ESG Report 2023

ESG Report 2023
We aim to maximize unitholder value andcontribute to our stakeholders by leveraging
a strategic partnership with Mitsui Fudosan.

CONTENTS
Views on ESG
Top Message����������������������������������������� 1
Policy for ESG Initiatives��������������������������������� 2
Sustainability Promotion Structure������������������������� 4
Supported Initiatives, External Evaluation, Etc.���������������� 6

Environmental Initiatives
Climate Change Initiatives ������������������������������� 8
Environmental KPIs������������������������������������ 15
Environmental Performance Results and Initiatives ����������� 18
Initiatives to Obtain Green Building Certification������������� 25

Social Initiatives
Basic Approach Regarding Social Considerations ������������ 28
Initiatives for Employees of the Asset Management Company��� 33

Governance Initiatives
Governance Framework�������������������������������� 44
Internal Control �������������������������������������� 48

ESG Finance Initiatives
Sustainability Finance Framework ������������������������ 53
Sustainability Linked Loan Framework��������������������� 58

Top Message
As society becomes increasingly concerned aboutsustainability, companies are required to take various
actions to resolve issues related to environmental,social, and governance (ESG). Regarding our businessinitiatives for addressing issues related to theenvironment, such as climate change, conserving
water resources, preventing environmental pollution,conserving resources and reducing waste, issues
facing society, such as those related to human rights
and revitalization of communities, and issues related
to governance, such as compliance with laws andregulations and risk management are the main issues.
While we recognize these as medium to long term risk
factors, we also believe that they will lead to improved
corporate value and unitholder value, including the
Mitsui Fudosan Logistics Park Inc.
creation of new value and new business opportunities.
In addition, the spread of COVID-19 has been the, Executive Director
catalyst for a further emphasis on ensuring the healthand safe living of the working people.
In the asset management business as well, it is extremely important to address environmental, social, andgovernance (ESG) issues in all aspects of our operations. We believe that logistics facilities are social
infrastructure, which are the main investment target for Mitsui Fudosan Logistics Park Inc. (“MFLP-REIT”), canespecially contribute to resolving environmental and social issues.
Mitsui Fudosan Co., Ltd., the sponsor of MFLP-REIT, has established a Group Environmental Policy and a Policy
for Social Contribution Initiatives in relation to activities that contribute to society and the environment, in
accordance with its corporate statement of “Bringing aﬄuence and comfort to urban living.”
Mitsui Fudosan Logistics REIT Management Co., Ltd., the asset management company of MFLP-REIT, alsoestablished basic guidelines in the form of its ESG (Environment, Society, Governance) Policy in November 2017,and is forging ahead with ESG initiatives for the reduction of the environmental impact and for its stakeholders
such as local communities and employees through the operation of logistics facilities and so forth.
The objective of this ESG report is to provide a wide range of information to enhance stakeholder understandingof the ESG initiatives taken by MFLP-REIT and the Asset Management Company. Going forward, we willcontribute to achieving a more sustainable society by promoting our ESG initiatives. We ask our unitholders fortheir continued support and unreserved advice.

Hiroshi Asai

1Policy for ESG Initiatives
Mitsui Fudosan Group’s ESG Principles
The Mitsui Fudosan Group is committed to social and economic development as well as global
environmental preservation under the principles of harmony and coexistence, while working to link diverse
values and achieve a sustainable society as represented by its “ ” corporate logo. Under Mitsui FudosanGroup’s “” principle, we recognize the need to create neighborhoods that remain in tune with
global environmental concerns. “”therefore reflects Mitsui Fudosan Group’s aim to help establish asociety that enriches both people and the planet.

Mitsui Fudosan Group’s environmental and social
initiatives
In VISION 2025, Mitsui Fudosan Group’s long-term management vision, Mitsui Fudosan Group’s objective isto achieve a sustainable society and drive continual profit growth by addressing ESG issues based on thephilosophy of the Mitsui Fudosan “ ” logo. As part of these efforts, we will focus on the following six
priority goals.

1. Establish ultra-smart societies by creating neighborhoods
2. Achieve a society where a diverse workforce can thrive
3. Achieve health, safety and security in people’s daily lives
4. Create new industries through open innovation
5. Reduce environmental impact and generate energy
6. Continuously improve compliance and governance2

Sharing of the ESG Principles with Mitsui FudosanGroup
As a member of the Mitsui Fudosan Group, Mitsui Fudosan Logistics REIT Management Co., Ltd. (the “AssetManagement Company”) shares the Mitsui Fudosan Group’s ESG Principles, and while building a highly
energyefficient portfolio centered on MFLP facilities (leading-edge logistics facilities with Mitsui Fudosan
quality), will contribute to our stakeholders in order to achieve a sustainable society.

ESG (Environment, Society, Governance) Policy
The Asset Management Company regards the ESG initiatives as a management issue of utmost importance,and established the “ESG (Environment, Society, Governance) Policy” in November 2017. The AssetManagement Company believes that the ESG initiatives are essential for ensuring the sustainability andlong-term, stable profits of MFLP-REIT, and for contributing to the benefit of all our stakeholders. We are
steadily promoting ESG initiatives, including initiatives through collaboration with Mitsui Fudosan.

3

Sustainability Promotion Structure
Sustainability Promotion Committee andsubcommittees
In order to oversee and promote ESG initiatives undertaken by the Asset Management Company inaccordance with its ESG (Environment, Society, Governance) Policy, a Sustainability Promotion Committee(“the Committee”) has been established with the President & CEO of the Asset Management Company
acting as chairperson who bears ultimate responsibility. This incorporates a secretariat and four
subcommittees to execute the matters deliberated by the Committee. The Committee meetings are held atleast once every three months, and the Committee deliberates and decides on policies, strategies, andsystems related to sustainability considering ESG-related risks and opportunities. Each subcommittee will
formulate and implement specific action plans based on the decisions made by the Committee. In addition,
the subcommittees report on the progress of the action plan to the Committee at least once a year throughthe secretariat.
The secretariat will inform the officers and employees of the activities and share the details with them.

Organizational chart4

ESG-related policies and rules
Relationship chart5

Supported Initiatives,
External Evaluation, Etc.
Initiatives
Support for various environmental initiatives
The Asset Management Company declares its support for the recommendations of the Task Force on
Climate-related Financial Disclosures and is a member of the TCFD Consortium. From FY2022, it has alsodeclared its support for the Japan Climate Initiative, and is working to create a framework for disclosing
financial information related to climate change. Also became a signatory to the Principles for Financial
Action for the 21st Century in March 2023. By acting on the principles, it will undertake its investment
management in a responsible manner for the formation of a sustainable society.

6External evaluation
Participation in GRESB Real Estate Assessment
GRESB

GRESB is an annual benchmarking assessment to measure ESG(Environmental, Social and Governance) integration of real estate companies
and funds, as well as the name of organization which runs the assessment. It
was founded in 2009 by a group of major European pension funds who played
leading roles in launching Principles for Responsible Investment (PRI).TheGRESB Real Estate Assessment is distinguished by its comprehensive
evaluation of sustainability efforts of real estate companies and REITs, etc.,
and not of individual properties.
MFLP-REIT has received the highest “5 Stars” in GRESB Rating, which isbased on GRESB Overall Score and its quintile position relative to global
participants, and has won a “Green Star” designation for the 2-consecutive
year since it is highly evaluated in both areas “Management Component” that
evaluates policies and organizational structure for ESG promotion, and“Performance Component” that assesses environmental performance andtenant engagement of properties owned.
MFLP-REIT also received the highest “A revel” for the GRESB Public
Disclosure, which assess the width of ESG disclosure.

Initiatives for ESG financeIn addition to further promoting ESG initiatives by procuring funds through ESG finance, MFLP-REIT intends
to strengthen the funding base by expanding our sources of funding through approaching the group ofinvestors interested in ESG investment and financing.

7

Climate Change Initiatives
Awareness of climate change
The Paris Agreement adopted in 2015 clearly states a shared global goal of keeping the rise in averagetemperatures from pre-industrial revolution levels to well below 2℃. The Sixth IPCC Assessment Report(Working Group I Report), published in 2021, states that there is no longer any doubt that human activities
have an impact on global warming; that unless significant reductions in greenhouse gas emissions are madeover the next few decades the rise in temperature from pre-industrial revolution levels will exceed 1.5℃ and
2℃ during the 21st century; and that the climate system will undergo changes, including an increase in theintensity and frequency of natural disasters.
In November 2017, the Asset Management Company established the “ESG (Environment, Society,
Governance) Policy” and is promoting ESG responses in order to maintain and improve the corporate value
and the asset value of the properties under management over the medium to long term, and to contribute toall stakeholders. We recognize that addressing climate change is one of the most important issues.

8Endorsement of the TCFD recommendations andparticipation in the TCFD Consortium and JCIIn FY2021, the Asset Management Company endorsed the TCFD recommendations.
Identifying, assessing, and managing the risks and opportunities that climate change poses to MFLP-REITʼsasset management business in line with the TCFD Final Recommendations and enhancing the resilience ofthe business, are essential to ensure the MFLP-REITʼs sustainable and stable earnings over the long term.
We will consider further enhancement of information disclosure in the future.
By endorsing the TCFD recommendations, the Asset Management Company joined the TCFD Consortiumand the Japan Climate Initiative (JCI). Many Japanese companies and organizations that have endorsed the
TCFD recommendations participate in this Consortium, where their approaches to promoting climate-related
disclosure are discussed and shared. JCI, a Japanese domestic network for decarbonization, disseminates
messages toward net zero and aggregates and provides information on climate change. In addition to
exchanging information with other participants through its activities in the TCFD Consortium and JCI, theAsset Management Company proactively disseminates information on its approach to climate-related
disclosure.
In addition, as a member of the Association for Real Estate Securitization, the Asset Management Company
regularly collects information on outstanding efforts by other member companies to reduce environmental
burdens and build a sustainable society, which will be useful for further raising environmental awarenessand expanding such efforts.
* TCFD is an abbreviation for Task Force on Climate-related Financial Disclosures. This organization was established by the
Financial Stability Board at the request of the G20, and provides a framework for climate-related disclosure.

GovernanceIn accordance with the Climate Change Resilience Policy, the Asset Management Company has designatedthe President & CEO as the responsible director for climate-related issues and the Chief Investment Officer
as the responsible executive for climate-related issues.
In accordance with the Climate Change Resilience Policy, the Asset Management Company has designatedthe President & CEO as the responsible director for climate-related issues and the Chief Investment Officer
as the responsible executive for climate-related issues.
The responsible executive regularly reports to the Sustainability Promotion Committee, which includes the
responsible director, on matters related to the identification and evaluation of the impact arising fromclimate change, the management of risks and opportunities, progress of initiatives, and the setting ofindicators and targets.
The Sustainability Promotion Committee deliberates and reviews each agenda item, and decisions are madeby the responsible director.
Climate-related issues are promoted within a supervisory framework centered on the President & CEO, whois the responsible director.
9Strategy
In order to incorporate the uncertainties arising from the progression of climate change into the businessstrategy of the Asset Management Company, we have identiﬁed risks and opportunities, conducted scenario
analyses based on a 1.5-2℃ scenario and a 4℃ scenario, and assessed the ﬁnancial impact of climaterelated risks and opportunities.

