transactions with Interested Parties concerning transactions between theInterested Parties of SHAM and SHR as an internal rule to exclude the adverse effect of conflicts of interest. An
overview of Rules for Transactions with Interested Parties is as follows:【Scope of Interested Parties】
From the viewpoint of preventing conflict of interest transactions, the scope of "Interested Parties" in
SHAM has been expanded from the “interested persons, etc.” under the Act on Investment Trusts andInvestment Corporations (Investment Trust Act) as follows.

a. "Interested Parties, etc." as defined in the Investment Trust Act

b. Shareholder of SHAM

c. Special Purpose Companies, etc. for which discretionary investment contracts are concluded by those
stipulated in (a) or (b) aboved. Special Purpose Companies, etc. in which the total amount of the contributions by those outlined in(a) or (b) above is a majority of the total contributions

90

Transaction Terms with Interested Parties
The acquisition price (excluding taxes, cost of acquisition and others) must be no more
Acquisition of property fromInterested Parties

than the amount of the appraisal value, etc. determined by a real estate appraiser who isa non-interested party appointed at the time of the acquisition. (However, in the eventthat a SPC is temporarily formed on the assumption that the property will be transferred
to SHR, the acquisition price must be no more than the amount adding such cost.)

Disposition of property toInterested Parties

Payment of an agency fee toInterested Parties

Entrusting management, etc. ofreal estate and other assets toInterested Parties

Conclusion of leasing contract forreal estate and other assets with
Interested Parties

Placing orders for construction
work, etc. with Interested Parties

The disposition price (excluding taxes, cost of transfer and others) must be no less than
the amount of the appraisal value determined by a real estate appraiser who is a noninterested party appointed at the time of the sale.

The amount of agency fee to be paid must be within the range of remuneration set forth in
the Building Lots and Buildings Transaction Business Act and decided based on the levelof contract terms and the difficulty level of brokerage, etc.

Entrustment of management services, etc. for real estate and other assets must be basedon conditions considered adequate upon comprehensive consideration of market levelsof management consignment fees, the content of services to be provided, total workloads
and so on. (The appropriateness of contractors is verified by independent external

evaluation organizations which have no interest with SHAM once a year, in principle.)
Lease contracts must be based on conditions considered adequate upon investigation ofmarket rent levels and prices of similar transactions in surrounding areas, etc. and byreference to the opinions of third parties, who are non-interested parties, as needed.

If the contract amount exceeds a certain amount, placement of orders with Interested
Parties must be limited to cases in which the estimated price, content of services

provided, etc. are not disadvantageous to SHR upon comparison with third parties.

To ensure that unitholder interests are not impaired due to conflicts of interest between SHR and interested

parties of SHAM (including Sekisui House, etc.), SHR and SHAM have established the governance system that
ensures arms-length principal as follows.

Each decision to be made by Investment Committee and Compliance Committee must be conditional upon
the attendance and affirmative votes of outside members appointed from among professionals who have no
special interest with Sekisui House or other interested parties.

Appointment and dismissal of compliance officers and external committee members requires the approval of
the Board of Directors of SHR, which is supervised by professionals who have no interest in Sekisui House orother interested parties.
The flow of decision-making for transactions with stakeholders is as follows.

91

An Example of Decision Making Flow

(Note) Approval includes consent of SHR on said approval.

Sekisui House Ownership of SHR's Investment Units (Same Boat
Investment)
SHR has accepted same boat investment from Sekisui House to align the interests of the investors and thesponsor Sekisui House.
Click here

to see the number and percentage of units held by Sekisui House.

92

GovernanceRisk Management

Risk Management System
SHAM has stipulated in its Risk Management Regulations the methods of risk management, monitoring thestatus of risk management, and how to respond in the event of unforeseen serious contingencies, etc.

As shown in the cycle below, under the supervision of the directors in charge, each department identifies andassesses the risks facing that department. Each department implements measures according to the risk
management plan formulated based on the results for each business year.

The progress of the efforts is monitored semi-annually at the Risk Management Meeting, which is made up of
all full-time directors and head of department, and improvement instructions and improvement policies are
examined as necessary before reporting to the Compliance Committee and the Board of Directors.

93

Enhancement of Information Security
To minimize the risks of information leakage, operation shutdown caused by cyber attacks, and other risks that

could hinder the continuation of business, the Sekisui House Group strives to strengthen Corporate Governance
System about information security regarding the establishment of the group-wide information security

governance system as a key initiative, based on "Information Security Policy" regarded as Sekisui HouseGroup's Basic Policy and "Confidential Information Management Regulation".
Click here

for the Sekisui House Information Security Policy (Japanese Only).

In preparation for security information incidents such as opening targeted attack emails intended to infect

SHAM's computer servers, mobile devices, etc. SHAM has established Response Procedures and conducts drills
for directors as well as employees to be prepared for such occasions.

In addition, SHAM established "Information Management Regulations", "In-house Information System

Management Manual" and "Mobile Device Operation Manual" as specific guidance for directors and employees,
clearly stating information management in daily operations, the proper way to use mobile devices and what to

do in case of an information security incident. SHAM strictly manages its information assets by ensuring that
employees and directors perform their duties in accordance with these manuals.

Violations by employees or directors of any of the above regulations and manuals, he or she will be punished inaccordance with the employment regulations.

