Environment

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Sustainability

Establishing an Environmental Charter

The MC-UBS Group formulated the Environmental Charter, which sets out our environmental principles and action plans.
MCUBS then formally established it in June 2013.

Environmental Charter

At Mitsubishi Corp.-UBS Realty Inc., we consider the Earth itself to be our most important stakeholder and are continuously working toward the realization of a sustainable society through our business activities.
  • We will strive to reduce greenhouse gas emissions by continuously implementing new efficiency measures and embracingnew technologies.
  • We will promote the sustainable use of natural resources including energy, minerals, food stocks, and water throughout our global business operations.
  • We recognize the critical importance of what ecosystems can provide and are committed to protecting ecosystems and mitigating any potential impacts on biodiversity.
  • We will strive to create and enhance environmental benefits by undertaking conservation activities and reducingour environmental footprint.
  • We will continue to actively engage and work with our various stakeholders openly and transparently and disclose information on the environmental impacts of our business operations in an appropriate and timely manner.
  • We will conduct all of our activities in compliance with environmental laws while adhering to international rules and social standards.

Issuing Green Bonds

As part of its efforts to maintain sustainability for the environment and society as a whole, JRF has issued the Green Bond, the first such issuance from a J-REIT in May 2018. Through the issuance of the Green Bond, JRF conducts investment contributing to the implementation and realization of a sustainable environment and society.

About Green Bonds

Green Bonds refer to bonds that are issued by business companies, funds, local governments, and other entities in order to procure funds for green projects (environmental investments and loans). Typically, the bonds are issued according to the Green Bond Principles laid down by the International Capital Market Association (ICMA). For further details, please see the link below:

The Green Bond Framework Overview

1. Project evaluation/selection
With regard to the Green Bond issuance process, which is based on the Green Bond Principles, MCUBS selects new or existing properties (“Eligible Green Projects”) from its portfolio, which satisfy the eligibility criteria*1 of MC-UBS’ Sustainability Committee, as subject assets for the Green Bond.
 
*1 To be eligible for Green Bond proceeds, Eligible Green Projects must meet one of the following eligibility criteria:
  • On the payment date of each investment corporation bond, buildings that have received 3, 4, or 5 stars under the DBJ Green Building Certification Program within two years preceding the Green Bond issuance date, and/or buildings that are expected to receive the certification after issuance. At the time of reporting, buildings that meet the same criteria as of the end of February of each year
  • On the payment date of each investment corporation bond, buildings that have received B+, A, or S rank under the CASBEE Certification Rank within two years preceding the Green Bond issuance date, and/or buildings that are expected to receive the certification after issuance. At the time of reporting, buildings that meet the same criteria as of the end of February of each year.
 
2. Use of proceeds
The Green Bond totaling the same amount will be allocated toward one or more of the following.
  • The acquisition of existing and/or new Eligible Green Projects.
  • The refinancing of existing debts that have already been allocated to Eligible Green Projects.
  • The redemption of the issued investment corporation bonds (including Green Bonds) required to acquire Eligible Green Projects.
3. Management of Green Bond proceeds
JRF has an internal process in place to track and monitor the amount of outstanding Green Bond proceeds and the allocation thereof, which is in line with market practice. The maximum outstanding amount of the proceeds (“Debts of Eligible Green Projects”) is calculated by multiplying the total book value of Eligible Green Projects by JRF’s interest-bearing liabilities ratio (45.1% as of the end of February 2019).
 
The maximum outstanding amount of Green Bond proceeds is ¥116.3 billion, and JRF currently issues ¥8 billion (as of the end of February 2019).
 
 
For further details regarding Eligible Green Projects, please see the link below:
Environmental Approvals and Evaluations for Group Assets

For the Book Value of Eligible Green Projects, please see the link below:
IR Library


Second-Party Opinion

JRF has obtained a second-party opinion from Sustainalytics, an ESG rating agency, for the eligibility of Green Bond*2 proceeds. For further details regarding the second-party opinion, please click

*2 Green Bond eligibility entails a Green Bond framework that aligns with the four pillars (use of proceeds, project evaluation and selection, management of proceeds, and reporting) of the Green Bond Principles 2018

Issuing Green Bonds

This table can be scrolled sideways.