Scope of scenario analysis

The scope of the analysis is the asset management business of MFLP-REIT.

Main scenarios referenced
Publishing agency/organization

1.5-2℃ scenario

4℃ scenario

Transition risk

International Energy Agency(IEA)

IEA World Energy
Outlook2020
NZE2050

IEA World Energy
Outlook2020 SPS

Physical risk

Intergovernmental Panel on
Climate Change(IPCC)

Fifth IPCC
Assessment Report
IPCC RCP2.6

Fifth IPCC
Assessment Report
IPCC RCP8.5

10

y g o l o n h c eTnoitatuper/tekraMs e i t i n u t r o p p o / s k s i r n o i t i s n a rT

swal dna seiciloP

4℃ scenario

1.5-2℃ scenario

Related item forproperty
management

Expectedﬁnancial impact

Category

Strengthening ofenergy-saving
standards forproperties held

Increase inrenovation
costs
Fines, etc.
Increase inoperating costs

Risk

Introduction ofcarbon taxes, etc.
Purchase of CO2
emission credits

Increase incosts such ascarbon taxes
Increase in costof purchasing
CO2 emission
credits
Cost increase
throughsecondary costshifting

Risk

Small

MiddleMiddleMiddleIncrease in newtechnology
introduction
cost

Risk

Small

Small

Small

MiddleDecrease inoperating costs
Reduction of
costs throughenergy saving

Opportunity

Small

Small

Small

MiddleEvolution ofrenewable energy
and energy-saving
technologies,
diﬀusion of newtechnologies(Conversion of
portfolio to ZEB)

Changes in tenant
behavior

Change in status
of ﬁnancing

Degree of ﬁnancial impact
Short/
medium
term

Long
term

Short/
medium
term

Long
term

Small

MiddleMiddleLarge

Decrease incompetitivenessof properties
with lowenvironmental
performance

Risk

Small

Small

Small

MiddleIncrease inrental revenues
due to growing
demand forproperties withhighenvironmental
performance

Opportunity

Small

Small

MiddleLarge

Decline inﬁnancing
opportunities
anddeterioration ofﬁnancing
conditions due
to low
evaluation frominvestors andﬁnancial
institutions

Risk

Small

MiddleMiddleMiddle11

Response by the
Asset
Management
Company

Utilization of
Mitsui Fudosanʼsinformation andknow-howIntroduction ofgreen leases
Systematic switch
to LED lighting
Establishment ofgreen energy
procurement
systemAdditional
installation ofsolar power
generationequipment andown consumption,
electricity
consignment

Improved
environmental
performance ofthe portfolio
Obtaining external
evaluations andcertiﬁcations
Establishment ofprocurement
system for green
electricity
Implement tenantsatisfaction
surveys
Promotion ofcooperation withtenants
Improvement of
the environmental
performance ofthe portfolio
Obtaining external
evaluations andcertiﬁcations
Utilize ESG ﬁnance
Expansion of
disclosure of ESGrelated information

4℃ scenario
Related item forproperty
management

etucA
cinorhC

Category

Increasedﬁnancing
opportunities
and improved
ﬁnancing
conditions due
to highevaluation by
investors andﬁnancial
institutions

Degree of ﬁnancial impact
Short/
medium
term

Long
term

Short/
medium
term

Long
term

Opportunity

Small

Small

Small

MiddleOccurrence oflossesIncrease in
expenses ofrepair expenses
and insurance
premiums, etc.
BCP measuresand increased
costs

Risk

Middle

Large

Small

MiddleIncreased
demand forproperties witha high level of
BCP both interms ofhardware andsoftware andincreased rental
revenues

Opportunity

Middle

Large

Small

MiddleFlooding causedby rising sea
levelsIncrease incosts caused bymajorrenovations(construction ofembankments)

Risk

Middle

Large

Small

MiddleIncrease in
extremely hot orextremely cold
days

Increase inoperating costs
and repair costsof airconditioners
due to anincrease in air
conditioning
operating time

Change in status
of ﬁnancing

seitinutroppo/sksir lacisyhP

Expectedﬁnancial impact

1.5-2℃ scenario

Increase in thefrequency andintensity ofnatural disasters(concentrated
torrential rain,
typhoons, ﬂoods,
landslides, etc.)

Risk

Middle

Large

Small

MiddleResponse by the
Asset
Management
Company

Thorough BCP
measures
Implementation ofregular disaster
drills
Implementation ofregular disasterrisk evaluations
andimplementation of
response
measures

Consideration andintroduction ofhigh-eﬃciency air
conditioning
systems

Note that on the time axis, “short term” indicates 1-3 years, “medium term” indicates 4-10 years, and “longterm” indicates a period of over 10 years.
Based on the results of scenario analysis, the Asset Management Company will establish an internal
structure, and examine countermeasures, and incorporate such measures into business strategies, while
formulating, implementing, and monitoring them repeatedly and continuously, aiming to enhance corporate
value and heighten business resilience. Speciﬁc initiatives are presented on Environmental Performance
Results and Initiatives.
12

Risk management
In order to mitigate climate-related risks and take advantage of opportunities, the Asset Management
Company identifies, evaluates, and manages climate-related risks and opportunities based on the following
framework.

Process for identifying and evaluating climate-related risks and opportunities

Once a year, the responsible executive invites those who are essential to a climate-related working group,
and identifies and evaluates climate-related risks for the Asset Management Company. Climate-related risks
in this analysis are based on the following framework.

(1) Transition risk: impact on the business of the low-carbon/decarbonizationtransition of society and the economy(a) Policy, law and regulation risk: risk of strengthened regulations caused by policy-driven promotion of decarbonization(b) Technology risk: risk arising from the development of new technology, and its adoption by the mainstream, related to lowcarbon/decarbonization(c) Market risk: risks associated with markets, such as volatility in energy prices and fluctuations in demand for services(d) Reputation risk: risk of negative changes in reputation among stakeholders such as customers, the general public, employees,
and investors(2) Physical risk: impact on the business arising from the progression of climatechange, resulting in variations from previous weather patterns and climatic
phenomena(e) Acute physical risk: risks originating in events such as typhoons and flooding(f) Chronic physical risk: risks originating in long-term shifts in weather patterns, such as high or low temperatures sustained
over long periods

In addition, in cases where themes and elements that could provide business opportunities to the AssetManagement Company and MFLP-REIT are identified during the process of uncovering risks, these are
identified as climate-related opportunities in a separate category from risks, and their feasibility isinvestigated.
The responsible executive provides regular reports to the Sustainability Promotion Committee on the
progress and outcomes of work to uncover risks and opportunities performed by the working group.

13

Process for managing climate-related risks and opportunities

For important climate-related risk and opportunity factors that the Asset Management Company has
determined should be addressed as a priority based on the above process, a management process is set out
as follows, with the aim of mitigating risks and taking advantage of opportunities.
For high-priority climate-related risks and opportunities that have been deliberated by the Sustainability
Promotion Committee and that are important in the context of business and financial plans, theresponsible director designates a team in charge of addressing the issue, and instructs them to draft
appropriate measures.
The measures drafted by the team in charge of addressing the issue will be deliberated by the
Sustainability Promotion Committee as necessary, and the details will be finalized in accordance with theappropriate rules governing administrative authority.
The responsible director gives instructions for climate-related risks that are important in the context ofbusiness and financial plans to be taken into account by the existing company-wide risk management
program with the aim of integrating risk identification, evaluation and management processes.

Indicators and targets
The Asset Management Company works to establish environmental KPIs, and to set and monitor indicatorsand targets, with the objective of mitigating climate-related risks and taking advantage of climate-related
opportunities. The state of progress for each initiative is summarized at least once a year by the responsible
executive, who presents a report to the Sustainability Promotion Committee.
The environmental KPIs that are currently established by the Asset Management Company, together withhistorical data, are shown on Environmental KPIs, Environmental Performance Results and Initiatives, andInitiatives to Obtain Green Building Certification.
The Asset Management Company will continue to consider and disclose any new environmental KPIs that
seemappropriate to set.

14

Environmental KPIs
Reflecting the basic approach to environmental awareness set out in the ESG (Environment, Society,
Governance) Policy, we set environmental KPIs in FY2021.

* CO2 emissions intensity, water use intensity, and recycling rate are excluded industrial realestate, due to confidentiality agreements etc., pertaining to data centers (industrial real estate).

15

Approach to setting numerical targets for CO2
emissions intensity
CO2 emissions originating in the business activities of tenants within
the buildings account for approximately 85% of the CO2 emissions in
MFLP-REITʼs portfolio as a whole in 2020.
MFLP-REIT aims to reduce not only the portion of CO2 emitted inownermanaged portion (Scope 1 and 2) but also in the tenant-managed
portion (Scope 3), aiming for reducing total CO2 emissions for thewhole building.
Going forward, it is conceivable that CO2 emissions from tenantbusiness activities could increase due to additional installation of air
conditioning systems to improve working environments and theintroduction of automation equipment. However, to realize CO2
emissions reductions across the portfolio, it is essential to take various
measures in cooperation with tenants, and MFLP-REIT will makearrangements for tenants to be able to stably procure green electricity.

16How CO2 emissions intensity can be reduced

Means of reduction

Various energy-saving measures
Installation of additional photovoltaic generation facilities and private
consumption and consignment of electricity
Purchase of green electricity (owner and tenant)..., etc.

*1 For the base year 2016, a whole year’s actual performance figures of properties acquired through the IPO are set to 100.
*2 Gross floor area in 2030 is expected to be double that at the end of fiscal 2020.
*3 It is assumed that the business-as-usual scenarios for intensity levels in 2030 will have roughly the same conditions as
in 2020.
*4 “Various energy-saving measures” means reductions from the shift to LED lighting, controlled illumination, upgrades to
air conditioning systems, and other operational improvements.
*5 “Post-FIT solar power” means the reduction that would be achieved if all currently sold renewable energy generated bysolar power generation were consumed in-house.
*6 The reductions shown above do not incorporate an increase in electricity consumption driven by the installment of new
air-conditioning systems and introduction of automated facilities at the request of tenants.
17

Environmental Performance
Results and Initiatives
Environmental performance results
Within the environmental performance results, items marked with an asterisk (*) are those that underwent
independent assurance by Deloitte Tohmatsu Sustainability Co., Ltd. for 2021 and 2022 Results. 2021 2022

Energy consumption (whole buildings)
Item

2016
(Base year)

2021

2022

Total energy consumption (thousand
kWh)14,80654,560*59,559*Fuel consumption (thousand
kWh)

0

345

318

Electricity consumption(thousand kWh)

14,80554,21558,883(Ref.)Non-fossil certiﬁcate
purchases (thousand kWh)

-

-

3,193

Renewable energy selfconsumption (thousand kWh)

-

-

358

33.3

36.2

35.8

Energy intensity (kWh/m2)

18

CO2 emissions
Item

2016
(Base year)

CO2 emissions (t-CO2)
CO2 emissions intensity (t-CO2/m2)
total

2021

2022

7,581

23,720*21,848*

0.017

0.016

0.013

Scope 1 emissions (t-CO2)

1

16

15

Scope 2 emissions (t-CO2)

1,638

3,799

3,374

Scope 2 Non-fossil certiﬁcate(t-CO2)

-

-

1,235

Scopes 1 and 2 emissions
intensity (t-CO2/m2)

0.060

0.048

0.025

Scope 3 emissions (t-CO2)

5,944

19,905

19,694

Scope 3 emissions intensity(t-CO2/m2)

0.014

0.014

0.013

Owner-managed portion

Tenant-managed portion

Water consumption
Item

2016
(Base year)

2021

2022

Charges for water used from water
source（㎥）22,966

98,384*

101,346*

Water intensity（㎥／㎡）

0.07

0.07

0.06

19

WasteItem

2016(Base year)

Waste emissions weight (t)

2021

2022

―

14,187

17,231

General waste emissions (t)

―

83

98

Industrial waste emissions (t)

―

16*

13*

General waste emissions (t)―12,755

14,525

Industrial waste emissions (t)

―

1,333

2,595

―

70.1

68.0

Owner-managed portion

Tenant-managed portion

Recycling rate (%)*1 The data in the table above were collected during the periods below. Please note that the data for 2016 is aggregatedonly from the multi-tenant type facilities of GLP-MFLP Ichikawa Shiohama, MFLP Kuki, MFLP Yokohama Daikoku, MFLP
Yashio, and MFLP Sakai.
2016: from August 1, 2016 to July 31, 2017
2021: from January 1, 2021 to December 31, 2021
2022: from January 1, 2022 to December 31, 2022
*2 Intensity is the figure representing the consumption volume, etc. as the numerator with the total gross floor area of theproperties owned (excluding MFIP) for which data for the relevant period is known as the denominator, with theconsumption volume adjusted for months of operation (data covering less than 12 months is adjusted to represent 12
months of operation).
*3 After close examination of the date, the figure of "CO2 emissions" for 2021 have been reviewed and retroactively
adjusted.