94

Sustainability FinanceGreen FinanceGreen Finance
SHR, which conducts asset management with due consideration given to the environment, society, andgovernance (collectively referred to as “ESG”), aims to contribute to the realization of a sustainable society.

While utilizing the know-how on operation and management of real estate possessed by the sponsor, Sekisui

House, Ltd., SHR promotes such initiatives as energy saving, environmental consideration, and ensuring living
safety and business continuity to enhance the satisfaction of residents and tenants at owned properties.

As part of such initiatives, SHR procures funds through green finance (green bonds and green loans) in order tofurther promote real estate investment management with considerations given to ESG and strengthen its
financial base.

Green Finance Framework
SHR has formulated the Green Finance Framework as follows to implement green finance that conforms to theGreen Bond Principles and other various principles and guidelines.

1.Use of funds

The funds procured through green finance are scheduled to be allotted to funds for the acquisition of existingor new assets which satisfy the following eligibility criteria (“Eligible Green Projects”), funds for the refinancing
of borrowings required for the acquisition of Eligible Green Projects or funds for the redemption of outstanding
investment corporation bonds required for the acquisition of Eligible Green Projects.

2.Eligibility criteria

At the borrowing or payment date of green finance, assets that have acquired or are scheduled to acquire anyof the following evaluations in third-party certifications, shall be designated as Eligible Green Projects.
a. DBJ Green Building Certification: 3 Stars, 4 Stars, 5 Starsb. Certification for CASBEE for Real Estate: B+ Rank, A Rank, S Rank
c. BELS Certification: 3 Stars, 4 Stars, 5 Stars

d. BELS Certification: following assessment of ZEH and ZEB
ⅰ. ZEH-M, Nearly ZEH-M, ZEH-M Ready, ZEH-M Oriented
ⅱ. ZEB, Nearly ZEB, ZEB Ready, ZEB Oriented

95

3.Evaluation and selection process of Eligible Green Projects
Eligible Green Projects will be evaluated and selected by the Sustainability Committee, which is chaired by thepresident & representative director of Sekisui House Asset Management, Ltd., and participated by all full-time
directors, in accordance with its management policy, the Sustainability Policy and eligibility criteria.

4.Management of procured funds
SHR intends to allot the funds procured through green finance towards Eligible Green Projects. As long as thegreen finance balance exists, SHR will manage to ensure that the green finance balance does not exceed the
Eligible Green Liability (Note) .

In addition, SHR will report that the total amount of funds procured through green finance has been fully

allocated to Eligible Green Projects and as long as the green finance balance exists, the allocated funds will be
tracked and managed internally on a portfolio basis.

In the event that all or part of the funds procured through green finance are not immediately allocated to

Eligible Green Projects, SHR will identify unappropriated funds and manage all or part of the funds raised in
cash or cash equivalents until the unappropriated funds are allocated to Eligible Green Projects.

(Note) Eligible Green Liability is calculated by multiplying total acquisition price of Eligible Green Projects by LTV (total asset
basis) as of the end of the latest fiscal period. The same applies hereinafter.

5.Reportinga. Reporting related to the status of allocation of funds

SHR will disclose that the funds procured through green finance has been fully allocated to Eligible Green

Projects according to the Framework and the green finance balance does not exceed the Eligible Green Liability
via SHR’s website. As long as the green finance balance exists, SHR will report the amount of Eligible Green
Liability and the green finance balance as of the end of March every year.

b. Impact reporting

As long as the green financing balance exists, SHR will disclose following environment-related indicators, etc.,
as of the end of March every year via SHR’s website.

ⅰ. The number of Eligible Green Projects and acquired evaluations in third-party certifications
ⅱ. Total floor area of Eligible Green Projects
ⅲ. Eligible Green Liability

ⅳ. The following quantitative indicators for Eligible Green Projects (Note)(ⅰ) Energy consumption(ⅱ) CO₂ emissions(ⅲ) Water consumption(Note) Only properties for which SHR has the energy management authority.

96Third-party evaluation
SHR acquired “Green 1(F)”, the highest rating in “Green Finance Framework Evaluation” from Japan Credit
Rating Agency, Ltd. (JCR) as a third-party evaluation of the Framework.
Click here

for details of the “Green Finance Framework Evaluation”.

The Latest Reporting
Click here
Click here

for Green Finance Reporting.
for Green Bond Reporting.

Green Finance Allocation Status(As of December 21, 2023)
Total Amount（Million yen）
Green Finance

62,950

Green Bonds (Note 1)

23,500

Green Loans (Note 2)

39,450(Note 1) SHR formulated the Green Bond Framework

in 2018, and the third through ninth Investment Corporation Bonds

have been issued in accordance with the Green Bond Framework. In addition, SHR has obtained a third-party opinion
from a third-party opinion from Sustainalytics
Framework.

, an ESG rating agency, for the eligibility of its Green Bond

For details on Green Bonds, please refer to "Investment Corporation Bonds" in the "DATABOOK" posted under"Disclosure Materials" in the IR Library

Click here.

for the Green Bond Assertions issued under the Green Bond Framework.

(Note 2) For details on Green Loans, please refer to "Borrowings" in the "DATABOOK" posted under "Disclosure Materials" in
the IR Library.