  The 1st Green Bonds
(The 12th Unsecured Investment Corporation Bonds)
The 2nd Green Bonds
(The 13th Unsecured Investment Corporation Bonds)
Issued Amount (million yen) 8,000 7,000
Interest Rate 0.210% 0.200%
Issue Date May 25, 2018 June 25, 2019
Maturity Date May 25, 2023 June 25, 2024
Remarks Unsecured, Unguaranteed Unsecured, Unguaranteed
Assessment*3 GA1 -
Release Notice Concerning Issuance of the 1st Green Bond Notice Concerning Issuance of the 2nd Green Bond
*3 Assessment is a rating opinion provided by R&I with regards to the extent to which the Green Bond proceeds are used to invest in projects that resolve environmental issues.

Impact Report

1. Eligible Green Projects: Number of Properties and Total Floor Space

2. Eligible Green Projects: Energy Consumption

In the conversion of energy consumption into CO2 emissions, a calculation method and an emission factor based on the Act on Promotion of Global Warming Countermeasures are adopted.
The data of CO2 emissions is sum of Scope 1 and Scope 2, not including Scope 3.

Environmental Approvals and Evaluations for Group Assets

JRF actively engages in sustainability activity, but we also believe in the importance of obtaining objective evaluations and certifications for this activity. In order to meet the demands of investors, tenants and various stakeholders in the global market, JRF has obtained a wide range of certifications ranging from valuating building performance to evaluating entire funds.

Conditions Regarding the Acquisition of Certifications

JRF have received several positive overall ratings of our funds under management from GRESB (Global Real Estate Sustainability Benchmark), the current global standard for real assets. JRF has been achieved the highest ranking of Green Star among the four ranked evaluations using the Global Real Estate Sustainability Benchmark conducted in 2019, for five consecutive years. In addition, JRF became the first J-REIT to participate in the CDP (formerly, the Carbon Disclosure Project) climate change program in 2016.
Regarding performance evaluations on real estate, we have acquired certifications for CASBEE for Real Estate, DBJ Green Building, and BELS. For further details, please see below.
Going forward, we will maintain its policy of improving the ratings of its overall funds under management while increasing its proportion of properties with certifications from external parties.

GRESB

JRF has been achieved the highest ranking of Green Star among the four ranked evaluations using the Global Real Estate Sustainability Benchmark conducted in 2019, for five consecutive years.

The Global Real Estate Sustainability Benchmark (GRESB) is a system for carrying out benchmark evaluations of the environmental, social and governance (ESG) performance of real estate companies and the like. In addition to the GRESB Real Estate Valuation, a system for valuating real estate, the GRESB Publicly Disclosed Valuations was initiated with five levels of public disclosure that disclosed data on the environment, society, and governance exclusively.

JRF was Designated as Highest Grade “Green Star” for Five Consecutive Years

JRF was designated by the GRESB (Global Real Estate Sustainability Benchmark) Real Estate Assessment as "Green Star," the highest ranking of the four categories for the five consecutive years in 2019.
2019
Real Estate
Green Star (fifth consecutive year) : 4 stars
2018
Real Estate
Green Star (fourth consecutive year) : 5 stars
Sector Leader
Public Disclosure : A
2017
Real Estate
Green Star (third consecutive year) : 4 stars

CDP Climate Change Program

CDP is an international non-profit organization that investigates global warming measures implemented by listed companies. It is funded by institutional investors across the world that manage assets totaling more than 100 trillion dollars. CDP has attracted attention as a non-governmental initiative that seeks to guarantee the performance of the Paris Agreement, which took effect on November 4, 2016.
 
Since 2003, CDP has sent annual questionnaires to the world’s leading companies, requesting them to disclose information regarding their greenhouse gas emissions and their business risks and opportunities related to climate change. Based on the replies it receives, CDP evaluates the companies’ response to climate change problems, awarding one of nine ranks: A, A-, B, B-, C, C-, D, D-, or F.
 