20

Introduction of green leases
MFLP-REIT is gradually introducing green leases across the whole of its portfolio. A green lease is a lease inwhich both owner and tenant promote environmental consideration through a building lease agreement.
With the permission of tenants, we are converting lighting in tenant-managed areas to LED lighting, with theaim of both saving energy for the property as a whole and reducing running costs

28.3％

Green leases as percentage of total (as of February 1, 2023)

Properties that apply green leases (non-exhaustive)

Introduction of LED lighting

Introduction of solar power panels
Solar power panels

LED lighting

Some of the logistics
facilities owned by MFLPREIT have solar power
panels installed togenerate renewableenergy.

With the aim of raising theasset value of our portfolio
by addressing
environmental issues, aswell as responding totenant needs, we aremoving forward with theintroduction of LED
lighting (exclusive-use andcommon-use areas).

Solar power panel annual power generation(Actual, 2022)

LED installed as percentage of total (as ofFebruary 1, 2023)
Whole building

Common areas(excluding buildings
leased as a whole)

85.0％

97.5％

* Figures are calculated based on the gross ﬂoor area,
considering the quasi co-ownership interests in each
property.

18.9GWh（12 properties）* For the properties owned by MFLP-REIT, the value statedis the power generated during January 1, 2021 to
December 31, 2022 from the 12 properties with solar
panels installed. Note that this value is the total power
generated from the entire properties and does not take
into consideration MFLP-REITʼs ownership ratio of theproperties.
21

Reuse and recycle of water
Certain logistics facilities owned by MFLP-REIT are equipped with facilities to reuse well water, and we areworking to reduce the amount consumed from water sources.

Collaboration programs with tenants
The Mitsui Fudosan Group collaborates with tenants on
a variety of initiatives to reduce environmental impacts.
Speciﬁcally, we are actively working to gain
cooperation from tenants by putting up 3Rs (“reduce,reuse, recycle”) posters to encourage the sorting of
garbage, distributing a Sustainability Guide and so on.

Putting up 3R posters

Sustainability Guide

Environmental initiatives in collaboration with the
Mitsui Fudosan GroupBy utilizing the strategic partnership with Mitsui Fudosan to prioritize the incorporation into our portfolio of
properties with outstanding environmental performance developed by Mitsui Fudosan itself, we will reduce
the environmental impact of the portfolio and mitigate environmental risks.
In addition, MFLP-REIT has outsourced logistics management operations of logistics facilities and industrial
properties owned by MFLP-REIT to Mitsui Fudosan, and is eﬃciently promoting environmentally friendly
initiatives by leveraging the comprehensive capabilities of the Mitsui Fudosan Group. With regard to various
new environmentally friendly initiatives, MFLP-REIT is in discussions with Mitsui Fudosan.

Environmental management system / PDCA cycle
The Asset Management Company established its own environmental management system (EMS) and
implements a PDCA cycle in accordance with the aforementioned structure and governance in order tomanage the environmental load of its entire portfolio, such as energy consumption, CO2 emissions, water
consumption, and waste generation, and achieve its targets.

22Understanding and reducing environmental risks
in investment decisions and monitoring
Regarding due diligence for new investments, MFLP-REIT obtains an understanding of environmental andsocial risks by utilizing external experts and uses this information in its investment decisions. With regard
to environmental risks in particular, before an investment decision is made, surveys are carried out as partof the engineering report for soil contamination risks, and to establish whether or not hazardous
substances (such as asbestos and PCBs) have been used. Periodic monitoring of environmental and social
risks is conducted for properties held as well and initiatives that provide opportunities for reducing risks
and increasing property value are carried out, e.g., expert building assessments such as “Energy Eﬃciency
Walkthroughs.”

Utilization of an external consultant
MFLP-REIT utilizes the support of Nikken Sekkei Construction Management, Inc. as an expert consultant
for suggestions for the portfolioʼs energy management and measures that contribute to increasing
environmental performance.

23

Soil contamination countermeasures
MFLP-REIT has built a strategic partnership with its sponsor, Mitsui Fudosan, and its acquisitions are
centered on properties developed by Mitsui Fudosan. When conducting due diligence at the time we
acquire a property, we conﬁrm that soil contamination surveys are conducted and check whether
appropriate countermeasures have been implemented at those properties for which they were deemednecessary.
The logistics facilities that are the main target for investments by MFLP-REIT are sometimes located onbrownﬁeld land where there is a risk of soil contamination, such as the sites of former factories, and soil
contamination countermeasures may be required.
In cases where they have been left unused as sites of former factories, there may be soil contaminationand other issues that can prevent the potential value of the real estate from being realized. Soilcontamination countermeasures executed as part of new development lead to soil contamination no longer
being left untreated, thus contributing not only to the property but also to the surrounding environment.

Strategic partnership with Mitsui Fudosan

24Initiatives to Obtain
Green Building Certiﬁcation
Policy for acquiring Green Building certiﬁcation
MFLP-REIT sets the targets as described on Environmental KPIs with the aim of acquiring Green Building
certification for its entire portfolio for the purpose of reducing the environmental risks of its portfolio andincreasing asset value over the medium to long term.
MFLP-REIT has been actively working to acquire Green Building certification, including ZEB certification. As
of February 1, 2023, the proportion of logistics facilities that have acquired Green Building certification was
96.4%, and the equivalent figure for portfolio as a whole was 92.8%.

DBJ Green Building Certification
DBJ Green Building Certification aims to encourage the spread of real estate(“green buildings”) that takes into account environmental performance and disaster
preparedness, as well as the societal needs of various stakeholders, including local
communities. This is assessed using a proprietary scoring model developed by
Development Bank of Japan Inc., resulting in selected properties that address theneeds of the times being given a ranking of 1 to 5 on a 5-star scale.

CASBEE certiﬁcation for Real Estate
CASBEE (Comprehensive Assessment System for Built Environment Eﬃciency) is acomprehensive system, created under the leadership of the Ministry of Land,
Infrastructure, Transport and Tourism, for evaluating the quality of buildings. In
addition to the original goals of reduced energy consumption and the use ofbuilding materials with low environmental impacts, it also takes into account the
comfort of the interior and the landscape.

25

The CASBEE certiﬁcation awarded by the Institute for Building Environment andEnergy Conservation and its designated certiﬁcation bodies consists of four
evaluation tools: CASBEE for Pre-Design, CASBEE for New Construction, CASBEE
for Existing Building, and CASBEE for Renovation. These are used to provide anevaluation on a ﬁve-grade scale: Superior (S), Very Good (A), Good (B+), Slightly
Poor (B-) and Poor (C). CASBEE certiﬁcation for real estate for buildings whose
construction was completed at least one year ago consists of an evaluation on afour-grade scale (S, A, B+, or B), which is in turn based on an assessment spanningﬁve diﬀerent categories: energy/greenhouse gases, water, materials,
biodiversity/sustainable site, and indoor environment.

BELS certiﬁcation
BELS is a third-party evaluation system that displays the energy-saving
performance of buildings. From April 2016, real estate companies and other entities
are required to make eﬀorts to display the energy-saving performance of buildings
based on the Act on the Improvement of Energy Consumption Performance of
Buildings (“Building Energy Eﬃciency Act”). The speciﬁc method of display is set
out in the energy conservation performance display guidelines for buildingsprescribed by the Ministry of Land, Infrastructure, Transport and Tourism, and BELS
is assessed based on these guidelines and rated on a 5-star scale.

ZEB certiﬁcation
ZEB (Net Zero Energy Building) is a building that aims to achieve a zero energybalance through substantial reductions in annual primary energy consumption. Thisis achieved by saving as much energy as possible via better thermal insulation of
the building and highly energy eﬃcient equipment, etc., coupled with creatingenergy by solar power generation or other energy generating methods, while
maintaining a comfortable environment. In the BELS certiﬁcation system, thecertiﬁcation of the level of ZEB is presented in four stages: “ZEB,” “Nearly ZEB,”“ZEB Ready,” and “ZEB Oriented.”

Certiﬁcation acquisition status for portfolio
properties (as of February 1, 2023)
Green Building
certiﬁcation acquiredin logistics facilities

96.4%

Green Building
certiﬁcation acquired for
portfolio as a whole

92.8%
26

ZEB certiﬁcationacquired inlogistics facilities

59.0%

Property name

DBJ Green
Building
Certiﬁcation

GLP/MFLP Ichikawa Shiohama
MFLP Kuki
MFLP Yokohama Daikoku

★★

BELS

ZEB

Construction)

certiﬁcation

certiﬁcation

Rank A *1

Rank S *1★★★★

ZEB Ready

Rank A *1★★★★ *ZEB Ready★★★★

ZEB Ready★★★★

ZEB Ready★★★★

ZEB Ready

Rank A *2

MFLP Kashiwa

Rank A *1★★★★

Rank S *1

MFLP Komaki

Rank A *2★★★

MFLP Hiratsuka
MFLP Inazawa★★★★

Rank A *1

Rank A *1

MFLP Hino★★★
Rank A *2

MFLP Funabashi Nishiura

MFLP Sakai

CASBEE(Real
Estate)★★★★

MFLP Yashio
MFLP Atsugi

CASBEE(New

Rank A *2★★★

Rank A *1

MFLP AtsugiⅡ

Rank A *2
Rank A *2

MFLP FukuokaⅠ

Rank A *1

MFLP Prologis Park Kawagoe★★★

Rank A *1★★★★

MFLP HiroshimaⅠ★★★

Rank A *2★★★★

ZEB Ready

MFLP Ibaraki★★★

Rank A *2★★★★

ZEB Ready

MFLP KawaguchiⅠ★★★

Rank S *2★★★★

ZEB Ready★★★★

Nearly ZEB

119

MFLP Yachiyo Katsutadai
MFLP OsakaⅠ

Rank A *2

MFLP HiratsukaⅡ

Rank A *2

MFLP Osaka Katano
Total certiﬁcations acquired

Rank A
10

10

12*1 The certiﬁcation period has expired.
*2 This is an evaluation based on the local government notiﬁcation system.
*3 In addition to the above green building certiﬁcations, MFLP Sakai also won the FY2015 Osaka Environmentally Friendly Architecture Award(Retail and other facilities category).