97

Sustainability FinancePositive Impact Finance

SHR received a loan under the Positive Impact Finance (“PIF”) scheme from the syndicate of lenders in which
Sumitomo Mitsui Trust Bank, Ltd. (“Sumitomo Mitsui Trust Bank”) acts as an arranger in accordance with the"Principles" for PIF and the model framework of the Principles (Model Framework for financial products forcorporates with unspecified used of funds and the Real Estate Investment Framework) issued by the United
Nations Environment Programme Finance Initiative (“UNEP FI”) .

PIF is a loan intended to continuously support corporations’ activities of which they comprehensively analyze
and evaluate the impacts (both positive and negative) on the environment, society and economy. The mostnotable feature of PIF is that the degree of contribution from corporate activities, products, and services inachieving Sustainable Development Goals (“SDGs”) is used as an evaluation indicator and is monitored basedon publicly disclosed information while supporting such corporate activities through engagement.

SHR has selected the themes among the materiality issues as activities that particularly have an impact on theachievement of SDGs, and received qualitative and quantitative evaluations from Sumitomo Mitsui Trust Bank.

SHR has also obtained a third-party opinion from Japan Credit Rating Agency, Ltd. regarding the compliance ofthe procedures related to this evaluation with the Principles as well as the rationality of the evaluation
indicators.

Loan amount

6,000 million yen

Applicable interest rate

0.665%

Drawdown date

May 31, 2022

Period7 years

Click here

to view details about the PIF and the relevant press release.

98

ESG Library

ESG Report

ESG Report
An ESG report is issued once a year to engage with stakeholders and has readers

understand the efforts made by SHR and SHAM toward realizing a sustainable society.

December 16, 2022 ESG Report 2022

PDF

December 17, 2021 ESG Report 2021

PDF

(

. MB)

December 16, 2020 ESG Report 2020

PDF

(

KB)

(10. MB)

RevisedSekisui House, Ltd. Integrated Report "Value Report 2023 - Our
Engagement"
Sekisui House, Ltd. has released an integrated report, "Value Report 2023 - Our

Engagement", intending to tell the story of our corporate value from business, financial,and non-financial perspectives.
"Value Report" was produced with the primary purpose of helping readers

understand our businesses and initiatives. This report lays out the corporate story of
Sekisui House. It uses the process of determining material issues to help readers

understand the corporate value and significance of the Sekisui House Group, and clearly

expresses the Group's vision for itself through the value creation process. Since,

Sekisui House, Ltd. have published the Value Report, which incorporates the content

formerly published in the Integrated Report and the Sustainability Report. By including abroad array of ESG information, this report is intended to serve as a unified tool for all
stakeholders, including institutional investors and shareholders, that explains Sekisui
House's corporate value from business, financial and non-financial perspectives.

99

ESG Library

ESG Data

Environment
CO₂
Entire Portfolio

Unit

FY 2018

Total CO₂ emission
Scope
Scope

FY

,

t-CO₂

t-CO₂/㎡

FY

,

,

,

,
,

,

,

,

-

-

-

,

,

.

.

.

.

Residence

Unit

Total CO₂ emission

t-CO₂

,

,

,

,

t-CO₂/㎡

.

.

.

.

CO₂ emission
intensity

FY

Office Building

Unit

Total CO₂ emission

t-CO₂

,

t-CO₂/㎡.

CO₂ emission
intensity

FY

FY

FY

FY

FY
,
.

FY

.
FY

,

,

,

.

.

.

Unit

Total CO₂ emission

t-CO₂

,

,

,

,

,

t-CO₂/㎡

.

.

.

.

.

CO₂ emission

FY

FY

Hotel

intensity

FY

,

,

.
FY

FY

,

,

Scope
CO₂ emission
intensity

FY

100

FY

FY

FY

Energy
Entire Portfolio

Unit

FY

FY

Total energy

consumption
Electricity

MWh

Fuel
Energyconsumption
intensity
Residence
Total energy
consumption
Electricity

MWh/㎡
Unit

,

,

,

,

,

,

,

,

,

,

,

,

,

.

Office Building
Total energy
consumption
Electricity

Unit

Energyconsumption
intensity

FY

Hotel

,

,

,

,

,

Total energy
consumption
Electricity

MWh

MWh/㎡

-

,
,
-

.

.

FY

.

FY

FY

,

,

,

,

,

,

,

,

,

,

,

,

,

,

,

.

.

.

.

.

FY

FY

FY

,

Fuel
Energyconsumption
intensity

-

FY

MWh

Unit

FY

,

.

.

FY

,

FY

MWh/㎡

.

,

.

Fuel

.

FY

MWh/㎡

FY

,

FY

Fuel
Energyconsumption
intensity

FY

,

.

MWh

FY

FY

,

FY

,

,

,

,

,

,

,

,

,

,

,

,

,

.

.

.

.

.

101

WasteEntire Portfolio

Unit

FY 20

Total waste

FY,

emission

FY

FY

FY

,

Landfill
Incineration
Recycled

t

Reuse

-

-

Other

-

-

Waste emission
intensity
Office Building

kg/㎡
Unit

.

-

.

FY

-

.

FY

.

FY

.

FY

FY

Total waste
emission
Landfill
Incineration
Recycled

t

Reuse

-

-

Other

-

-

Waste emission
intensity
Hotel

kg/㎡
Unit

.

-

.

FY

-

.

FY

,

FY

.

FY

FY

Total waste
emission
Landfill
Incineration
Recycled

-

-

-

t

Reuse

-

-

-

Other

-

-

-

Waste emission
intensity

-

kg/㎡

.

.
102

.

.

.