For further details on CDP, please see the link below:
https://www.cdp.net/ja

JRF received a score of “C” from the CDP (formerly the Carbon Disclosure Project) Climate Change Program for the disclosure of information regarding its climate change activities in 2018.

Certification for CASBEE for Real Estate

CASBEE® (Comprehensive Assessment System for Built Environment Efficiency) is an evaluation system that ranks buildings and structures in terms of their environmental performance. In addition to each building's ability to reduce its environmental impact across a variety of areas including energy and resource conservation as well as recycling, this system comprehensively evaluates the environmental performance of each building and structure including its aesthetic appeal.
*CASBEE® is a registered trademark owned by the Institute for Building Environment and Energy Conservation (IBEC) and is used with permission.
Number of Properties Classified by Evaluation Ranking
S : 11 properties (first rating acquired in 2015) 
A : 2   properties (first rating acquired in 2015)

JRF properties have received the certification as below.

S ★★★★★

A ★★★★

*At AEON MALL Yamato, AEON MALL Musashi Murayama, AEON MALL Tsurumi Ryokuchi, and AEON MALL Itami, we received certification jointly with our tenant, AEON MALL Co., Ltd.
*At AEON MALL Sapporo Naebo and AEON MALL Sapporo Hassamu, we received certification jointly with our tenant, AEON Hokkaido Co., Ltd.
*At AEON MALL Kobe Kita, we received certification jointly with DREAM Private REIT Inc., which is a quasi-co-owner of the real estate trust beneficiary rights, and our tenant, AEON MALL Co., Ltd.
*At Ario Otori, we received certification jointly with our tenant, Ito-Yokado Co., Ltd.
*At AEON Itabashi Shopping Center, we received certification jointly with our tenant, AEON RETAIL Co., Ltd.
*At AEON Naha Shopping Center, we received certification jointly with our tenant, AEON RYUKYU Co., Ltd.



DBJ Green Building Certification

Under the DBJ Green Building system, the Development Bank of Japan (DBJ) certifies real estate properties with high environmental and social awareness, based on five evaluation ranks (one star "★" to five stars "★★★★★"), using a comprehensive scoring model developed independently by DBJ.
Number of Properties Classified by Evaluation Ranking
5 stars: 1 property   (first rating acquired in 2015) 
4 stars: 7 properties (first rating acquired in 2014) 
3 stars: 4 properties (first rating acquired in 2014) 
2 stars: 5 properties (first rating acquired in 2014) 
1 star : 2 properties (first rating acquired in 2016) 

The rankings received by JRF-owned properties are listed below:

5 ★★★★★

4 ★★★★

3 ★★★

2 ★★

1 ★

BELS Certification

BELS certification is provided under a public evaluation system, which evaluates the energy conservation performance of non-residential buildings. In the BELS system, five levels of energy conservation performance are evaluated by a third party based on various criteria, irrespective of whether they are new buildings or existing buildings. BELS certification, which is the first public evaluation system specific to energy conservation performance in Japan, is expected to promote further improvements by providing appropriate information and promoting the energy conservation performance of buildings.
BELS Certification
Number of Properties Classified by Evaluation Ranking
4 stars: 1 property (first rating acquired in 2017) 

The following JRF property received certification:

4 ★★★★

Medium and Long-term Goals and Environmental Performance

JRF works actively on energy conservation measures that relate to asset management, with the aim of creating a sustainable society through the reduction of environmental impact.

Medium-to-Long-Term Goals

Based on the Act on Rationalizing Energy Use (Energy Saving Act), JRF’s goal is to reduce the units of consumption related to energy use by one percent or more of the yearly average.

Specific Initiatives to Reduce Impact on the Environment

  • Business activity that incorporates energy conservation and control of CO2
  • Reduce waste
  • Promote efficient use of water
  • Permeate the concept of reducing the impact on the environment among, and strengthen partnership with persons associated with JRF’s business activity

Environmental Performance

As part of our carbon risk measures, at JRF we collectively manage our energy consumption and CO2 emissions by outsourcing this work to external contractors; this has enabled us to gather highly accurate and transparent data. We then analyze this data as part of our continuing efforts at managing reductions in energy consumption.
 