27

Basic Approach Regarding Social
Considerations
Stakeholders of MFLP-REIT
MFLP-REIT and the Asset Management Company intend to actively fulfill our roles and responsibilities andmake contributions through their business activities, etc. to all stakeholders, including not only investors but
also tenants, LM and business partners, local communities, and employees of the Asset Management
Company. For example, MFLPREIT’s portfolio is geographically diversified, and contributes both to regional
job creation and to the vitalization of local communities. In addition, all properties in MFLP-REIT’s portfolio
offer convenience commuting using public transport (train stations, bus stops, etc.) and are also accessible
to people with disabilities.

Responsibilities of MFLP-REIT and the Asset Management Company
to key stakeholders
Investors: Distribution of stable profit, maximization of the interests of unitholders in the medium to longterm, and timely and appropriate disclosure of information
Tenants: Provision of safe, secure and functional spaces in buildings in collaboration with LM, andincrease of business continuity and employee satisfaction
LM and business partners: Provision of a safe, secure, and comfortable work environment
Local communities: Contribution to local vitalization and development, and support during emergencies
Employees of the Asset Management Company: Provision of a safe, secure, and comfortable work
environment, and opportunities for capability development28

tnemnorivne kro w elbatrofmoc gnidivorP

Examples of speciﬁc initiatives
Unmanned store

Commuter shuttle bus

Bicycle sharing

To meet the needs of facility
We provide shuttle buses to
To enhance the convenience ofusers, an unmanned concession support the commuting of tenant transportation for tenant
stand is available 24 hours a day, employees. It also contributes to employees, we oﬀer a bicycle
7 days a week.
ease crowding in local public
sharing scheme.
transport.

Sky lounge

Sky deck

ICT LABO 2.0

To provide a comfortable work
environment for tenant
employees, we provide a fullrange of spaces for food andrest.

To provide a comfortable work
environment for tenant
employees, we provide resting
places with extensive outside
views.

We provide expert solutions in
automation and labor-saving
measures to prospective MFLP
tenants, such as logistics
companies.

Seasonal decorations

CS survey

LaLaport discount tickets

To provide a comfortable work In order to achieve better
environment for tenant
operation of facilities, we also
employees, seasonal decorations conduct regular satisfaction
have been introduced.
surveys of tenant employees.

Various preferential privileges
are oﬀered to tenant employees,
including discounts at a variety
of stores in Mitsui
Fudosanmanaged shopping
centers.

Issuance of seasonal magazine

LoungeCafeteria

We publish a quarterly magazine To provide a comfortable work Spaces are also provided toto provide tenants with timely environment for tenant
enable truck drivers using a
information.
employees, the cafeteria within a facility to rest.
facility oﬀers a diverse food
menu.
29

sevitaitini PCB

Adoption of seismic isolation

Emergency power generator

We adopted seismic isolation The facilities are equipped withtechnology to not only ensure the emergency power generators
safety of users in the event of a that can operate for up to 72
large-scale earthquake, but also hours for BCP response,
mitigate the impact on goods
including ensuring safety in thestored.
facility in the event of a power
outage.

Stockpiles for disaster prevention

Remote monitoring using ITV

The facilities are equipped with asystem that, in the event of anatural disaster, enables thestate of damage suﬀered both
inside and outside a facility to bechecked in real time.

Measures based on hazard maps
（as of February 1, 2023）

We have prepared for
59% of the entire portfolio is located inemergencies by stocking a wide areas that are not considered likely torange of necessary items, such suﬀer from ﬂooding, and ﬂood-control
as drinking water and emergency measures have been taken for the
food rations for those having
remaining 41%, including measures fordiﬃculty returning home in the raising the height of voltage substations,
event of a disaster.
emergency power generators and othercritical equipment.
Note1: MFLP and each portfolio asset may not be equipped with some of the above standard speciﬁcations or features.
Note2: Calculations based on total ﬂoor area not adjusted to reﬂect quasi co-ownership interests.

30

seitinummoc lacol ot esnopseR

Cleanup activities near facilities

Child care facilities on-site

Creation of community space

We conduct cleanup activities in
the areas surrounding facilities
to contribute to achieve a better
local environment.

We provide a child care facility
on-site for child-rearing support
not only for tenant employees,
but also people nearby thefacility.

By establishing public areas withgreen spaces, cherry trees, etc.,
we provide places for local
residents to relax.

Emergency temporary toilets

Bench that can be converted tocooking grill

Designated as a tsunami
evacuation building

By setting up facilities that can By setting up benches that canbe used as toilets in the event of be used as a stove in the eventa disaster, we provide support for of a disaster, we provide support
for residents of the surrounding
residents of the surrounding
neighborhoods in the form ofneighborhoods in the form of
infrastructure for daily life.
infrastructure for daily life.

We support local residents living
near the facilities in the event of
a disaster by securing
designations as disasterevacuation sites frommunicipalities.

Introduction of green curtains

Planted area

Facility tour for social studies

We mitigate any sense of
We provide tours of the facility to We work to create harmony with
oppression by establishing green students from the local area as the surrounding environment bycurtains on slope areas, for local part of their social studies class. establishing a planted belt, forresidents and the landscape they
local residents and thesee.
landscape they see.
Note: MFLP and each portfolio asset may not be equipped with some of the above standard speciﬁcations or features.

31

sevitaitini noitubirtnoc laicoS
evitaitini noitomorp IED

Local contribution activities

Donation of Calendars

We actively engage ininitiatives to promote local
contribution andenvironmental awarenessamong employees byparticipating in community
cleanup activities.

We are contributing to ecology
and social contribution by
donating a portion of thecalendars received fromsuppliers to the Council ofSocial Welfare.

Cooperation with support group for the disabilities

Catering food truck

Catering food truck (typicallunchtime scene)

International Women's Day
Eventcontribute to the realization
At MFLP Kawaguchi I, we held a catering food truck event in Toofgenderequality, MFLP
cooperation with a support group for people with disabilities. This offered mimosa
gifts towas implemented on a monthly basis between April 2022 and tenant employeesflower
on
March 2023, and involved the sale to tenant employees of curry International Women'sDay.
which was made at locations where people with disabilities work,and the equivalent to 450 meals were sold in total. In
collaboration with the same organization, works of art created bypeople with disabilities were given their debut in society, and an
exhibition of art for sale was also held.

32

Initiatives for Employees of the AssetManagement Company
Initiatives for human rights
The Asset Management Company has established a human rights policy based on the Mitsui Fudosan Group
Human Rights Policy and the Mitsui Fudosan Group Sustainable Procurement Standards of Mitsui Fudosan.
MFLP-REIT and the Asset Management Company support and respect international norms regarding humanrights, such as the core labor standards set out in the ILO Declaration on Fundamental Principles and Rights
at Work (freedom of association, recognition of the right to collective bargaining, elimination of forced labor,
abolition of child labor, and elimination of discrimination) in light of the Universal Declaration of Human
Rights and the International Bill of Human Rights. In addition, the Sustainable Procurement Policy
established by the Asset Management Company incorporates respect for human rights into the selection andevaluation standards used to choose the content of work and business partners for the portfolio value chain.
Based on the above, the Asset Management Company has defined the initiatives for respect of human rights
in the Compliance Manual as described in the table below and is working to instill its policy on respecting
human rights in all employees.
Details

Policy and initiatives

Prohibition of discriminationand harassment

The Asset Management Company shall prohibit discrimination or
unfair treatment based on nationality, social status, race, belief,
gender, age, disability, sexual orientation, gender identity,
education, marriage status, employment type or any other reason
not related to business roles. In addition, no harassment in any
form is allowed in the workplace.

Policy to prevent child labor orforced labor

The Asset Management Company shall not permit child labor orforced labor. The Asset Management Company has never usedchild or forced labor. To ensure that none is used in the future, theAsset Management Company complies thoroughly with the laws
and regulations of each country.

33

Details

Freedom of association and theright to collective bargaining

Policy and initiatives
The Asset Management Company shall support and respect the
freedom of association and the right to collective bargaining.
Up to the present, no labor unions have been formed, but labormanagement relations at the Asset Management Company havebeen harmonious, and there have been no large-scale mergers,
acquisitions, or layoffs in the past.
In addition, the Asset Management Company has entered into alabormanagement agreement on overtime work (36 Agreement)with its employees, and is striving to maintain the health of its
employees and improve labor productivity by appropriately
managing working hours.
The Asset Management Company is making the following efforts to
reduce excessive working hours and overtime.
Monitoring working hours
Periodic interviews with supervisor
Notifying both employees and their direct supervisors when
they are in danger of overwork
Implementing stress checks

The Asset Management Company conducts labor management
while abiding by the labor laws and regulations. In terms of wages,
the Asset Management Company has adopted a basic policy offollowing the rules on minimum wages.
There were no serious violations of labor-related laws and regulations during the period from April 1, 2022 toMarch 31, 2023.
Policy supporting rights to aminimum wage and living wage

DEI(Diversity,Equity and Inclusion) of the AssetManagement Company

The Asset Management Company will strive to build an organization that recognizes diversity,equity andinclusion.
Speciﬁcally, in accordance with the management philosophy of the Mitsui Fudosan Group of “coexist inharmony with society and achieve a sustainable society,” in response to the dramatically changing needs ofsociety, we are working to realize new value creation based on work style reforms, with the management
ranks overseeing the diversity of employees, working to build an organization in which human resources ofdiverse values, talents, and lifestyles can realize their full individual potential and comfortable workplace.
Based on the above, the Asset Management Company has deﬁned the "DEI Promotion Policy". Under thispolicy, the Asset Management Company has set KPIs of "Rate of employees taking 10 or more days of paidvacation" and " Rate of employee participation in training on DEI" at 100%, and will strive to promote DEI
initiatives within the Asset Management Company.
34

Item

FY2020

FY2021

FY2022

KPI

Total number of officers and employees（Note 1）

24

25

24

-

(Number of seconded employees
accepted)

10

10

10

-

(Number of direct employees)

14

15

14

-

Male: 7,
Female: 7

Male: 8,
Female: 7

Male: 8,
Female: 6-

Percentage of female employees *

50%

47％

43％

-

Average employment period *（Note 2）

2.2 years

3.0 years

3.6 years-

Rate of used portion of paid vacation *（Note 3）

56%

75％

89％

-

Rate of employees taking 10 or moredays of paid vacation *（Note 3）

44%

86%

100%

100%

Rate of health checks received

100%

100%

100%

-

Employment of people with disabilities

0

0

0

-

Number of new hires *

5

1

2

-

Number of retired employees *

0

1

2

-

Employee turnover rate in the fiscal
year *

0%

7%

14%

-

Rate of employees participation intraining on DEI

100%

100%

100%

100%

（Note 1） Indication of “officers and employees” means the total officers and employees including direct employees andseconded employees mentioned above.
An asterisk (*) indicates data for direct employees, including contract employees.
（Note 2） The average employment period is the average of figures calculated by dividing the total number of days
enrolled as an employee up to each day by 365, as the number of days in one year.
（Note 3） Calculated using data on enrolled employees as of the fiscal year-end, but excluding those mid-career hires whojoined during the fiscal year.