WaterEntire Portfolio

Unit

Total water use
Rainwater㎥

City water8

FY 2019

FY 2020

FY 2021

FY 2022780,360

876,419845,551

819,330

866,107

2,509

2,461

1,640

2,416

3,400

777,851

873,958

843,911

816,914862,707

FY

Water use intensity

㎥/㎡

1.743

1.707

1.631

1.561

1.543

Residence

Unit

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022

601,691

638,837

677,399

637,167

689,477

-

-

-

-

-

601,691

638,837

677,399

637,167

689,477

Total water use
Rainwater㎥

City water
Water use intensity

㎥/㎡

1.976

2.004

2.166

2.034

1.954

Office Building

Unit

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022

107,571

152,090

119,520

126,231

126,378

2,509

2,461

1,640

2,416

3,400

105,062

149,629

117,880

123,815

122,978

Total water use
Rainwater㎥

City water
Water use intensity

㎥/㎡

0.925

0.950

0.708

0.721

0.689

Hotel

Unit

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022

71,09885,493

48,63255,93250,253

-

-

-

-

-

71,09885,493

48,63255,93250,253

2.655

2.471

1.325

1.524

1.993

Total water use
Rainwater㎥

City water
Water use intensity

㎥/㎡

103

Renewable Energy
Unit

Renewableenergyconsumption
Generated
Purchased

MWh

FY 2018

FY 2019

FY 2020

FY 2021

FY 2022

11

229

2,031

6,602

20,592

11

1

9

10

9

-

228

2,022

6,592

20,582

Information Related to Calculation of Environmental Performance Data

Scope

Properties held as of the end of March every year for which SHR has energy management authority(excluding properties disposed of during the period and areas for which it is difficult to acquire data because tenants havemanagement authority, among other reasons)

Data Coverage（FY 2022）
CO₂

42.6%

Energy

45.1%

Waste

27.5%

Water

77.2%

(Note) Data coverage is calculated as total floor space of properties subject to data acquisition / total floor space.

Aggregation Period

From April of each year to the end of March of the following year

(For water, the data is aggregated from January of each year to the end of December, from fiscal year

onward.)Reference Guidelines

Ministry of the Environment “Greenhouse gas emission calculation / reporting / publication system”

Ministry of the Environment and Ministry of Economy, Trade and Industry “Basic Guidelines on Accounting for Greenhouse
Gas Emissions throughout the Supply Chain (ver. . )”104

Calculation Standards
Classification

Item

Calculation Method
Scope

CO₂

Amountofemissions

Scope

Scope3

Intensity

Energy

Water

Waste

Renewable
EnergyAmount ofconsumption

Direct greenhouse gas emissions by the business operator itself where theamount of activity (amount of fuel use) in common areas × the emission
factorIndirect emissions associated with the use of electricity, heat, and steam
supplied from other companies where the amount of activity in common
areas (amount of energy purchased) × the emission factor

Note that Scope 2 is calculated on a market basis from FY 2021
Leased assets (downstream) in category 13 where the amount of tenants'
activity (amount of fuel use and amount of energy purchased) in exclusive
area × the emission factor
Note that Scope 3 is calculated separately from FY 2021
CO₂ emissions/total floor area

Amount of fuel use and energy purchased × Energy conversion factor
Note that for city gas, 45 MJ/㎥ applies uniformly, and for others factor
under the reference guidelines apply

Intensity

Energy consumption/total floor area

Amount of usage

Total of rainwater and city water

Intensity
Amount ofemissions
Intensity
Amount of usage

Water usage/total floor area

Total amount of waste excluding valuables
Waste emissions/total floor area

Total amount of renewable energy generated by solar power generation
facilities at owned properties and purchased renewable energy

Third-Party Assurance (Verification Opinion)
In order to increase data reliability, SHR has acquired a third-party assurance for our environmental performance datafrom SGS Japan Inc. with the exception of some data.

Verification Opinion

PDF

105

SocialStatus of Directors and Employees
Unit

FY 20

FY

FY

Total number of directors andemployees
MaleFemaleDirectly hired employees
Male

Persons

FemaleSeconded employees
MaleFemaleNon-Japanese employees
Employment rate of persons withdisabilities

%

.

.

Under
years oldMale

years oldyears
old andoverAgecomposition

Under
years old
FemalePersons

years oldyears
old andover

Percentage of female managers*
Average years of service
Male

Female

%

Years

.

.

.

.

.

.

.

.

.

.

.

.

106

Unit

FY 020FY

FY

Number of newly hired employees
Underyears oldMale-

years oldyears
old and
over

Under

Persons

years old
Female-years oldyears

old andover
Number of employees who resigned

Underyears oldMale

years oldyears

old andover

Persons

Underyears old
Femaleyears oldyears
old andover

Turnover rate
Voluntary turnover rate%

Number of employees taking childcare
leave

Persons

Take-up rate for male childcare leave*%

Number of employees taking familycare leave
Number of short-term workers

.

.

.

.

.

.

(no applicable person)(no applicable person)

Persons

107

Unit

Average monthly work hours perperson*Annual paid leave take-up rate*
Frequency rate of accidents resulting inlost worktime

Frequency rate of occupational illness
in lost worktime

FY

FY

Hours

FY

.

%

.

.

.

.

.

%

.

.

.

%

.

.

.

