Sustainability

Sustainability Policy

AD Investment Management Co., Ltd., the asset management company for ADR, established the Sustainability Policy in March 2015. Subsequently, ADR has conducted operations in accordance with this policy as it strives to contribute to creating a sustainable society and to further raise unitholders’ value through such measures that promote sustainability as listed below.

 

  1. Establishing organization-wide structure for compliance and risk management
    Organization-wide structure is established to comply with laws and regulation pertaining to ESG and to manage risks.
  2. Reduction of energy consumption and CO2 emissions
    Reducing carbon footprint of property holdings by measures such as promoting energy conservation awareness among tenants and installing equipments that are energy efficient.
  3. Resource conservation and reduction of waste
    Water conservation waste recycle promote tenants resource conservation recycling oriented sustainable society help realize
  4. Employee education
    Fostering employee awareness on environmental consideration and promoting environmentally conscious practices through education.
  5. Stakeholder engagement
    Employee cooperation between property manager to provide high quality housing society contribute tenants
  6. Transparent disclosures
    Reporting ESG policies and measures to unitholders through transparent disclosures.

Sustainability Initiatives

The followings are the efforts of initiatives concerning sustainability that ADR has been conducting.

Our Materiality Methodology

We have identified our materiality using the following methodology.

  • Step1  Identify

We have identified our materiality from wide range of issues concerning economy, environment and society using guidelines from GRI Standards, external evaluations (GRESB, DJSI, MSCI ESG, etc.).

  • Step2  Prioritize

We determined nine issues in our sustainability initiatives by prioritizing issues that are most material to the effect which ADR will have on economy, environment and society, and what are most important to our stakeholders.

  • Step3  Authorize

The nine issues have been identified at our sustainability committee and have been authorized by our Representative Director as issues material to ADR’s initiatives on promotion of sustainability

  • Step4  Review

In order to flexibly address to changing challenges, reflect stakeholders expectations and improve our disclosure transparency we will periodically review our materiality.

 

Material

Related SDGs

Environmental Issues

Extending service life of properties through timely large-scale repairs and value enhancement works

11, 13

Obtaining environmental, energy conservation and other certification on properties

11, 13

Management and reduction of energy consumption, CO2 emissions, water usage and waste volume

7, 11, 13

Cooperation with property manager (PM) and building manager (BM) firms in implementing environmentally friendly practices

(Supply Chain Management)

11, 13, 17

Social Issues

Improving tenant satisfaction

Engagement with tenants

11, 13

Contributing to local communities

3, 11, 13

Developing employee talents

4, 5, 8

Improving employee work-life balance

3, 8

Governance

Linking asset management fee to fund’s performance

8, 17

 

Environmental Considerations

Environmentally Conscious Asset Management
  1. Extending the lifespan of properties through large-scale repairs and value-enhancement renovations
  2. Installing LED lighting
    As of January 2019, LED lighting is installed in 59 properties (22% of portfolio).
  3. Installing water-saving toilets
  4. Installing heat shielding paint roofing
  5. Encouraging tenants to conserve energy usage through posters on common area billboards and periodical “RESIDIA News” and sending of sustainability guides
  6. Setting of green-lease contract
  7. Including a criterion concerning initiatives taken on environment in selecting a property manager
  8. Working together with building managers towards shared goals on environmental concerns
  9. Introducing car sharing in parking lots of properties
    As of January 2019, LED lighting is installed in 3 properties (1% of portfolio).
LED lighting installation

P-62
RESIDIA TOWER Azabujuban

Installation of water conserving toilets

P-53
RESIDIA Roppongi-Hinokichokoen

Heat-shielding paint roofing

P-73
RESIDIA Shibaura

Sustainability Guide
Energy Conserving Encouragement Poster
Extending the economic life of building structures through large-scale repairs and value enhancement renovations.

ADR aims to raise unitholders’ value while contributing to the environment (e.g. reducing life cycle CO2 emissions) by extending the economic life and maintaining the value of building structures through large-scale repairs and value enhancement renovations.

Large-scale repairs

C-46
RESIDIA Mejiro

Equipment renewals and upgrades

P-79
RESIDIA Kamimeguro

Target and results (energy consumption, CO2 emissions, water usage and waste volume)

ADIM has established policies on “energy conservation”, “greenhouse gas emission reduction”, “water conservation” and “waste management” to improve energy efficiency of ADR’s properties and making effort to reduce the properties’ energy consumption and greenhouse gas emission.

1% average annual reduction is the medium to long-term target on reducing energy consumption and greenhouse gas emission for the whole property portfolio.

 

Items

Reduction Target

Short-term Target

Long-term Target

Energy Consumption

1%

Annual intensity

5 year (FY2014 through FY2019) / 5% total reduction in intensity

GHG Emission (CO2)

1%Note

-

5 year (FY2014 through FY2019) / 5% total reduction in intensityNote

Water Usage

Non increase

Annual intensity

5 year (FY2017 through FY2021) / Non increase in intensity

Waste Volume

Non increase

Annual intensity

5 year (FY2014 through FY2019) / Non increase in intensity

 Note :Both Scope1 and Scop2 set same reduction target.