[Examples of initiatives]
Training by viewing a DVD that promotes understanding of human rights and diversity (promoting active
participation of women, employment of senior employees, training on LGBT issues)
Training on DEI
35

Initiatives for human resource development

The Asset Management Company is taking steps to secure and develop specialists with high-level expertisein real estate ﬁnance and potential leaders who have the management ability to increase the productivity ofthe organization. Furthermore, it aims to develop human resources who will contribute to society and toincreasing corporate earnings, aiming not only to build knowledge, comprehension, and communication skills
through short-term education and training, but also the ability to grasp the big picture of a situation or
incident from a broad perspective and envisage the future course of events.

1 Support for acquiring qualiﬁcations
1-(1) Support for acquisition and maintenance of specialized qualiﬁcations

The Asset Management Company supports all
employees (including both regular and contract
employees, etc.) in their eﬀorts to obtain degree
programs and certiﬁcations, such as ARES
(Association for Real Estate Securitization) Certiﬁed
Master, and all oﬃcers and employees (including
both regular and contract employees, etc.) may
utilize a system whereby such expenses are borneby the Asset Management Company. Furthermore,
to encourage the acquisition of diﬃcult
certiﬁcations, a certiﬁcation allowance is paid to all
employees (including both regular and contract
employees, etc.) who hold certiﬁcations in Japan asa real estate appraiser, lawyer, tax accountant, or
certiﬁed public accountant.
The number of employees with specialized
certiﬁcates is as shown below (including seconded
employees accepted).

Number of
employees withqualiﬁcations

Qualiﬁcation
ARES (Association for Real Estate
Securitization) Certiﬁed Master

9

Real estate transaction agent

18

Real estate appraiser

1First-class architect

1

Real Estate Consulting Master1

Certiﬁcate-holder Member of the
Securities Analysts Association of Japan1

Eco Test (Certiﬁcation Test forEnvironmental Specialists)

6

Care ﬁtter

1

US CPA

1（Note 1） As of March 31, 2023.
（Note 2） Includes personnel who have passed the credentialing
exam but are not yet credentialed.

Fiscal year

Number of cases using thequaliﬁcation support systemOﬃcers and employees
using the system

Amount of support funds(excl. tax)

FY2020５５（21％）¥248,888

FY202114

11（46%）¥517,243

FY202225

16（63%）¥1,076,249

36

1-(2) Others

Since MFLP-REIT conducts public offerings in overseas markets, we make efforts to improve the English
language abilities of all employees (including both regular and contract employees, etc.) of the AssetManagement Company in order to develop human resources able to operate globally, and have alsoestablished an English conversation school course fee support system.

2 Various training programs
One of the pillars of the Asset Management Company’s human resource development efforts is the various
training programs listed below under “2-(1) to 2-(3).”Fiscalyear

FY2021

FY2022Training
expenses

Training
expenses
per person

Total hours

Total hours
per person

Specialized ﬁeld training¥930,000¥38,750144 hours

6 hours

Level- and ﬁeld-speciﬁc humanresource
development business seminars¥427,200¥17,800

324 hours
and24 minutes

13 hours and
31 minutes

Compliance training¥618,000¥25,750174 hours

7 hours and
15 minutes

Total¥1,975,200¥82,300

642 hours
and24 minutes

26 hours and46 minutes

Specialized ﬁeld training¥900,000¥69,986

580 hoursand42 minutes

24 hours and21 minutes

Level- and ﬁeld-speciﬁc humanresource
development business seminars¥475,200¥19,938

122 hours
and58 minutes

5 hours and9 minutes

Compliance training¥768,000¥32,000

172 hours
and47 minutes

7 hours and
15 minutes

Total¥2,143,200¥89,924876 hours
and27 minutes

38 hours and3 minutes37

2-(1) Job-specific development training

For the purpose of periodically updating fundamental knowledge necessary for asset management of all
officers and employees (including both regular and contract employees, etc.), we regularly conduct training
programs led by external lecturers to study the circumstances of the economic environment and real estatemarket and the REIT market, etc.
[Examples of trainings]
Example 1 CBRE real estate market study group
Example 3 Data center-related study group
Example 5 ESG training

Example 2 Logistics field study group
Example 4 Real estate market research explanation
meeting
Example 6 Stamp Tax Study group2-(2) Level- and ﬁeld-speciﬁc human resource development business seminars

We provide a system that enables all oﬃcers and employees (including both regular and contract employees,etc.) to choose from around 1,700 level- and ﬁeld-speciﬁc courses oﬀered by external specialist institutions
per year. The primary objective is to provide an environment that assists the development of executive
candidates by improving their management and leadership skills and encourages the active development of acareer vision by each employee. Moreover, we also introduce seminars, lectures, and courses for selfimprovement in real estate-related operations and ESG to employees as needed and encourage them to takecourses.

2-(3) Compliance training

We strive to enhance not only individual capabilities but also organizational capabilities by implementing
compliance training programs for all oﬃcers and employees (including both regular and contract employees,etc.).
[Examples of initiatives]
Training on fundamentals of securities monitoring
Training on overview of FSAʼs supervisory guidelines ﬂor investment businessTraining on general theory of complianceTraining on conﬂicts of interest

3 Periodic career interviews

We hold a start-of-year interview (goal setting), interim interview (progress check and advice), and end-ofyear interview (evaluation result feedback) for direct employees, as part of building a transparent goalsetting and evaluation feedback system that ensures mutual understanding of intentions between
supervisors and subordinates. Furthermore, as a separate measure, a biannual career interview withdirectors is held to provide an opportunity for employees to talk about their own career formation, receive
performance feedback, and talk about their hopes for the Asset Management Company.
Fiscal year

Ratio of interviews held (direct employees)

FY2021

100% (14 out of 14 employees)

FY2022

100% (14 out of 14 employees)
38

Human resource development and retention
strategy
As the scale of assets under management increases, this ﬁscal year the Asset Management Company isagain planning a small number of mid-career hires with a view to securing the necessary operation execution
structure, and also is promoting various forms of capability development for employees through theaforementioned education and training programs. In addition, the Asset Management Company has a full
beneﬁt program and is promoting the establishment of comfortable working environments to enable
employees to continue working with conﬁdence. We are also promoting eﬀorts to increase work eﬃciency byencouraging long-term employment and increasing the motivation of employees.
In addition, the Asset Management Company has accepted highly expert personnel with diverse backgrounds
on secondment from Mitsui Fudosan and other companies. We are making use of their expert capabilities tomake qualitative improvements in operational expertise, aiming to realize advanced asset management
operations.
Employees in managerial positions seconded from Mitsui Fudosan possess expert know-how as well asorganization management skills, thus they have contributed to asset management and vitalization of theAsset Management Company.
[Number of persons seconded from Mitsui Fudosan and other companies] As of March 31, 2023
Mitsui Fudosan: 8 Sumitomo Mitsui Banking Corporation: 1
Reiwakaikeisha Tax Corporation: 1
Reference:Career Programs of Mitsui Fudosan, Human Resources Management/ESG Report 2022
At the Asset Management Company, the Board of Directors and General Meeting of Shareholders oversee
the appointments of officers. Other managerial appointments are determined by the President & CEO. Whenmaking changes to personnel appointments, an appropriate management candidate is selected from among
direct employees and the Mitsui Fudosan human resource pipeline, and the change is planned to ensuresmooth continuation of business and duties.
Furthermore, Mitsui Fudosan regularly conducts new graduate recruitment, and the Asset Management
Company also accepts secondments of young employees with less than 10 years of experience at Mitsui
Fudosan who have completed human resource development training programs at Mitsui Fudosan.
For detailed information on recruitment of new graduates, please refer to Human Resources Management
described in ESG Report 2022 of Mitsui Fudosan as stated above.

39

Creation of working environments conducive towork and work-life balance
Human resources are recognized as the most important asset of the Asset Management Company, which not
only meets the legal standards for health and safety, such as work-life balance, employee health, labor
management, and risk management, but also works to create working environments where all employees cancontinue to work with conﬁdence through the various initiatives described later. In addition, the AssetManagement Company introduce Activity Based Working through oﬃce renewal to further improve the levelof comfort for working environment.

(1) Employee engagement survey
In FY2020, the Asset Management Company started conducting an employee satisfaction survey to ascertain
the current status and hopes of all employees (including both regular and contract employees, etc.) for use
in improving the working environment. Since then, the Asset Management Company has conﬁrmed employee
satisfaction regarding the degree of fulﬁllment of their current assignments and satisfaction with their work
environment at least once a year. (On a ﬁve-point satisfaction scale, the average score was 3.97 in FY2020
and 3.54 in FY2021 and 3.53 in FY2022). Based on the results of this survey, the Asset Management
Company is striving to build better working environments.
[Examples of improvements in response to the employee satisfaction survey]
Introduction of electronic approval system
Implementation of oﬃce renewal
Introduction of health appliance(2) Structure for collecting requests and grievances of employees

During interviews with directors, all employees (including both regular and contract employees, etc.) areprovided with an opportunity to air their various hopes for the Asset Management Company and to conﬁrm
their own career options.
In addition, the Asset Management Company has established internal and external contact points for
consultation based on the internal consultation and whistleblowing regulations. The system enables all
employees (including both regular and contract employees, etc.) to anonymously report organizational orindividual behavior that violates laws and regulations (behavior that violates or is suspected of violating
laws, corporate ethics, and internal rules such as the compliance manual) or harassment to the Chief
Compliance Oﬃcer (or for matters concerning the Chief Compliance Oﬃcer, the President & CEO) or an
external law oﬃce. The same regulations protect whistleblowers and prohibit any disadvantage towhistleblowers, including retaliatory measures by the Asset Management Company such as dismissal. The
regulations also oblige the Asset Management Company to determine and take appropriate measures
regarding the reported matters.

40

(3) Introduction of cumulative investment unit investment program
The Asset Management Company has introduced a “cumulative investment unit investment program”
targeting all employees (including both regular and contract employees, etc.) of the Asset Management
Company, through which they can acquire investment units of MFLP-REIT. Officers, etc. of the AssetManagement Company who have been seconded from Mitsui Fudosan, our sponsor, can also use theircompany’s “cumulative investment unit investment program” to acquire investment units in MFLP-REIT. It is
anticipated that this system will result in all officers and employees (including both regular and contract
employees, etc.) being more focused on improving the performance of MFLP-REIT, and that this in turn willcontribute to the continuous growth of MFLP-REIT and enhancement of unitholder value. Furthermore, theAsset Management Company provides financial incentives to all employees (including both regular andcontract employees, etc.) utilizing the program in an endeavor to further enhance their benefit and welfare
programs.

