Sustainability Promotion System

Sustainability Policy

The Hulic Group has adopted the following corporate philosophy: “Total commitment to our customers and the community. Creating productive environments. Creating amenity. Promoting peace of mind.” Based on this corporate philosophy, the Hulic Group has established the “Sustainability Vision” and gives consideration to sustainability in its real estate development and investment.
Hulic REIT Management Co., Ltd. (Hulic REIT Management), shares the Hulic Group’s corporate philosophy. Believing that consideration for the Environment, Society and Governance (hereinafter, “ESG”) leads to the maximization of medium- to long-term unitholder value, it has formulated the “Sustainability Policy” and implements this policy in its operations.

1. Compliance and Risk Management

  • We give consideration to sustainability in our asset management operations. This involves complying with the laws and regulations, and other rules related to ESG, while taking appropriate measures to evaluate risks such as those related to the natural environment and hazardous substances.

2. Measures Addressing Climate Change

  • We are pursuing climate change confermeasures by striving to improve our energy efficiency through energy-saving initiatives involving renovations or building management and promoting the reduction of greenhouse gas (GHG) emissions such as CO2.

3. Recycling-Oriented Society

  • We contribute to the formation of a recycling-oriented society by promoting water-saving measures and the 3Rs of “Reduce, Reuse, Recycle.”

4. Environmental Management System

  • We formulate a basic policy relating to energy-saving, and reduction of GHG such as CO2, etc. and aim for their continuous improvement in accordance with the basic policy.

5. Environmental Awareness and Education for Employees and Officers, and Employee-Friendly Work Environment

  • We carry out activities to promote ESG-related awareness and education for employees and officers.
  • We value work-life balance, diversity, and equal opportunities for employees and officers and aim to realize an employee-friendly work environment.

6. Collaboration with Stakeholders

  • We encourage interactive communication with all our stakeholders. Through such communication, we promote collaboration with business partners, improve customer satisfaction, and contribute to the sustainable development of local communities.

7. Disclosure of Information to Stakeholders

  • We work to broadly disclose information on our initiatives related to ESG to all stakeholders, including our unitholders.

At Hulic REIT Management, basic policy, targets (KPI), specific initiatives, organizational structure and other measures have been stipulated in the Sustainability Promotion Regulations, Energy Conservation Policy, Green Gas Emission Reduction Policy, Climate Change and Resilience Policy, and EMS Operating Manual formulated based on the Sustainability Policy above.

Sustainability Promotion System

Hulic REIT Management has formulated the “Sustainability Promotion Regulations” with the aim of establishing an internal system to implement the “Sustainability Policy”, collaboration with relevant parties outside of the Company, information disclosure policy, etc.
Hulic REIT Management inaugurated the “Sustainability Committee”, members of which include the President and CEO, in 2016 based on the Sustainability Promotion Regulations. At the Committee, consideration and drafting of basic policy, targets (KPI) and measures for energy conservation, low carbon and other sustainability are among the operations conducted, and the progress of targets (KPI) and measures are reported. In addition, problems and issues are shared, with also the President and CEO, and any necessary revisions undergo consideration of improvements and implementation of PDCA. The Compliance Officer takes part in the Committee, making it a system facilitating recommendations, overseeing of execution and such from the perspective of compliance. A system is also in place for ongoing follow-up of remaining issues and matters that have been pointed out. In addition, the Executive Officer for Sustainability Planning hosts employee and officer training focused on sustainability at a frequency of at least once a year to share information on the progress of sustainability targets (KPI) and measures, etc. with all employees and officers as needed.
Moreover, the promotion system has been structured to ensure effectiveness by including sustainability elements in the annual performance assessment of personnel evaluations for all employees and officers of Hulic REIT Management.
Furthermore, if there are employees or officers who have implemented particularly worthy sustainability-related initiatives, these will be shared internally, and with the aim of further fostering an organizational climate that promotes sustainablity, it is possible to provide them with recognition for their efforts.

