19-D-010 2April 23, 2019

Impact Reporting Metrics for Green Building Projects by ICMAand JCR’s View
In March 2019, the International Capital Markets Association (ICMA) published a Suggested Impact Reporting
Metrics for Green Building Projects. The following is an abstract of the Suggested Metrics and JCR's view on thecertification system for Green Building.

1.

Summary of Metrics (Extract)

Green Building is one of the Green Eligible Projects described in the Green Bond Principles (GBP) published by theICMA.
In December 2015, one of the ICMA’s working group consisting of eleven international financial institutions
published a “Harmonized Framework for Impact Reporting”. The framework outlined core principles andrecommendations for impact reporting in order to provide issuers with reference and guidance for the developmentof their own reporting and provided core indicators and reporting templates for energy efficiency and renewableenergy projects.
In common with the release of harmonised frameworks for impact reporting on sustainable water and wastewater
management projects (in June 2017), for sustainable waste management and resource-efficiency projects (inFebruary 2018) and for clean transportation projects (in June 2018), this document builds on the earlier frameworkand outlines a harmonised framework for impact reporting on green building projects.
Green Building's GBP categories cover a wide range of issues, including water use and waste management, inaddition to energy consumption. However, it is recommended that those that focus only on building energy
efficiency and low carbon are reported using the relevant indicators and templates presented in the "Unified
Framework for Impact Reporting" described above, as they are considered to fall within the GBP category "Energy
Efficiency (New Buildings, Renovations, etc.).
GBP recommends that both qualitative and, where practicable, quantitative performance measures be used alongwith disclosures of key underlying methodologies and assumptions used to determine quantitative measures.
While this document proposes certain quantitative impact reporting metrics, GBP also encourages issuers to provide
qualitative information in relation to their green building projects, whether they are for new buildings or theretrofitting of existing buildings. Such qualitative information is also encouraged to provide for a meaningfulcontextualisation of the baseline situation and the improvement as a result of the project. For green building projects,regional, national or (optimally) internationally recognised standards or certifications are key and providing
important baselines. These standards or certifications are important for comparing against which the green building
project can be benchmarked. Other salient information such as the siting of the building and its purpose may be
critical to understanding the design of the project, and its benefits in managing resources and protecting theenvironment.
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https://www.jcr.co.jp/enFor a meaningful assessment of the aggregate impact of projects, consistency in the methods of calculation, baselines
and benchmarks is necessary. Thus for the purpose of data quality, issuers are encouraged to disclose additional
technical reports and/or data verification protocols where additional information could be provided as well as links tothe sources of such data and methods of calculation. The robustness of disclosures and/or the underlying
methodology may be enhanced by making available any independent assessment from consultants, verification
bodies and/or institutions with recognised expertise in environmental sustainability such as LEED, BREEAM andBEAM. We note, however, that many of these assessments and standards incorporate evaluations that extend beyond
environmental factors, and thus issuers should seek to provide greater transparency on their scores against the“green” requirements.
Proposed major indicators and other sustainability indicators are designed to facilitate quantitative reporting at theportfolio level across projects and geographies. The importance of the geographic context in the assessment ofsolutions reinforces the benefit of additional disclosures, such as the national, regional and local context, informationon the population served, pollution levels, and specific CO2 electricity grid baselines. While the core indicators
proposed focus on the construction, development and refurbishment of Green Buildings, and are thus also relevant totheir purchase, several other sustainability indicators are relevant to the management of Green Buildings over time.

(Reference) <Five Major Indicators for Green Building>
A. Energy Performance
B. Carbon Performance
C. Water Efficiency and Savings
D. Waste Management
E. Certification Standard, if available (described in "2. Description on the Certification Scheme")

2.

Description on the Certification Scheme
Guidance and definitions (excerpts)
Certification Scheme:
While the importance of international certification schemes as industry benchmarks are highlighted by theirprime position in the proposed core indicators, the associated costs and processes may be deemed prohibitive forsmall local players, or large portfolios of very small assets. Locally applicable proxies (other applicablecertification scheme) may therefore provide a relevant baseline when compatible with the major international
certification schemes.

Five key indicators for the Green Building Project (excerpt)
E. Certification Standard (if available)#5 Type of scheme, certification level and m2 GBABenchmarks
Internationally and nationally recognised standards for Green Buildings
LEED (Leadership in Energy and Environmental Design), BREEAM (Building Research Establishment
Environmental Assessment Method), ANSI/ASHRAE/IES/USGBC Standard 189.1 Standard for theDesign of High-Performance Green Buildings and/or the International Green Construction Code; etc.
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Other standards for Green Buildings widely known and/or used in the industry locally,
CEEQUAL, DGNB, EDGE, the International Energy Conservation Code (IECC), the US Property
Assessed Clean Energy Programs (PACE), Passive House or Swiss Minergie, etc., and/or
When compatible with the aforementioned standards
National Minimum Requirements for Energy Efficiency in Buildings in EU states (based on the EU
Energy Efficiency Directive) and Energy Performance Certificates (EPCs), or national certification
schemes.

3.

JCR's view on the certification scheme

Certification of Green Building Projects is a key part of impact reporting, as indicated in ICMA's proposed Impact
Reporting Standards. However, the suggested standard exemplifies a certification system that is mainly used inEurope and the United States, such as the U.S. LEED and European BREEAM, and does not provide specificexamples of a certification system for CASBEE1 and BELS2 that is widely used in Japan.
However, national certification systems are also described as substitutable if they comply with "Internationally andnationally recognised standards for Green Buildings," such as LEED and BREEAM and/or "Other standards forGreen Buildings widely known and/or used in the industry locally," such as standards or CEQUAL, the DGNB, theEDGE, and the International Energy Conservation Standards (IECC) .
JCR recognises that CASBEE and BELS are eligible as "Internationally and nationally recognised standards forGreen Buildings" as well as LEED and BREEAM. Although the DBJ Green Building is not a specialized evaluationof environmental performance, it also has a certain evaluation item regarding environmental performance. Therefore,
JCR evaluates this certification as equivalent to the "Green Building" defined in the Green Bond Principles, which is"Green Project Classification: Internationally and nationally recognised standards for Green Buildings" as defined inthe Green Bond Principles. However, if the certification is not specialized for the environment, the issuer may berequested to submit supplementary materials or provide additional explanations in order to confirm theenvironmental improvement effects such as energy saving performance.

Japan Credit Rating Agency, Ltd.
Jiji Press Building, 5-15-8 Ginza, Chuo-ku, Tokyo 104-0061, Japan
Tel. +81 3 3544 7013, Fax. +81 3 3544 7026

1CASB EE is a met hod f or e va l ua ti ng a nd r at i ng t he envi r onment al p er f or ma nc e of b uil di ngs . The eva l ua ti onr es ults ar e di vi ded i nt o fi ve gra des: Ra nk S ( Exc ell ent) , Ra nk A ( Ver y Good) , Ra nk B + (Good) , Ra nk B ( Sli ght l yPoor) , a nd Ra nk C (P oor )2

B ELS is p osit i oned a s a t hi r d-pa rt y c erti fi cat i on s ys t em f or t he gui del i ne f or energy cons er vat i on p er f or ma nc elab eli ng. The y a r e r ep r es ent ed b y fi ve sta rs, f our sta rs , t hr ee sta rs ( gui da nc e c ri t er ia) , two s tar s ( energ yeffic i enc y c ri t er ia) , a nd one star ( exis ti ng energy eff ic i enc y cr it eri a).
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