(4) Beneﬁt and welfare
The various beneﬁt and welfare (incentive) programs listed below have been established to create a working
environment in which all employees (including both regular and contract employees, etc.) can continue towork in comfort and with peace of mind.
Cumulative investment unit
investment program
Deﬁned contribution pension
planFlex-time system
Pre- and post-natal leavesystemChildcare leave system
Child nursing leave
Nursing care leave
Nursing care leave system

Congratulation and condolence leave
Cafeteria plan
Subsidization of regular healthcheckup and screening fee
Loan of mobile laptop computer
Loan of smartphone
Loan of tablet device
Term-end bonuses

41

Award of prizes and bonuses under areward system
Subsidization of fees for club activities
Shared-oﬃce expenses borne by thecompany
Remote work system
Loan of laptop computer for working fromhomeOﬃce Bookstore
Introduction of OFFICE DE YASAI
Introduction of health appliance(5) Office Renewal
The Asset Management Company’s was renovated with employee comfort in mind. The office was also
upgraded with more plants, more space for work with a change of scenery, a TEL booth and solo seats as aconcentration area, more meeting space, also tried to make it DX by adding monitors for videoconferencing,
etc.

42

Promotion of Health Management
Human resources are recognized as the most important asset of the Management Company. We will not only
comply with the legal standards for health and safety, such as work-life balance, health of employees, labor
management, and risk management, but also work to create working environments where all employees cancontinue to work with conﬁdence through the various initiatives described later. Speciﬁcally, the AssetManagement Company has joined the Mitsui Health Insurance Association and provides various assistancesystems such as subsidies for inﬂuenza and other vaccinations as well as health screening fees, encourage
to undergo periodic health checkups and physical examinations (the medical examination rate in FY2022
was 100%), to all employees (including both regular and contract employees, etc.).
Also, the Asset Management Company support the maintenance and promotion of employees' health throughfollow-up services such as invitations to undergo reexamination by industrial physicians. Oﬃcers, etc. whohave been seconded from Mitsui Fudosan also beneﬁt from similar subsidy systems, and initiatives for thehealth of all oﬃcers and employees are implemented. In addition, in cooperation with an industrial physician,the Asset Management Company has established a consultation point where all employees (including both
regular and contract employees, etc.) can consult about both mental and physical health. Furthermore, toensure the safety of workplaces, the Asset Management Company conducts onsite checks by an industrial
physician.
The Asset Management Company strives to care for the mental health of all employees (including both
regular and contract employees, etc.) by conducting stress checks for all officers and employees (seconded
employees are subject to the system of the assigning company) and holding mental health seminars
performed by external instructors (the participation rate in FY2022 was 100%). In addition, as events topromote health, the Asset Management Company participate in walking team competitions (the participation
rate was 100%) also provide subsidies for the use of health-related facilities and sports facilities as part ofour welfare program. As a result of these activities, we obtained "authorization of silver" for healthy excellent
company in October 2022 and the 2023 Certified Health & Productivity Management Outstanding
Organizations (under the SME category) in Mach 2023.

Certified Health & Productivity
Management Outstanding
Organizations

Introduction of health appliance43

Installation of blood pressure
monitorGovernance Framework
Organization of the investment corporation
Investment corporations have at least one executive director and at least one more supervisory director than
the number of executive directors. Please refer to “Directors” for information regarding the composition of
directors.
Furthermore, the executive directors of MFLP-REIT do not serve concurrently as directors of the AssetManagement Company.
The organization of MFLP-REIT is composed of the General Meeting of Unitholders, which is comprised ofunitholders; the Board of Directors, which is comprised of one executive director and two supervisory
directors; and the independent auditor.

Organization

44

Independent auditor

Audit remuneration paid to the independent auditor for the 13th Fiscal Period (August 1, 2022 to January
31, 2023) was as follows.
Name

Amount of remuneration in the 13th Fiscal Period

KPMG AZSA LLC¥10,000 thousand* No payment of fees for non-auditing services has been made.
Furthermore, the independent auditor operates as follows, in accordance with the provisions on independent auditors
under the Certiﬁed Public Accountants Act, etc.
• Engagement partners may work on the audit operation for no more than seven accounting periods and lead engagement
partners for no more than ﬁve accounting periods.
• Engagement partners may not work on the audit operation again for ﬁve accounting periods after being replaced, andlead engagement partners may not work on the audit operation again after being replaced.

Fines arising from ESG issues in the audited accounts

During the year from April 1, 2022 to March 31, 2023, there were no cases of ﬁnes levied due to ESG
problems.

45

Directors
The composition of MFLP-REITʼs Board of Directors during the 13th Fiscal Period (the period from August
1, 2022 to January 31, 2023) totaled three members, namely one executive director (one male member) andtwo supervisory directors (one male member and one female member). The attendance rate of these three
directors at meetings of MFLP-REITʼs Board of Directors and their compensation are as follows. These
Directors are selected by resolution of the unitholders' meeting for the following reasons.
Name ofdirector, etc.

Position

Executive
director

Hiroshi Asai

Supervisory
director

Supervisory
director

Izuru Goto

Eiko Osawa

Length of service
1 years 3 months(from November
2021)

6 years 11 months(from March 2016)

1 years 3 months(from November
2021)

Attendance

9/9 times（100%）

51/51 times（100%）

9/9 times（100%）

Monthly remuneration
per director

Reason of Election¥500,000 per month

MFLP-REIT appointed him as
Executive Director because he hasabundant knowledge and experiencein asset management and real estate
securitization, and he is capable ofperforming his duties as arepresentative of MFLP-REIT.

¥300,000 per month

MFLP-REIT appointed him as
Supervisory Director because, as an
attorney-at-law, he has expert
knowledge and experience in risk
management related to legal aﬀairs
and compliance, and he is competentenough to supervise the execution of
the Executive Oﬃcer's duties.

¥300,000 per month

MFLP-REIT appointed her as
Supervisory Director because, as acertiﬁed public accountant, she has
expert knowledge and experience inrisk management related toaccounting and taxation, and she iscompetent enough to supervise theexecution of the Executive Oﬃcer's
duties.

* Remuneration shown is since November 2021.

Executive Director

Hiroshi Asai

Supervisory Director

Izuru Goto
46

Supervisory Director

Eiko Osawa

Organization chart
Management of the assets of MFLP-REIT is entrusted to the Asset Management Company. The AssetManagement Company engages in operations under the following operation structure in accordance with theAsset Management Agreement concluded with MFLP-REIT.

For further details, please refer to the section of “(ii) Operation system” in the securities report

Asset management fee structure consistent with the interests ofunitholders
The aim is to keep the interests of MFLP-REIT’s unitholders consistent with the interests of the AssetManagement Company.
Asset management fee I

Total assets × 0.1% (maximum)

Asset management fee II

Operating income (before deduction of asset management fees anddepreciation) × 5.5% (maximum)

Asset management fee III

Pre-tax earnings (before deduction of asset management fees) ×
Pre-tax EPU (before deduction of asset management fees) × 0.001%(maximum)47

Internal Control
Initiatives for thorough compliance
All officers and employees of MFLP-REIT and the Asset Management Company are to conduct corporate
activities honestly and appropriately based on high ethical standards beyond mere compliance with laws andregulations.
Pursuant to the Act on Investment Trusts and Investment Corporation and the Articles of Incorporation of
MFLP-REIT, MFLP-REIT stipulates in its Board of Directors Regulations that a Board of Directors meetingmust be held at least once every three months, at which the executive director must report on the status ofbusiness execution to ensure the supervision and control function of the supervisory directors. As of March
31, 2023, there are no cases where the interval between Board of Directors meetings has exceeded threemonths. The Board of Directors has a structure with one executive director and two supervisory directors,
both of whom are selected as experts with external specializations such as a lawyer and a Certified Public
Accountant.
Pursuant to the “Operation Policies” and the “Operation Guidelines” setting forth its basic philosophy for thefulfillment of fiduciary responsibility in asset management operations, the Asset Management Company
considers compliance to be an important issue in its management in order to increase trust from investors
and all other related parties. In addition, as an asset management company that is entrusted with asset
management, the Asset Management Company has fiduciary responsibility to strive to manage assets
appropriately by setting out concrete standards, strategies, and processes to be observed.
The Asset Management Company considers “Compliance” not only as legal compliance but also as observing
its internal rules and taking appropriate actions following social ethics and codes. As such, the AssetManagement Company sets internal rules, such as “Compliance Rules” as concrete guidelines and rules. In
addition, the Chief Compliance Officer has drawn up a Compliance Program, and is promoting a companywide culture of compliance that includes compliance awareness-raising and training activities for officers
and employees.

48The Asset Management Company sets forth in its “Compliance Rules” that when doubts concerning a breachof or conﬂict with laws, regulations or internal rules, etc. arise, its oﬃcers and employees must immediately
report the facts to the Chief Compliance Oﬃcer. In cases where the Chief Compliance Oﬃcer judges that
there are problems with the content of a report, the Chief Compliance Oﬃcer shall promptly report them to
the President & CEO, the Chief Investment Oﬃcer, and the Chief Finance Oﬃcer, and form an appropriate
response after conducting internal deliberations and performing checks with external specialists, as
required. Subsequently, after summarizing investigations into the facts of the matter, how the issue occurred,and measures to resolve it, a report is submitted to the Compliance Committee, the Board of Directors, andthe Board of Directors of MFLP-REIT. Furthermore, reports will also be made to the relevant government
agencies, as required. In light of applicable laws and regulations or internal rules etc., if a complianceviolation or an act deemed to be a compliance violation exists, the relevant officer will be subject tonecessary measures pursuant to deliberation by the Board of Directors, and the relevant employee will be
subject to a disposition under its work rules. (There were no complaints, violations or discipline of officers or
employees related to non-compliance from April 1, 2022 to March 31, 2023.)
In addition, the Asset Management Company has established internal and external contact points for
consultation based on the Internal Consultation and Whistleblowing Regulations. The system enables
officers and employees to anonymously report organizational or individual behavior that violates laws andregulations (behavior that violates or is suspected of violating laws, corporate ethics, and internal rules suchas the compliance manual) to the Chief Compliance Officer (or for matters concerning the Chief Compliance
Officer, the President) or an external law office. These regulations are designed to help ensure compliancewith laws and regulations for the activities of MFLP-REIT and the Asset Management Company. Companies
are required to determine and execute appropriate measures for reported matters, and whistleblowers areprotected by the Whistleblower Protection Act.

Anti-bribery and anti-corruption policy

MFLP-REIT and the Asset Management Company have positioned thorough compliance as a fundamental
principle of management, and are striving to build a compliance system and promote compliance. They
ensure thorough compliance and prevention of bribery and corruption by stipulating in the Compliance
Manual regarding excluding refusing dealings with anti-social forces, preventing money laundering, ensuring
fair competition, prohibiting insider trading, and receiving gifts, entertainment and donation.