Number of Qualifications Holders
Unit

As of Jan. 31,

ARES Certified Master
Real Estate Notary
Real Estate AppraiserFirst-Class Certified Architect
Chartered Member of the Securities
Analysts Association of Japan

Certified Building Administrator
MBA
Attorney at-law

Persons

Real Estate Consulting Master
CASBEE Accredited Professional forReal Estate
Licensed Strata Management
Consultant
Licensed Representative ofCondominium Management Company
Labor and Social Security Attorney
Employment Counselor（Note） Includes personnel who have passed the qualifying examination.

108

As of Jan.

,As of Jan.

,

Training Achievements
Unit

Average hours of training per person

Hours

Average costs of training per person

Yen

Annual internal training participation
rate*
Male

FY

FY

FY

.

.

,

.

,

,

%

FemaleNumber of annual external training
courses attended per person*

Times

.

.

.

Training Implementation
Unit

General training

Number oftimes
Participationrate

Human relations
training

Compliance training

ESG training

Tiered training

Number of
times

FY

FY

FY

Times

-

％

-

.

Times

Participation
rate％

Number of
times

Times

Participation
rate％

Number of
times

Times

Participation
rate％

Number of
times

Times

-

-

Participation
rate

％

-

-

.

.

109

Social Contribution Activities"Sekisui House Matching Program" (ajoint donation system for employees
and the company) participation rate*
Cash donation
Time donation

Unit

FY 20

％

.

,

Yen

,

110

FY

.

,
,

Information Related to Calculation of Social Performance Data

Aggregation Period

From February 1 of each year to the end of Januaryof the following year

(For the average monthly work hours per person, the data is aggregated from January 1 of each year to December
the annual paid leave take-up rate, the data is aggregated from Marchof each year to March

the annual internal training participation rate, the data is aggregated from April 1 of each year to Marchyear.). Forof the following year. Forof the following

Calculation Standards
Employment rate of persons
with disabilities

Number of employees with disabilities / employees (excluding seconded
employees; part-time workers are converted to . employees) calculated onJune every year

Average years of service

Years of employee service from the date of hire prior to the merger/Number of
employees (excluding seconded employees)

Number of newly hired
employees,
Number of employees taking
childcare leave,
Number of employees taking

Calculated from February , the first day of the fiscal year of SHAM

family care leave andNumber of short-term workers
Turnover rate
Average monthly work hours
per person

Number of employees who resigned during the fiscal year / number of
employees at the beginning of the fiscal year ×
Average of one year from January each year

Annual paid leave take-up rate

Total paid leave taken / total paid leave granted × 100, during one year fromMarch each year

Annual internal training
participation rate

Number of training participants / number of directors and employees enrolled(excluding employees on maternity or childcare leave and seconded
employees) as of the training date

Number of annual external
training courses attended perpersonTotal number of external training courses attended during the fiscal
year/Number of directors and employees (excluding employees on maternity or
childcare leave and seconded employees) as of the end of the fiscal year

Time donations

Total amount paid to all employees (including seconded employees andexcluding transportation expenses) / number of employees enrolled at the endof the fiscal year / number of business days per year / number of work hours
per day / cumulative hours of social contribution activities

Frequency rate of accidents
resulting in lost worktime

Number of fatalities and injuries due to lost worktime injuries / total working
hours × 1,000,000

Frequency rate of occupation
illness in lost worktime

Number of occupational illnesses / total working hours × 1,000,000

111Third-Party Assurance (Verification Report)
In order to increase data reliability, SHR has acquired a third-party assurance from the Japan Quality Assurance
Organization for the social data (marked *) set as materiality targets.

Verification Report

PDF

GovernanceStatus of Use of Internal Reporting System
Unit

Compliance Hotline

FY

FY

FY

FY

FY

FY

FY

FY

FY

Cases

Status of Legal Compliance
Unit

Number of serious violationsof laws and voluntarystandards

Fines for violations of various
laws and regulations

Cases

Yen

Political Contribution
Unit

Amount of politicalcontribution

Yen

112

ESG Library

External Certification

Status of Acquisition of Green Certifications(As of December 21,

DBJ Green

Certification

Property
No.

Asset Type

Property Name

Building
Certification

R-

Residence

Esty Maison Ginza

★★★

R-

Residence

Esty Maison Azabunagasaka

R-

Residence

Esty Maison Ebisu II

R-

Residence

Esty Maison Kitashinjuku

A RankR-

Residence

Esty Maison Kameido

A RankR-

Residence

Esty Maison Sugamo

A RankR-

Residence

Esty Maison Kyobashi

R-

Residence

Esty Maison Shinagawa Seaside

A RankR-

Residence

Esty Maison Kawasaki II

A RankR-

Residence

Esty Maison Azabujuban

A RankR-

Residence

Esty Maison Hakatahigashi

A RankR-

ResidencePrime Maison Musashinonomori

★★★

R-

ResidencePrime Maison Higashisakura

★★★

R-

ResidencePrime Maison Kayabakoen

★★★

R-

Residence

Esty Maison Itabashi C

113

for CASBEE
for Real Estate

A Rank★★★

★★★

A Rank)DBJ Green

Certification

Property
No.

