Message from Executive Officer

Executive Officer：

Yasushi Iwasa

NIPPON REIT Investment Corporation (“NIPPON REIT” or “NRT”) and SBI REIT Advisors Co., Ltd. (“SRA”), the asset management company entrusted with the management of NRT’s assets, pursue asset management from a medium- to long-term perspective with the objective of enhancing unitholder value on a sustainable basis.

ESG (Environmental, Social and Governance) initiatives are a key element of the investment management strategy. Based on the Sustainability Policy and Sustainability Targets, continuous efforts are made to reduce environmental impact, strengthen collaboration with stakeholders, and enhance governance.

Environmental initiatives include energy conservation, reduction of greenhouse gas emissions, efficient use of water resources, improvement of the environmental performance of portfolio properties, and acquisition of environmental certifications. These efforts have been recognized by external assessment organizations. The GRESB Green Star designation has been earned for consecutive years, recognizing excellence in both the Management Component, which evaluates ESG policies and management framework, and the Performance Component, which assesses property-level environmental performance and tenant engagement.

NRT and SRA will continue to promote responsible real estate investment through sustainability initiatives that enhance asset value and contribute to a sustainable society. Dialogue with all stakeholders, including unitholders, tenants, local communities, business partners, and officers and employees, remains a priority. Timely, appropriate, and transparent disclosure will continue to support the sustainable enhancement of unitholder value over the medium to long term.

Sustainability Policy

The SBI Group, the main sponsor of NIPPON REIT, has contributed to resolving social issues through many different business activities and seeks to realize a sustainable society and continuously improve its social value based on the unwavering idea that "a company is a part of society and is only able to continue existing because it belongs to society" since its founding.
SRA has established the "Sustainability Policy" and practices it, with an understanding that taking viewpoint of ESG seriously contributes to realize basic policy of NIPPON REIT such as "maximization of unitholders’ value while focusing on income growth and stability".

1. Effort to save energy and reduce greenhouse gas emission

We will make effort for reduction of greenhouse gas emission to contribute to climate change mitigation by improving energy efficiency and installation of facility equipment which is conductive to save energy, etc..

2. Realization of recycling-oriented society

We aim to realize recycling-oriented society by driving forward resources saving as well as waste reduction and recycling.

3. Compliance with environment-related laws and regulations

We will comply with environment-related laws and regulations including requirements which we decide to meet. Furthermore we will monitor law amendments and follow them.

4. Environmental education and enlightenment

We will disseminate the "Sustainability Policy" to our employees. Furthermore we will educate and enlighten them to consider the environment.

5. Collaboration with outside stakeholders

We will strive to collaborate with all stakeholders especially tenants, property management companies, suppliers and local communities in order to practice initiatives based on this policy.

6. Disclosure of ESG information and obtaining environment certification

We will disseminate the "Sustainability Policy" to all stakeholders such as investors, and will strive to proactively disclose information on the status of activities related to ESG. Furthermore we will make effort to obtain environment certification continually.

Sustainability Promotion Framework

SRA has established a Sustainability Promotion Committee to promote initiatives based on its Sustainability Policy. The President & CEO serves as the Chief Sustainability Officer. The Sustainability Promotion Committee consists of the Chief Sustainability Officer (President & CEO), the Senior General Managers of the Investment Management Division and the Financial & Planning Division, the Compliance Officer, and the General Managers of each department. In principle, the Committee meets four times a year to formulate and review policies, targets, and various measures related to sustainability

Sustainability Target

SRA has set its "Sustainability Target" as follows.

(1) Establishment of targets to reduce energy use

■ A. Energy consumption

• In the short term, a reduction of 1% per year in unit energy consumption will be targeted in the entire portfolio.
• Over the medium and long term, a reduction of 5% per five-year period in unit energy consumption will be targeted in the entire portfolio.

B. GHG emissions

• In accordance with the energy consumption reduction targets, a reduction of 1% per year in unit greenhouse gas (GHG) emissions will be targeted over the short term in the entire portfolio.
• In accordance with the energy consumption reduction targets, over the medium and long term, a reduction of 5% over the five-year period from FY2026 to FY2030 in unit GHG emissions will be targeted in the entire portfolio.
• Individual targets will be set with respect to properties subject to measures against global warming prescribed by local regulations (Tokyo Metropolitan Ordinance, etc.).
• CO2 emission intensity is targeted to be reduced 50% by FY2030 from FY2016 level.

C. Water consumption

• A reduction of an average of 0.5% per year over the ten-year period from FY2017 in unit water consumption will be targeted in the entire portfolio.

D. Waste management

• A waste recycling ratio of 70% over the ten-year period from FY2017 will be targeted in the entire portfolio.

(2) Management of targets

• As a general principle, every three months we carry out target management, review the progress made toward achieving its targets and ascertaining the degree of achievement against the actual value target, comparing and analyzing with the previous year at a general meeting called Sustainability Promotion Conference.

Materiality

「Based on its management philosophy of aiming for stable growth in unitholder value over the medium to long term, NIPPON REIT identified the following materiality (material issues) in terms of sustainability, incorporating the perspectives of ESG in Dec 2020.
By setting goals for each of these issues, and by progressively implementing PDCA to achieve these goals, we will work to resolve the global social issue of "SDGs" (Sustainable Development Goals), which was adopted by the United Nations in 2015, and medium to long term growth.」

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Information Disclosure Policy and Reporting Framework

NIPPON REIT and SRA base their disclosure of operational information on the principles of accuracy, fairness, and clarity, and strive to provide stakeholders with timely and appropriate information.
Taking into account international ESG standards such as the GRI (Global Reporting Initiative), as well as requests from investors and rating agencies, we are committed to enhancing the quality of our disclosures.
Going forward, we will continue to share our initiatives and approach widely as we work toward the realization of a sustainable society and the enhancement of medium- to long-term unitholder value.