Prohibition of bribery and handling of gifts and entertainment

At the Asset Management Company, the Compliance Manual prohibits providing entertainment or gifts that
go beyond the bounds of moderation internally or for business partners or relevant parties, providing
entertainment or gifts that are intended to inﬂuence the decisions of the other party, and, in accordance with
the National Public Service Ethics Act, providing entertainment or gifts that are presented to oﬃce holders ofgovernment oﬃces.
In addition, the Compliance Manual also prohibits accepting entertainment or gifts that go beyond thebounds of moderation internally or for business partners or relevant parties, accepting, requesting, or
promising bribes, etc. (entertainment or gifts, etc., that exceed the bounds of moderation) from externalbusiness partners or relevant parties, or providing special arrangements based on such bribes.
49

Anti-corruption initiatives

All oﬃcers and employees (including contract employees) receive compliance training, including corruption
prevention such as “refusing dealings with anti-social forces,” “prohibition on money laundering,” “fair andtransparent decisionmaking,” “prohibition of insider trading,” “entertainment, gifts, and donations,” as set
out in the Compliance Manual to ensure that they are fully aware of these. In selecting new business
partners and developing business in Japan and overseas, MFLP-REIT and the Asset Management Company
strive to evaluate the risk of corruption and prevent it. Through a checksheet for counterparties andconfirmation, etc. by the Chief Compliance Officer, new business partners are checked comprehensively for“refusing dealings with anti-social forces,” “prevention of money laundering,” “elimination of unfair trading
practices,” “prohibition of insider trading,” and “entertainment, gifts, and donations,” and for businesses
deemed to be a high risk of corruption, the response is determined by the Management Committee after
discussion by the Compliance Committee. These anti-corruption policies are overseen by the Board of
Directors. Specifically, the Compliance Committee oversees and periodically reports to the Board of Directors
on corruption prevention such as “refusing dealings with antisocial groups,” “prohibition of money
laundering,” “prohibition of insider trading,” and “entertainment, gifts, and donations.”
At least once every three years, an audit is conducted of the entire scope of operating activities, using aninternal auditor (including audits using external experts).

Fines, surcharges and settlements related to bribery and corruption

There were no serious violations of laws and regulations due to non-compliance with anti-bribery regulations
nor fines, surcharges or settlements related to corruption paid from April 1, 2022 to March 31, 2023.

Employees subjected to discipline or dismissal related to bribery and corruption

No employees were disciplined or dismissed in relation to bribery or corruption from April 1, 2022 to March
31, 2023.

Establishment of systems for refusing dealings with antisocial groups

MFLP-REIT and the Asset Management Company strive to take a firm position on antisocial group andrefuse any relationships with them in accordance with the Mitsui Fudosan Group Compliance Policy.
Furthermore, when MFLPREIT or the Asset Management Company starts a transaction with a third party,
they investigate and confirm that the counterparty is not an antisocial group before starting the transaction.
If it becomes clear that the counterparty is an anti-social force, and if the anti-social force makes anunjustified demand, the concrete procedures are set forth in the Compliance Manual and the Regulation for
Refusing Dealings with Antisocial Forces for clarifying the firm response to anti-social forces. The AssetManagement Company is a supporting member of the Tokyo Center for Removal of Criminal Organizations,and has established a structure for refusing dealings with anti-social forces by appointing a responsible
person under Article 14 paragraph 1 of the Act on Prevention of Unjust Acts by Organized Crime Group
Members. If it encounters unjustified demands or violent behavior from anti-social forces, the AssetManagement Company contacts the police station with jurisdiction and takes necessary legal measures andso forth.
50

Political contributions

No donations were made related to political activities to people outside of political parties or politicalfoundations. Moreover, when supporting the activities of a political group, MFLP-REIT and the AssetManagement Company do so appropriately in accordance with relevant laws and regulations, such as the
Political Funds Control Act and the Public Offices Election Act.

Record of donations related to political activities and support for activities ofpolitical groups

No political contributions were made in the year from April 1, 2022 to March 31, 2023.

Risk management initiatives
MFLP-REIT and the Asset Management Company aim to evade and minimize risks in investment andmanagement of its assets under management.

Information security management system

The Asset Management Company has established “Information Management Regulations” and “Information
Management Rules” to counter information asset risk. These regulations and rules classify information
assets and set out a code of conduct for officers and employees as well as judgment criteria and so forth,aiming to protect information assets by maintaining and increasing the level of organizational information
management and information security. Specifically, the Asset Management Company strives to manage risk
by stipulating the following.
Establishment of person responsible for overall management of information security
Periodic revision of information management regulations and rules in line with IT technology innovationand internal promotion throughout the Asset Management Company
Ensuring rigorous information management regarding outsourcing providers

Occurrence of an information security incident

No information system faults with financially or socially significant impacts occurred during the year from
April 1, 2022 to March 31, 2023.

Disaster and terrorism response

MFLP-REIT and the Asset Management Company strive to raise awareness of disaster prevention throughordinary training, inspections, and education, and aim to ensure safety and security by establishing andregularly reviewing crises management manuals for disasters.

51

Status of unitholders
Of the total number of investment units issued and outstanding, the top 10 ranking companies by percentage
of investment units owned is as follows.
Number ofinvestment units
owned (units)

Name

As of January 31, 2023
Number of investment units
owned expressed as apercentage of total numberof investment units issued
and outstanding (%)

Custody Bank of Japan, Ltd. (Trust Account)

109,826

19.1

The Master Trust Bank of Japan, Ltd. (Trust Account)

92,48416.1

Mitsui Fudosan Co., Ltd.

28,900

5.0

The Nomura Trust and Banking Co., Ltd. (Investment Trust Account)

25,651

4.5

SMBC Nikko Securities Inc.

12,336

2.1

STICHTING PENSIOENFONDS ZORG EN WELZIJN

12,257

2.1

STATE STREET BANK AND TRUST COMPANY 505103

9,394

1.6

STATE STREET BANK WEST CLIENT - TREATY 505234

8,767

1.5

SSBTC CLIENT OMNIBUS ACCOUNT

8,013

1.4

THE BANK OF NEY YORK MELLON 140044

7,850

1.4

* “Number of investment units owned expressed as a percentage of total number of investment units issued andoutstanding” is rounded to the first decimal place.

52

Sustainability Finance Framework
MFLP-REIT aims to strengthen the funding base by expanding the group of investors interested in ESG
investment and financing, along with promoting initiatives for ESG even further, by procuring funds through ESG
finance.

Sustainability Finance Framework
Overview of the Sustainability Finance Framework

Sustainability Finance Framework

Use of Proceeds from sustainability finance

The proceeds (the “Proceeds”) from sustainability finance shall be allocated towards the acquisition of specificassets (“Eligible Green Assets” and “Eligible Sustainable Assets” under sustainability finance, as defined below)
and towards refinancing new or existing debt and bonds to acquire these assets.

Eligible Sustainable Assets

Eligible Green Assets meet the following Eligible Green Project Criteria. Eligible Sustainable Assets meet therequirements of both Eligible Green Project Criteria and Eligible Social Project Criteria (for these two types of
eligible assets, hereinafter referred to as “Eligible Assets”).

53Eligible Green Project Criteria
The acquisition or planned future acquisition of certiﬁcation or re-certiﬁcation (hereinafter “Green Building
Certiﬁcation”) by the following third-party certiﬁcation institutions (1) to (5):(1) DBJ Green Building Certiﬁcation: 3 stars or higher (top three certiﬁcation levels)(2) BELS Certification: Three or more (top three certification levels)(3) CASBEE Appraisal: B+ or higher (top three certification levels)(4) LEED Certification: Silver, Gold or Platinum (top three certification levels)(5) Top three certification levels from any other third-party certification program

Eligible Social Project Criteria
New or existing real estate properties that meet two or more of the following criteria (1) to (3).
(1) Basic infrastructure development to revitalize the local community
Real estate that utilizes the land lot in a way that contributes to “urban development (machi-zukuri)” of thesurrounding area such as providing recreational green space based on the needs of the local society.
(2) Access to essential services for daily life
Real estate with adequate countermeasures to disaster such as evacuation centers used in the event of adisaster or has stockpiles of supplies for local residents.
Real estate that contributes to the local community such as having an authorized nursery center in theproperty.
(3) Socio-economic improvement and empowerment
Contributions to local societies and economies such as job creation by tenant companies and utilization of
local companies in construction projects.

Management of Proceeds

The upper limit of funds raised through sustainability finance is calculated by multiplying the interest-bearing
debt ratio (as of the most recent period-end that can be calculated as of the payment date or execution date ofbond or loan financing) by total acquisition price of the Eligible Sustainable Assets.

External review

In a third-party evaluation of its Sustainability Finance Framework, MFLP-REIT has been assigned an “Su1(F)”evaluation, the highest of in the JCR Sustainability Finance Framework Evaluation by Japan Credit Rating
Agency, Ltd. (JCR). In addition, as a third-party evaluation of 1st Unsecured Bonds also obtained SU1 by JCR, thehighest on the rating scale for the JCR Sustainability Bond Evaluation.
For details of the evaluation, please refer to JCR’s website → https://www.jcr.co.jp/en/greenfinance/

54

Issuance Status of Investment Corporation Bonds
Utilizing this Framework

On February 12, 2021, MFLP-REIT issued its ﬁrst bond as a Sustainability Bond, for which it experienced strong
demand from investors with an interest in ESG.
Interest Issue Redemption Repayment

AmountLenders(Millions of yen)

Rate

date

date

Feb. 12,

Feb. 12,

2021

2031

PeriodTerm

Subject

Status of

Propertyfund allocation

OthersUnsecured

1st Unsecured Bonds(Special pari passu conditions among speciﬁed

3,000 0.500%

investment corporation bonds)

30th

10 years

MFLP Kawaguchi I
MFLP Ibaraki

allocated

Non-guaranteed
Credit Rating
JCR: AA

2nd Unsecured Bonds(Special pari passu conditions among speciﬁed

2,000 0.820%

investment corporation bonds)
Total

Nov. 25,

Nov. 25,

2022

2032

Unsecured

MFLP Yachiyo Katsutadai
33rd

10 years MFLP Osaka Ⅰ

allocated

Non-guaranteed

MFLP Hiratsuka Ⅱ

5,000

Credit Rating
JCR: AA-

Borrowing Status of ESG Loans Utilizing thisFramework
Lenders

Classiﬁcation

Mizuho Bank, Ltd.
（Green Loan）
Nippon Life Insurance Company（Green Loan）
The Norinchukin Bank
（Green Loan）
Sumitomo Mitsui Banking Corporation（Green Loan）
Sumitomo Mitsui Banking Corporation（Green Loan）
Sumitomo Mitsui Banking Corporation（Green Loan）
MUFG Bank, Ltd.
（Green Loan）
Mizuho Trust & Banking Co., Ltd.
（Green Loan）
MUFG Bank, Ltd.
（Green Loan）
The Norinchukin Bank
（Green Loan）
Mizuho Trust & Banking Co., Ltd.
（Green Loan）

AmountInterest(Millions of yen)

Rate

Fixed Borrowing Maturity Repayment
/
Date
Date
PeriodFloating

Long-term

400

0.7488％

FixedLong-term

500

0.6455％

FixedLong-term

500

0.4988％

FixedLong-term

2,000Long-term

500

0.50％

Fixed

Long-term

500

1.2363％FixedLong-term

1,000

0.630％

Fixed

Long-term

500

1.2363％FixedLong-term

2,200

0.6725％

FixedLong-term

600

0.9350％FixedLong-term

300

1.1163％

Fixed

Total

Base rate+0.33% (*1)