Asset Type

Property Name

Building
Certification

R-038

Residence

Sha Maison Stage Hakata

★★★

R-040

Residence

Esty Maison Musashikoganei

R-041

ResidencePrime Maison Gokiso

★★★★

R-042

ResidencePrime Maison Yuhigaoka

★★★

R-043

ResidencePrime Maison Kitatanabe

★★★

R-044

Residence

Esty Maison Momochihama

A Rank

R-046

Residence

Esty Maison Sasazuka

A Rank

R-047

ResidencePrime Maison Ginza East

★★★★

R-048

ResidencePrime Maison Takami

★★★★

R-049

ResidencePrime Maison Yadaminami

★★★★

R-050

ResidencePrime Maison Teriha

★★★

R-052

Residence

Esty Maison Sengoku

A Rank

R-053

Residence

Esty Maison Daizawa

A Rank

R-054

Residence

Esty Maison Togoshi

A Rank

R-055

Residence

Esty Maison Nishitemma

★★★

R-056

Residence

Esty Maison Shirokanedai

★★★

R-061

Residence

Esty Maison Nakano

A Rank

R-066

Residence

Esty Maison Oshiage

A Rank

R-067

Residence

Esty Maison Akabane

★★★

R-069

ResidencePrime Maison Waseda

★★★

R-070

ResidencePrime Maison Hatchobori

★★★

R-071

ResidencePrime Maison Jimbocho

★★★

R-072

ResidencePrime Maison Gotenyama East

★★★★

114

for CASBEE
for Real Estate

A RankDBJ Green

Certification

Certification

for Real Estate

Property
No.

Asset Type

Property Name

R-073

Residence

Sha Maison Stage Akihabara

★★

R-076

Residence

Esty Maison Kinshicho Ⅱ

★★★

R-077

Residence

Esty Maison Ojima

★★★

R-078

ResidencePrime Maison Fujimidai

★★★★

R-079

Residence

Esty Maison Tsurumai

R-080

ResidencePrime Maison Morishita

★★★

R-081

ResidencePrime Maison Shinagawa

★★★★

R-082

ResidencePrime Maison Odorikoen

★★★★

R-083

ResidencePrime Maison Minami 2-jo

★★★

R-084

ResidencePrime Maison Kamokamogawa

★★★

R-085

ResidencePrime Maison Central Park

★★★★

R-086

Residence

Sha Maison Stage Yahiro

★★★

R-087

ResidencePrime Maison Ebisu

★★★

R-091

Residence

Sha Maison Stage Hino

★★★

R-092

ResidencePrime Maison Yokohama Nihon-odori

★★★

R-093

Residence

Kobe Women’s Student Housing

★★★★

R-094

ResidencePrime Maison Shibuya

★★★

R-095

ResidencePrime Maison Hatsudai

★★★

R-096

Residence

Esty Maison Uemachidai

R-098

ResidencePrime Maison Shirokane-takanawa

★★★

R-099

Residence

Esty Maison Ichigayayamabushicho

★★★

R-100

Residence

Esty Maison Morishita

★★★

R-101

ResidencePrime Maison Shirokanedai Tower

★★★★

115

Building

for CASBEE

A RankA RankS RankProperty

DBJ Green

Certification

Asset Type

Property Name

Building
Certification

R-102

ResidencePrime Maison Otsuka

★★★

R-103

ResidencePrime Maison Asakusabashi

★★★★

R-104

ResidencePrime Maison Daikanyama

★★★

R-105

ResidencePrime Maison Gotenyama West

★★★★

R-106

Residence

Esty Maison Toyosu Residence

★★★★

R-109

ResidencePrime Maison Mitatsunamachi

★★★★

R-110

ResidencePrime Maison Hongo

★★★★

R-111

ResidencePrime Maison Kuramae

★★★★

R-114

Residence

Sha Maison Stage Hirose-dori

★★★

R-115

Residence

Esty Maison HIGASHIBETSUIN

B+ Rank

R-116

Residence

Esty Maison Kayaba

A Rank

R-118

ResidencePrime Maison Shimokitazawa

★★★★

R-119

ResidencePrime Maison Meguro

★★★★★

R-120

ResidencePrime Maison Ryogoku

★★★

R-121

ResidencePrime Maison Nakameguro

★★★★

R-122

ResidencePrime Maison Itabashi

★★★★

R-123

ResidencePrime Maison EGOTANOMORIS Rank

R-124

ResidencePrime Maison Waseda dori

S Rank

O-001

Office Building

Garden City Shinagawa Gotenyama

S Rank

O-003

Office Building

Hommachi Minami Garden City

S Rank

O-004

Office Building

Hommachi Garden City（Office building
portion）

S Rank

O-005

Office Building

HK Yodoyabashi Garden Avenue

S RankNo.

116

for CASBEE
for Real Estate

DBJ Green

Certification

Certification

for Real Estate

Property
No.

Asset Type

Property Name

O-006

Office Building

Hirokoji Garden Avenue

S Rank

O-007

Office Building

Akasaka Garden City

S RankBuilding

for CASBEE

Status of Acquisitions of Wellness Certifications(As of December 21, 2023)
Property
No.

