Sustainability

Ⅵ. Acquisition of External Certification

A. DBJ Green Building Certification* Awarded

ADR has fifteen properties which was awarded the DBJ Green Building Certificate. (26.7% of total floor space, 6.3% of total number of property as of July 2020)

* DBJ Green Building Certification is a certificate developed by Development Bank of Japan Inc. (DBJ) to identify and certify real estate properties that satisfy various social needs including environmental quality. Please refer to the following sites for details.
Development Bank of Japan Inc.
DBJ GREENBUILING

** Certification Rank of the 17 properties are as follows. (As of July 31, 2020)

Four Stars ★★★★ Properties with exceptionally high environmental and social awareness

Three Stars ★★★ Properties with excellent environmental and social awareness

Two Stars ★★ Properties with high environmental & social awareness

B. Awarded “Building-Housing Energy-efficiency Labeling System (BELS)” Certification

RESIDIA Ochanomizu Ⅱ was awarded the BELS Certification for in March 2019.
For further information on the “BELS”, please refer to their website.
https://www.hyoukakyoukai.or.jp/bels/info.html (Japanese Only)

C. Participation in GRESB Assessment

In 2014 ADR became the first residential J-REIT to participate in the GRESB* Assessment. In the last four years it has been consecutively awarded a Green Star rating and a 3 Star GRESB rating where 5 Star is the highest rating.
Green Star rating is given to businesses that have been assessed to be superior in both “Management and Policy” and “Implementation and Measurement”.
GRESB rating shows the relative global position of ADR’s GRESB score within the participating companies.
Additionally, ADR has also been award a top “A” rating for its ESG disclosure.
By continuing to participate in the assessment ADR and its asset manager AD Investment Management Co., Ltd (ADIM) will strive to improve their quality of the measures they will take in regards of sustainability and score higher in the assessment.

* GRESB is an industry-driven organization established by European pension funds committed to assessing the sustainability performance of real estate portfolios (public, private and direct) around the globe. The dynamic benchmark is used by institutional leading investors in Europe, the U.S. and Asia to engage with their investments in an aim to improve the sustainability performance of their investment portfolio, and the global property sector at large.

D. MSCI Japan ESG Select Leaders Index

Advance Residence Investment Corporation (ADR) was the only residential J-REIT to be selected as a constituent of “MSCI Japan ESG Select Leaders Index*” by MSCI** on the launch of the index in 2017.

Although in 2018 ADR was excluded from the index, we were able to improve ADR’s ESG rating for this index from BB to BBB.

The index selects companies in the “MSCI Japan IMI Top 500 Index” that have high “Environmental,” “Social” and “Governance” (ESG) profile relative to their sector peers.

Furthermore, the Government Pension Investment Fund (GPIF) announced that it has selected the index for their ESG investment strategy.

ADR has been managing its assets with ESG performance in mind, and it will endeavor to further increase its value by improving its long-term ESG performance.

For further information on the “MSCI Japan ESG Select Leaders Index”, please refer to the website listed below.
https://www.msci.com/msci-japan-esg-select-leaders-index

MSCI is one of the largest investment information provider and has been providing investment information to institutional investors for more than 40 years.

E. Participation in RobecoSAM's CSR Rating

In 2018, ADR became the first residential J-REIT to be rated on its CSR performance by RobecoSAM, This CSR rating is used to determine constituent companies of Dow Jones Sustainability Diversified Index Series.

F. Expressing Support for The Task Force on Climate-related Financial Disclosures Recommendations

Based on the recommendations of TCFD, ADIM will continue to contribute to the realization of a sustainable society by assessing the impact of climate change on its businesses, taking measures to counteract risks and to take advantages of opportunities, andproactively disclosing related information.
ADIM expresses its support for the recommendations issued by the "Climate- related Financial Disclosure Task Force* (TCFD)" on March 11, 2020.

ADIM recognizes that climate change is an important issue affecting the futuresustainable growth of ADIM and ADR.

* TCFD was established in 2015 by the Financial Stability Board, which consists of central banks and financial regulators of world’s major countries. In June 2017, it issued recommendations urging companies to analyze climate-related business risks and opportunities in the medium- to long-term, and reflect the findings to its financial disclosures in order to mitigate risks that could destabilize financial markets.


 

G. Participation in Japan Climate Initiative

ADR and ADIM subscribes to the fundamental principles of Japan Climate Initiative (JCI) and became a member in July 2019.
Following the establishment of the “Paris Agreement” for the prevention of global warming in 2015, JCI was established by a coalition of Japanese corporations, municipalities NGOs. Members of JCI aims to voluntarily and actively engaged in climate change countermeasures to realize a decarbonize society.

For more information on this issue, please visit the Japan Climate Initiative website.

H. MUFG ESG Rating Certification for J-REIT supported by JCR

ADR and ADIM were collectively granted the highest rank of “S” in “MUFG ESG Rating Certificate for J-REIT supported by JCR” by Mitsubishi UFJ Research and Consulting Co., Ltd. (MURC). This rating  service provided by MURC evaluates J-REITs’ initiatives and implementations on ESG issues based on the original rating system devised by JCR. It assigns the rank to each J-REIT that applies for the rating and provides feedbacks on ESG issues it has found as a result of the evaluation to the participating J-REIT.

Please refer to MURC’s website for detail the certificate.
http://www.murc.jp/sp/1810/j-reit/index.html (Japanese only)

I. Issuance of Investment Corporation Bond (Green Bond)

ADR believes that the issuing of green bonds will further promote ESG considerations in its asset management and enhance our financing base by broadening our investor universe, especially for investors interested in ESG investment. It is with this belief that ADR issued the first green bond among residential J-RIETs. The Investment Corporation bonds will be issued as green bonds in accordance with the green finance framework formulated by the Investment Corporation. Regarding the eligibility of the green finance framework, ADR has received a “Green 1 (F)” rating, the highest rating, in the JCR Green Finance Framework Evaluation by the Japan Credit Rating Agency, Ltd., an institution which assesses green financing.