Floating

Aug. 02,

Aug. 02,

2022

2032

Aug. 04,

Aug. 04,

2022

2031

Aug. 04,

Aug. 03,

2022

2029

Sep. 01,

Sep. 01,

2022

2033

Feb. 06,

Feb. 01,

2023

2027

Feb. 06,

Feb. 01,

2023

2033

Feb. 06,

Feb. 07,

2023

2028

Feb. 06,

Feb. 07,

2023

2033

Mar. 01,Mar. 01,

2023

2028

Mar. 15,

Mar. 17,

2023

2031

Mar. 15,

Feb. 07,

2023

2033

9,000

Term

Subject

Status of

Propertyfund allocation

33rd

10 years

MFLP Kuki etc(*2)

allocated

31st

9 years

MFLP Komaki

allocated

27th

7 years

MFLP komaki

allocated

35th

11 years GLP/MFLP Ichikawa Shiohama

allocated

22th

4 years

MFLP Hino etc(*3)

allocated

34th

10 years

MFLP Hino etc(*3)

allocated

24th

5 years

MFLP Hino etc(*3)

allocated

34th

10 years

MFLP Hino etc(*3)

allocated

24th

5 years GLP/MFLP Ichikawa Shiohama

allocated

30th

8 years

MFLP Hiratsuka

allocated

34th

10 years

MFLP Hiratsuka

allocated

OthersUnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed-*1 The base interest rate is the JBA three-month Japanese Yen TIBOR published by JBA. Even if the interest calculation period is less than three months, the base interest
rate will be calculated using the three-month JBA Japanese Yen TIBOR.
The JBA Japanese yen TIBOR can be found on the website of the JBA TIBOR Administration (http://www.jbatibor.or.jp/english/rate/).
*2 MFLP Yokohama Daikoku, MFLP Yashio, MFLP Atsugi, MFLP Funabashi Nishiura,
MFLP Kashiwa, MFLP Sakai*3 MFLP Inazawa, MFLP Atsugi Ⅱ

Click here for the List of Interest-Bearing Debt

55

Reporting
MFLP-REIT will publish the following items each year on its website as long as there is outstanding
sustainability finance.
Information as of January 31, 2023.

Status of fund allocation

The upper limit of funds raised through green ﬁnance and sustainability ﬁnance is calculated by multiplying theInterest-bearing debt ratio ("LTV", as of the most recent ﬁscal year-end that can be calculated as of thepayment date or execution date of bond or loan ﬁnancing) by total acquisition price of the Eligible Green
Assets※1 (Including Sustainable Assets).

※1 The total of eligible assets selected through the procedures set forth in the Framework.
※2 LTV is as of the end of 12th FP (July 31, 2022).

Reporting on environmental improvement eﬀects

The status of the green building assessments and certiﬁcation levels
See Initiatives to Obtain Green Building Certiﬁcation for details.

Reporting on social beneﬁts

Output indicators
3 properties
Number of Eligible Social
Assets56

Outcome(1) Basic infrastructure development to revitalize the local community
Overview of the project (Target Assets)
As well as incorporating a certiﬁed child care facility that can be used
MFLP Hino
not only by employees but also by local residents, the seismicallyisolated structure also contains stockpiles for disaster prevention.
As well as being seismically isolated, this building provides
infrastructure for use in times of emergency, such as stockpiles for
MFLP Sakai
disaster prevention, emergency-use toilets, and disaster relief vending
machines. It has also been designated a tsunami refuge by the local
government.
When acquiring and developing real estate owned by the City of
Kawaguchi, as well as helping to promote local industry in Kawaguchi,
MFLP Kawaguchi I
we also provide disaster relief services to local residents andestablish spaces for their relaxation.
Number of facilities equipped with
2 properties/3 properties
seismic isolation structures(2) Access to essential services
Number of facilities designated as
1 property／3 properties
evacuation sites in the event of a disaster
Number of facilities equipped with
2 properties／3 properties
disaster relief vending machines
Number of facilities equipped with
3 properties／3 properties
emergency supply stockpiles
Number of facilities equipped with
1 property／3 properties
cooking bench ** The “cooking bench” is a brick-enclosed basewith a seat plate placed on it. It is normallyused as a bench, but it is also used as a
kitchen range in the event of a disaster.

Number of facilities equipped with
2 properties／3 properties
emergency toilets
Number of facilities equipped with
3 properties／3 properties
emergency power supply
Number of licensed nursery centers
1 property／3 properties(3) Socio-economic improvement and empowerment
Number of facilities hiring local residents 3 properties／3 properties
Number of facilities hiring local companies 3 properties／3 properties
for construction work57

Sustainability Linked Loan Framework
MFLP-REIT aims to strengthen the funding base by expanding the group of investors interested in ESG
investment and financing, along with promoting initiatives for ESG even further, by procuring funds throughESG finance.

Sustainability Linked Loan Framework
Overview of the Sustainability Linked Loan Framework
With a view to procuring the Sustainability Linked Loan, MFLP-REIT has developed the Framework, the firsttime for J-REIT.
Under the Framework, “CO2 emission intensity in logistics facilities (Scope 1 and 2)” was selected as a KPI(the "KPI"), and the following SPT was established based on the KPI.
Sustainability Linked Loans are loan products that aim to help borrowers and lenders achieve sustainability by
incentivizing the achievement of ambitious SPTs predetermined by the borrower.

The selection of KPIThe KPI "energy conservation and reduction of CO2 emissions" selected for this framework corresponds to"reduction of environmental impact and energy generation" among the six priority action items in the "VISION
2025" ,which policy of Mitsui Fudosan Group. It is also consistent with the content of the environmental KPI set
by MFLP-REIT in March 2022.

Measurement of SPT

In the "CO2 emissions intensity of logistics real estate (base year: 2016)" section of the environmental KPI set
in March 2022, MFLP-REIT has set a target of 100% reduction by 2030 compared to the base year for theowner-managed portion (Scope 1 and 2).
If the loan term ends before 2030, reduction targets shall be set for the individual loan term, as necessary, andshall be specified in the Loan Agreement and other documents.

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Characteristics of the Loan

The borrowing rate will be linked to the degree of achievement of the SPT as follows:
Details of SPT determination① Scope 1 and 2: Reduce CO2 emissions intensity from logistics real estate by 100% by
2030 compared to 2016 (base year)② Scope 1 and 2: Reduce CO2 emissions intensity from logistics real estate in 2030 below
2016 (base year)

Incentive/Disincentive
Reduction of applicable interest rates uponachievement of SPT
Increase in applicable interest rate when SPT not
achieved

The specific applicable interest rate linkage range shall be separately stipulated in the Loan Agreement, etc.
for each individual loan.
In cases where reduction targets are set for individual loan periods, the details of the determination of SPT andthe applicable conditions shall also be separately stipulated in the Loan Agreement, etc.

External Review

MFLP-REIT has gotten Rating and Investment Information, Inc. to obtain the second opinion that the
Framework complies with the "Sustainability Linked Loan Principles" and the Ministry of Environment
Guidelines on “Expectations for Sustainability Linked Loans”. The second opinion is available on their website.

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Borrowing Status of Sustainability Linked Loans
Utilizing this Framework
AmountInterest(Millions of yen)

Rate

Fixed
Borrowing/
Date
Floating

Maturity

Repayment

Date

PeriodClassiﬁcation

Sumitomo Mitsui Banking Corporation

Long-term

500 0.50％

Fixed

Feb 01, 2023 Feb 01, 2027

22nd

4 years

allocated

Sumitomo Mitsui Banking Corporation

Long-term

400 1.2743％

Fixed

Feb 01, 2023 Feb 01, 2033

34th

10 years

allocated

Sumitomo Mitsui Trust Bank, Limited

Long-term

500 0.5875％

Fixed

Feb 01, 2023 Feb 01, 2027

22nd

4 years

allocated

Mizuho Bank, Ltd.

Long-term

500 1.2743％

Fixed

Feb 01, 2023 Feb 01, 2033

34th

10 years

allocated

MUFG Bank, Ltd.

Long-term

300 0.5375％

Fixed

Feb 01, 2023 Feb 01, 2027

22nd

4 years

allocated

Mizuho Trust & Banking Co., Ltd.

Long-term

500 1.2743％

Fixed

Feb 01, 2023 Feb 01, 2033

34th

10 years

allocated

The Bank of Fukuoka

Long-term

500 1.0175％

Fixed

Feb 01, 2023 Aug 01, 2030

29th

7.5 years

allocated

Nippon Life Insurance Company

Long-term

500 1.2743％

Fixed

Feb 01, 2023 Feb 01, 2033

34th

10 years

allocated

The Norinchukin Bank

Long-term

500 0.9663％

Fixed

Feb 01, 2023 Feb 01, 2030

28th

7 years

allocated

The Yamaguchi Bank, Ltd.

Long-term

500 1.2743％

Fixed

Feb 01, 2023 Feb 01, 2033

34th

10 years

allocated

Shinkin Central Bank

Long-term

500 1.2265％

Fixed

Feb 01, 2023 Aug 01, 2032

33rd

9.5 years

allocated

Sumitomo Life Insurance Company

Long-term

500 1.2743％

Fixed

Feb 01, 2023 Feb 01, 2033

34th

10 years

allocated

The Chiba Bank, Ltd.

Long-term

400 1.0175％

Fixed

Feb 01, 2023 Aug 01, 2030

29th

7.5 years

allocated

SBI Shinsei Bank, Limited

Long-term

500 1.2743％

Fixed

Feb 01, 2023 Feb 01, 2033

34th

10 years

allocated

The Joyo Bank, Ltd.

Long-term

400 1.0175％

Fixed

Feb 01, 2023 Aug 01, 2030

29th

7.5 years

allocated

Daishi Hokuetsu Bank, Ltd.

Long-term

400 0.9663％

Fixed

Feb 01, 2023 Feb 01, 2030

28th

7 years

allocated

The Bank of Kyoto, Ltd.

Long-term

400 1.2265％

Fixed

Feb 01, 2023 Aug 02, 2032

33rd

9.5 years

allocated

Momiji Bank Ltd.

Long-term

400 1.2265％

Fixed

Feb 01, 2023 Aug 02, 2032

33rd

9.5 years

allocated

The Keiyo Bank, Ltd.

Long-term

400 1.0175％

Fixed

Feb 01, 2023 Aug 01, 2030

29th

7.5 years

allocated

The Yamagata Bank Ltd.

Long-term

400 0.9663％

Fixed

Feb 01, 2023 Feb 01, 2030

28th

7 years

allocated

Kiraboshi Bank, Ltd.

Long-term

300 0.9663％

Fixed

Feb 01, 2023 Feb 01, 2030

28th

7 years

allocated

Kiraboshi Bank, Ltd.

Long-term

200 1.2743％

Fixed

Feb 01, 2023 Feb 01, 2033

34th

10 years

allocated

The Hachijuni Bank, Ltd.

Long-term

500 1.0175％

Fixed

Feb 01, 2023 Aug 01, 2030

29th

7.5 years

allocated

Total

10,000Term

Status ofLenders

fund allocation

Remarks
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed
UnsecuredNon-guaranteed-

Click here for the List of Interest-Bearing Debt

Reporting and Veriﬁcation
MFLP-REIT shall submit evidence to the Lender regarding SPT results (Reduction rate of CO2 emissions
intensity for Scope 1 and 2 compared to the base year) for the previous calculation year by June 30 of eachcalculation year, regardless of whether the SPT is determined or not. However, if MFLP-REIT has publicized
the same information on website, etc., submission of the materials is not required.
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