Asset Type

Property Name

Certification for CASBEE
Wellness Office

O-001

Office Building

Garden City Shinagawa Gotenyama

S Rank117

ESG Library

GRI Standards Content
Index

GRI Standards Content Index
Universal Standards
Disclosure Items

Response

GRI 2 : General Disclosures 2. The organization and its reporting practices
2-1
2-2

Organizational details

Profile of SHR "Overview / History (Overview)"

Entities included in the organization’s

ESG Disclosure Policy and Reporting Frameworksustainability reporting

2-3

Reporting period, frequency and contact pointESG Disclosure Policy and Reporting Framework

2-5

External assurance

ESG Data “Third-Party Assurance (Verification Statement)”. Activities and workers
2-6

Activities, value chain and other business
relationships

Profile of SHR "Structure of SHR"

2-7

Employees

ESG Data “Status of Directors and Employees”. Governance
2-9

Governance structure and composition

Corporate Governance

2-10

Nomination and selection of the highest
governance body

IR Library "Disclosure Materials (Securities Report)" (only inJapanese)

2-11

Chair of the highest governance body

Corporate Governance “Organizational Structure”

2-12

Role of the highest governance body inoverseeing the management of impacts

Sustainability Management “Sustainability Promotion
System”

2-13

Delegation of responsibility for managing
impacts

Sustainability Management “Sustainability Promotion
System”
Measures for Addressing Climate Change “RiskManagement”

118

Disclosure Items

2‑14

2‑15

Response
Sustainability Management “Sustainability Promotion

Role of the highest governance body in

System”

sustainability reporting

Measures for Addressing Climate Change “RiskManagement”

Compliance “Prevention Measures for Conflict-of-Interest
Transactions”

Conflicts of interest

Compliance “Compliance System”
Compliance “Internal Reporting System”

2‑16

Communication of critical concerns

Compliance “Internal Audit System”
Risk Management “Risk Management System”
ESG Data “Status of Use of Internal Reporting System”

2‑18

Evaluation of the performance of the highest
governance body

Corporate Governance “Evaluation of the Effectiveness of
SHR’s Board of Directors and SHAM’s Board of Directors”

2‑19

Remuneration policies

Corporate Governance “Director's Remuneration”

2‑20

Process to determine remuneration

Corporate Governance “Director's Remuneration”

4. Strategy, policies and practices
2‑22Statement on sustainable development
strategy

Message from Senior Management

2‑23

Policy commitments

Sustainability Management “Sustainability Policy”

2‑24

Embedding policy commitments

Sustainability Management “Sustainability Promotion
System”

2‑25

Processes to remediate negative impacts

Compliance “Internal Reporting System”

2‑26

Mechanisms for seeking advice and raisingconcerns

Compliance “Internal Reporting System”

2‑27Compliance with laws and regulations

ESG Data “Status of Legal Compliance”

5. Stakeholder engagement
2‑29

Approach to stakeholder engagement

Stakeholder Engagement

GRI 3: Material Topics 2021
Disclosures on material topics
3‑1

Process to determine material topics

Materiality (Important Issues) “Materiality Identification
Process”

3‑2

List of material topics

Materiality (Important Issues) “Materiality”

3‑3Management of material topics

Materiality (Important Issues) “Materiality”

119Topic Standards
Disclosure Items

Response

GRI 201: Economic Performance 2016

2011

2012

Direct economic value generated anddistributed

Financial implications and other risks andopportunities due to climate change

Cash Distributions

IR Library "Disclosure Materials (Securities
Report)" (only in Japanese)
ESG Data “Social Contribution Activities”
Measures for Addressing Climate Change

GRI 205: Anti-corruption 2016

Economy

2052
2053

Communication and training about anticorruption policies and procedures

Confirmed incidents of corruption and actions
taken

Compliance “Efforts to Prevent Bribery,
Corruption, etc.”
Not Applicable

GRI 206: Anti-competitive Behavior 2016
2061

Legal actions for anti-competitive behavior,anti-trust, and monopoly practices

ESG Data “Status of Legal Compliance”

GRI 207: Tax 2019
2071

IR Library "Disclosure Materials (Securities
Report)" (only in Japanese)

Approach to tax

120

Disclosure Items
GRI: Energy
-

-

GRI

-

ESG Data “Energy”
ESG Data “Energy”

Our Approach to Environmental

Energy intensity

Considerations, Environmental Performance“Environmental Performance Data”
Our Approach to Environmental

Reduction of energy consumption

Considerations, Environmental Performance

Interactions with water as a shared resource

Environmental Performance Data

Water consumption

ESG Data “Water”: Biodiversity-

Environment

Energy consumption within the organization: Water and Effluents-

GRI

Response

Coexistence of Humankind and Nature, andInitiatives for Environmental Resources

Habitats protected or restored

GRI 305: Emissions 2016
3051

Direct (Scope 1) GHG emissions

ESG Data “CO₂”3052

Energy indirect (Scope 2) GHG emissions

ESG Data “CO₂”3053

Other indirect (Scope 3) GHG emissions

ESG Data “CO₂”3054

GHG emissions intensity

ESG Data “CO₂”3055

Reduction of GHG emissions

Our Approach to Environmental
Considerations, Environmental Performance

GRI 306: Waste 2020

3062

Management of significant waste-related
impacts

Our Approach to Environmental
Considerations, Environmental Performance
Coexistence of Humankind and Nature, andInitiatives for Environmental Resources“Appropriate Waste Management”

3063

Waste generated

ESG Data “Waste”

3064

Waste diverted from disposal

ESG Data “Waste”

3065

Waste directed to disposal

ESG Data “Waste”

121Disclosure Items
GRI: Employment-

GRI

Response

New employee hires and employee turnover

ESG Data “Status of Directors and Employees”

Parental leave

ESG Data “Status of Directors and Employees”: Occupational Health and Safety
-

-

40310

Worker participation, consultation, andcommunication on occupational health andCreating Comfortable Workplace Environment