Details of JRF’s Environmental Performance are listed below:
 
*When converting energy consumption into CO2 emissions, we use the calculation methods and emissions factors stipulated by the Act on Promotion of Global Warming Countermeasures
*The CO2 emissions listed above are the total value of Scope 1 and Scope 2 emissions; Scope 3 emissions have not been included.

Climate Change

At JRF, we recognize that climate change issues are growing more serious every year. To this end, we implement environmentally friendly and energy-saving measures and make efforts toward more efficient energy use at our properties to show greater consideration for the environment and lessen its environmental impact. In order to lower CO2 emissions—which are one of the risk factors for climate change—we are establishing a system that will assess and manage emissions across our entire portfolio.
In 2016 we became the first J-REIT to take part in CDP, and we have been actively promoting our CDP activities ever since.

CO2Emissions

Data and emissions per unit are calculated based on the total leasable floor area (after considerations for rate of occupancy).

■Data collection rate
2018 89.1%
2017 92.7%
2016 88.4%

■Aggregation period
2018: March 2018–February 2019
2017: March 2017–February 2018
2016: March 2016–February 2017

Energy

At JRF, we implement environmentally friendly and energy-saving measures and make efforts toward more efficient energy use at our properties to show greater consideration for the environment and lessen its environmental impact. We collectively manage electrical power, fuel, and water consumption and analyze the accumulated data, which is both accurate and highly transparent to actively manage reduction of energy use.

Electrical power Consumption / Fuel Consumption

Data and emissions per unit are calculated based on the total leasable floor area (after considerations for rate of occupancy).

■Data collection rate
2018 89.1%
2017 92.7%
2016 88.4%

■Aggregation period
2018: March 2018–February 2019
2017: March 2017–February 2018
2016: March 2016–February 2017

Examples of Energy Initiatives

JRF manages more than 960 tenants in approximately 100 properties. Out of consideration for the global environment, together with our tenants we proactively take measures to save energy and reduce CO2 emissions at the properties we own.
We have made capital investments at some of our facilities, such as by installing LED lighting and solar power systems, and optimizing air conditioning systems. In this way, we can increase the efficiency of our facilities while recovering investment costs from the rent payments of our tenants; our tenants, meanwhile, can reduce their utility costs without any capital outlay. These energy reduction measures therefore result in a win-win situation for both ourselves and our tenants. 

LED Lighting

We are working to reduce energy consumption and increase the lifespan of our lighting by replacing existing lighting with LED lighting. When it comes to replacing the lighting, we confirm in advance with our tenants the reductions in electricity consumption we expect to make; in some instances, we have also entered into agreements with our tenants to recover the costs of the investment in lighting, by receiving part of the savings they make on their electricity bills as rent. 

Properties with LED lighting installed:
plus numerous other properties 


Solar Panels

Solar panels are installed on the roofs of facility buildings to save energy by using renewable sources.

Properties with solar panels installed:


plus numerous other properties

 

Optimizing Air Conditioning Systems

Replacing existing air conditioning systems with more efficient models enables us to use electricity and gas more effectively, and so not only reduce environmental load but also reduce monthly costs. Some local governments provide subsidies and grants for replacing such systems; we are utilizing this support to replace air conditioning systems where necessary. 

Properties with air conditioning systems installed:


plus numerous other properties
 
 

Water

JRF strives for sustainable resource use, and we are making active efforts to utilize water resources effectively. We work with our tenants toward the effective use of water resources by utilizing on-site well water pumped from 100 m underground, drawn using automatic water supply apparatus.

Water Use

Water Use
Data and emissions per unit are calculated based on the total leasable floor area (after considerations for rate of occupancy).

■Data collection rate
2018 89.0%
2017 92.7%
2016 90.1%

■Aggregation period
2018: March 2018–February 2019
2017: March 2017–February 2018
2016: March 2016–February 2017

Examples of Water Initiatives

Efficient Use of Water
At JRF-owned properties, together with our tenants we actively engage in the effective use of water resources. 
Using Rainwater to Restore Underground Water
Following renovations, the Oyama Yuen Harvest Walk shopping center now features more than 6,000 square meters of permeable paving, enabling rainwater to be restored underground. This development is part of JRF efforts to “create a positive impact.” For further details, please click here.