1. Internal System

  • Sustainability Supervisor: President and CEO
  • The Supervisor's role is to set basic guidelines and the targets (KPI) relating to sustainability promotion and to improve the system.
  • Executive Officer for Sustainability Planning: General Manager of Finance and Planning Department
  • Executive Officer for Sustainability Investment and Management: General Manager of Asset Management Department

2. Sustainability Committee

  • Members: Sustainability Supervisor, Executive Officer for Sustainability Planning, Executive Officer for Sustainability Investment and Management, Head of Planning and Administration Division, Head of Investment and Management Division, Compliance Officer, General Manager of Corporate Administration Department, General Manager of Accounting Department, General Manager of Investment Department and the secretariat
  • Secretariat: Finance and Planning Department
  • Number of meetings: Once or more every three months. Participants in the meetings will share information on sustainability, consider targets (KPI) for issues and individual measures, and report on progress in achieving these targets (KPI) and initiatives such as evaluation and analysis.

3. Educational and Awareness Activities

  • Sustainability training (once or more per year)
  • Participation in external training
  • Inclusion of sustainability elements in the annual performance assessments of employees and officers
  • Internal sustainability-related awards program

Materiality and SDGs

Hulic Reit, Inc. (Hulic Reit) and Hulic REIT Management extract issues that we, as a real estate investment corporation, should consider based on the concept of the Sustainable Development Goals (SDGs) from among the various ESG issues, and identify those for which initiatives should be strengthened in particular as issues of materiality.

Materiality for Hulic Reit Related SDGs
E 1

Promotion of Energy Conservation and Climate Change Confermeasures

  • Promote GHG emission reduction through energy conservation at portfolio properties
  • Promote proactive acquisition of green building certification with the intention of raising the reliability and objectivity of the achievements of initiatives for reducing environmental footprint
  • Set targets (KPI) for energy consumption, GHG emissions and the percentage of properties that will have acquired green building certification
2

Circular Economy Practices (Effective Utilization of Water Resources, Waste Reduction, Etc.)

  • Contribute to the formation of a recycling-oriented society by promoting water-saving measures and the 3Rs of “Reduce, Reuse, Recycle”
  • Reduce water use through water-saving and reuse of grey water and rain water
  • Appropriate waste disposal in compliance with laws, regulations, etc.
S 3

Enhancement of Customer (Tenant/User) Satisfaction

  • Enhance customer satisfaction and enhance the value of portfolio properties through promotion of initiatives that serve to enhance the well-being, safety and comfort of customers and asset management that boosts the attractiveness of the tangible and intangible aspects of portfolio properties
4

Disclosure of Information to and Dialogue with Stakeholders

  • Enhance stakeholder satisfaction through interactive communication with various stakeholders, including unitholders, customers and business partners
  • Proactively disclose information on ESG initiatives to unitholders and other stakeholders
5

Motivating Work Environment (Nurturing of Human Resources, Diversity, Etc.)

  • Secure human resources who are appropriate for the business activities and operating conditions, among other factors, and improve their expertise with a training support system, etc.
  • Realize an employee-friendly work environment with attention paid to work-life balance, diversity and equal opportunities
6

Contribution to Local Communities

  • Contribute to local communities through initiatives that contribute to revitalization of the region and community at portfolio properties as a member of the community
G 7

Strengthening of Governance

  • Comply with laws, regulations and rules, and enhance compliance awareness through training, etc. to ensure business operations are performed with ethics and self-discipline
  • Establish effective structure for prevention of transactions involving conflict of interest

Please refer to this page for Hulic Reit’s and Hulic REIT Management’s initiatives for each materiality.

Materiality Assessment

Step 1:Extraction of issues
  • Define key stakeholders of Hulic Reit. Extract elements of potential issues that should be considered when thinking about Hulic Reit’s sustainable growth widely from environmental, social and governance aspects, using SDGs, GRI, GRESB, ESG rating agencies’ assessment criteria and such as reference
Step 2:Refinement and prioritization of draft issues, and preparation of draft materiality
  • Assess degree of importance to stakeholders based on opinions and advice of key figures
  • Assess degree of impact and importance in terms of Hulic Reit’s business risks and opportunities in light of the findings of questionnaires of Hulic REIT Management’s key employees and officers and the Sustainability Policy
  • Prepare draft materiality as matrix of the outcome of assessment from the two perspectives
Step 3:Management-level discussion, validation and approval
  • Hulic REIT Management’s Sustainability Committee discusses draft materiality and identifies materiality in line with Hulic Reit’s and Hulic REIT Management’s internal regulations, etc.
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