Promotion of worker healthCreating Comfortable Workplace Environment

Work-related injuries

ESG Data “Status of Directors and Employees”

Work-related ill health

ESG Data “Status of Directors and Employees”

safetyGRI 404: Training and Education 2016

Society

4041

Average hours of training per year per
employee

ESG Data “Training Achievements”

4042

Programs for upgrading employee skills andtransition assistance programs

Human Resource Development “Training
System”

4043

Percentage of employees receiving regularperformance and career development reviews

Human Resource Development “Strategy for
Developing Human Resources”

GRI 405: Diversity and Equal Opportunity 2016
4051

Diversity of governance bodies and employees

ESG Data “Status of Directors and Employees”

GRI 406: Non-discrimination 2016
4061

Incidents of discrimination and corrective
actions taken

Not Applicable

GRI 407: Freedom of Association and Collective Bargaining 2016
4071

Operations and suppliers in which the right tofreedom of association and collective
bargaining may be at risk

Not Applicable

GRI 408: Child Labor 2016
4081

Operations and suppliers at significant risk forincidents of child labor

122

Not ApplicableDisclosure Items
GRI: Forced or Compulsory Labor-

GRI

Operations and suppliers at significant risk forincidents of forced or compulsory labor

Not Applicable: Rights of Indigenous Peoples-

GRI

Incidents of violations involving rights ofindigenous peoples

Not Applicable: Public Policy-

Society

Response

GRI

Political contributions

ESG Data “Political Contribution”: Customer Health and Safety-

Incidents of non-compliance concerning thehealth and safety impacts of products andservices

Not Applicable

GRI 417: Marketing and Labeling 2016
4172

Incidents of non-compliance concerning
product and service information and labeling

Not Applicable

4173

Incidents of non-compliance concerningmarketing communications

Not Applicable

GRI 418: Customer Privacy 2016
4181

Substantiated complaints concerning breachesof customer privacy and losses of customer
data

123

Not ApplicableESG Library

SASB Standards Content
Index

SASB Standards Content Index
Sustainability Disclosure Topics & Accounting Metrics
Topic

Accounting Metric

Code

Energy consumption data coverage as apercentage of total floor area, by property
sector(1) Total energy consumed by portfolio areawith data coverage, (2) percentage gridelectricity, and (3) percentage renewable, byproperty sector

EnergyManagement

Like-for-like percentage change in energy
consumption for the portfolio area with data
coverage, by property sector

Percentage of eligible portfolio that (1) has anenergy rating and (2) is certified to ENERGY
STAR, by property sector

Description of how building energy

management considerations are integrated
into property investment analysis andoperational strategy

Water withdrawal data coverage as apercentage of (1) total floor area and (2) floor
Water
Management

area in regions with High or Extremely HighBaseline Water Stress, by property sector(1) Total water withdrawn by portfolio areawith data coverage and (2) percentage inregions with High or Extremely High Baseline
Water Stress, by property sector
124

IF-RE-

130a. .

IF-RE130a.2.

IF-RE-

130a.3.

IF-RE130a.4.

IF-RE-

130a.5.

IF-RE-

140a.1.

IF-RE-

140a.2.

Response, Relevant Content
ESG Data "Information Related to
Calculation of Environmental
Performance Data"
ESG Data "Energy"
ESG Data "Renewable Energy"

ESG Data "Energy"
9.3% (as of December 21, 2023)(Reference) Percentage of thePortfolio with Green Certification
Investing in Real Estate with
Excellent Environmental
Performance
SHR's Sustainability
Materiality (Important Issues)
Stakeholder Engagement
Collaboration with Tenants andProperty Management Companies--

TopicWater

Management

Managementof TenantSustainability
Impacts

ClimateChangeAdaptation

Accounting MetricLike-for-like percentage change in water
withdrawn for portfolio area with data
coverage, by property sector

Code

Response, Relevant Content

IF-RE140a.3.

Materiality (Important Issues)
Coexistence of Humankind andNature, and Initiatives forEnvironmental Resources

Description of water management risks anddiscussion of strategies and practices tomitigate those risks

IF-RE140a.4.

(1) Percentage of new leases that contain acost recovery clause for resource efficiencyrelated capital improvements and (2)associated leased floor area, by property
sector

IF-RE410a.1-

Percentage of tenants that are separately
metered or submetered for (1) grid electricity
consumption and (2) water withdrawals, byproperty sector

IF-RE410a.2-

Discussion of approach to measuring,
incentivizing, and improving sustainability
impacts of tenants

IF-RE410a.3

Collaboration with Tenants andProperty Management Companies

Area of properties located in 100-year floodzones, by property sector

IF-RE450a.1-

Description of climate change risk exposure
analysis, degree of systematic portfolio

IF-RE450a.2

Measures for Addressing Climate
ChangeCode

Response, Relevant Content

exposure, and strategies for mitigating risks"Installation of Water-Saving
Equipment"

Activity Metrics
Activity Metrics

IFRE-

Number of assets, by property sector

000.A

Leasable floor area, by property sector

IFRE.B

Percentage of indirectly managed assets, by property sector

IFRE.C

Average occupancy rate, by property sector

IFRE.D
125

Portfolio "Portfolio Data"

IR Library "Disclosure Materials(DATABOOK)"-

IR Library "Disclosure Materials(DATABOOK)"