Waste

JRF is engaged in efforts to minimize the amount of waste produced by its properties, and to monitor and appropriately manage the amount of waste generated.

Waste Amount

Waste
Data and emissions per unit are calculated based on the total leasable floor area (after considerations for rate of occupancy).

■Data collection rate
2018 61.7%
2017 88.5%
2016 99.1%

■Aggregation period
2018: March 2018–February 2019
2017: March 2017–February 2018
2016: March 2016–February 2017

Biodiversity

JRF recognizes the critical importance of what ecosystems can provide, and we are committed to protecting ecosystems and mitigating any potential impacts on biodiversity.
In addition, to provide peace of mind to our customers, we are actively adding greenery to our facilities and creating parks and other communal spaces.
 
 

Examples of Biodiversity Initiatives

Greening of Facilities JRF

In addition to energy savings, the greening of facilities creates pleasant spaces for customers and allows them to relax and enjoy the colors and fragrances of the natural surroundings.

Greening of main entrances and wall surfaces of parking lots

La Porte Aoyama
La Porte Aoyama

The greening of main entrances and wall surfaces of parking lots mitigates outdoor temperature increases by means of transpiration by plants and also provides relaxation and comfort through its visual impact, in addition to energy savings and the suppression of temperature increases due to solar radiation.

Greening of rooftops and entrances

Nara Family
Nara Family

The greening of rooftops and entrances and the bedding of various flowers and plants throughout the year creates a visually appealing environment for customers. JRF can also expect to benefit from such greening as it encourages shopping by customers who come to various events that are held in open spaces on a regular basis.

Pollution Prevention

JRF strives to create and enhance environmental benefits by undertaking conservation activities and reducing its environmental footprint with MCUBS, the asset management of JRF.

Assessments When Acquiring Real Estate Properties

When acquiring real estate properties, JRF takes various environmental factors into consideration before making invest¬ment decisions: property inspections, land history investiga¬tions, and other related research on environmental risk factors.
During soil and environmental investigations, third-party experts perform environmental pollution investigations. Prior to executing any purchase agreement, JRF will have experts conduct a soil and environmental contamination survey to assist it in assessing a property’s environmental risks. JRF will use the pre-investment assessment workflow chart to determine whether the investment would be appropriate.
Concerning soil contamination, its property acquisition manual stipulates that investment targets shall be, in principle, properties “that are very unlikely to have soil contamination or that cannot eliminate the possibility of having soil contamination but are very unlikely to carry environmental damage risk.”

Pre-Investment Assessment Workflow

*1 If we are unable to determine solely from a review of historical records that there is no risk of soil contamination or that no other environmental contamination exists (for example, a manufacturing facility that utilized toxic or other hazardous substances in the past), we will conduct interviews with the seller.
*2 If we are unable to determine from interviews with the seller that there is no risk of soil or other environmental contamination, we will conduct a soil and groundwater contamination survey.
*3 If a contamination concern exists, but the necessary remediation would be technically or economically infeasible (for example, remediation is extremely difficult due to structures existing above the contaminated area), we will recommend a price adjustment.
*4 If, after discussions with the seller, remediation is deemed technically and economically feasible, we will conduct site remediation or require the seller to do so.

Building Safety

JRF is working to maintain the safety of its buildings by conducting building and earthquake risk assessments at the time of acquisition as well as collecting engineering reports on a regular basis.

Seismic Reinforcements

Bic Camera Tachikawa
Bic Camera Tachikawa

JRF conducts a building and earthquake risk assessment at the time of property acquisition, and calculates earthquake risk in held properties whenever standards are revised. When necessary, secondary assessments are performed as well. When results of those assessments conclude that earthquake-resistant reinforcement construction is required, we make environmentally conscious choices that will provide the necessary seismic retrofitting while minimizing waste. At the same time, we also work to reduce CO2 emissions and energy consumption in the updated facility.

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