 

  

  

Total Usage

  

(MWh)

  

  

FY2014

  

  

FY2015

  

  

FY2016

  

  

FY2017

  

  

Coverage

  

(FY2017, %)

  

  

Intensity

  

(MWh/m2)

  

Energy   Consumption

Electricity

20,469

19,495

21,937

20,885

21.7%

0.0226

0.0205

0.0230

0.0215

Fuel

1,540

1,715

1,574

1,697

4.0%

0.0018

0.0018

0.0017

0.0019

District Heating   and Cooling

2,854

3,208

3,077

3,256

100.0%

0.0704

0.0792

0.0759

0.0803

 

 

 

Total Usage

( t)

FY2014

FY2015

FY2016

FY2017

Coverage

(FY2017, %)

Intensity

(t/m2 )

GHG   Emission

(CO2)

Total

10,337

11,783

12,547

24,972

24.4%

0.0114

0.0124

0.0132

0.0252

Direct Emission

(Scope 1)

233

292

289

298

37.7%

0.0003

0.0003

0.0003

0.0003

In-direct Emission

(Scope 2)

10,104

11,491

12,258

11,815

24.4%

Scope 3note

-

-

-

12,678

64.9%

 note:Calculated by multiplying the amount of garbage discharged at the property by the emission factor at the time of combustion.

                 

  

 

  

  

Total Usage

  

(m3)

  

  

FY2014

  

  

FY2015

  

  

FY2016

  

 

 

 

 

 

 

 

FY2017

  

Coverage

  

(FY2017, %)

  

  

Intensity

  

(m3/m2)

  

Water   Usage

140,987

154,546

193,347

199,285

24.7%

0.1557

0.1628

0.2027

0.2048

 

 

 

FY2014

FY2015

FY2016

FY2017

Coverage

(FY2017, %)

Waste   Volume

Total Amount

(t)

-

2

5,934

6,436

64.9%

Intensity

(t/m2)

-

0.0000

0.0062

0.0066

Recycling Rate

(%)

-

0.0%

13.4%

17.7%

 

                 

 

 

Notes:

  1. Review period

The fiscal year starts on April and end on March of the following year.

2.   Calculation method

(1)Intensity is calculated as follows.

Total Usage or Emission (MWh) ÷ Total Property Floor Space (m2)

(2)Coverage is calculated as follows.

Total Floor Space of Data Collected (m2) ÷ Total Property Floor Space (m2)

 

 

Setting of Green-lease contract

Leasing contract with clauses concerning energy and water conservation (green-lease contract) to 44.2% of tenant contracts as of February 2018

Also ADR will enliven the green lease provision in the management consignment contract with property manager.

And based on the contract, ADR have received proposals concerning LED installation once a year from the building managers. 
Supply Chain Management

ADIM has established a Green Procurement Policy to put the sustainability policy’s specific component into practice with the cooperation from its suppliers.

Based on the policy, major suppliers including all property management companies that ADIM uses as a vendor have been evaluated at the time of start of the contract and annually using surveys on how they are addressing sustainability issues since FY2016.

To strengthen the engagement with the suppliers, since we believe it is important to have their understanding and cooperation, on FY2017 we have re-notified property management companies and building management companies who are our major supplier, our Green Procurement Guideline.

Investment Urban Area

ADR promote the reduction of environmental burden and contribute to the revitalization of the city and the community through investment in various kinds of properties.

Investments in Flexible/Mixed Use Properties

ADR invests in flexible/mixed use properties (As of January 2019, 76 properties (28% of portfolio)), thereby contributing in reducing environmental impact, revitalizing the area and providing convenient facilities to tenants and local residents.  In addition, ADR contribute to the revitalization of the city and the community, such as people gathering in the property with convenient facilities and open space. Flexible / mixed use properties that ADR invest in are;

  1. Properties close to train stations which promote the use of public transportations thereby reducing CO2 emissions
  • 92% (on acquisition price) of properties are located within 10 minute walk from the nearest train station.
  1. Properties with convenient facilities such as a supermarkets or convenient store attached.
  2. Properties with open space which are publicly accessible. (As of January 2019, 7 properties (3% of portfolio))
  3. Properties that are barrier-free towards senior citizens.
Investments Towards Urban Revitalization and Redevelopment Properties

ADR contributes in promoting urban revitalization and redevelopment through investments in the revitalization and redeveloped properties.

 In revitalization projects, block districts are maintained and advanced utilization is done.
 So ADR contribute to the revitalization of the city and the community, such as people gathering in the property that ADR operates.

(J-REITs are legally restricted from actual developments.)

 

Urban redevelopment properties acquired by ADR.

  1. Pianetta Shiodome
  2. RESIDIA Minami-Senjyu
  3. RESIDIA TOWER Kami-Ikebukuro
  4. Pacific Royal Court Minato Mirai Ocean Tower
  5. RESIDIA Tsutsujigaoka
Investments Towards Existing Urban Brownfield Redevelopment

By investing in existing urban brownfield redevelopment properties ADR contributes in the usage of existing infrastructures such as existing water, electricity supply system, public school facilities, etc.

Cooperation between the Sponsor Group Companies

ADR works together with ADIM’s sponsor group companies in various fields to lessen its environmental burden and contribute to local communities.

  1. Acquisition of sponsor group developed properties

   ADIM advises on the residential market to help sponsor group companies to succeed in developing flexible / mixed use properties that will satisfy ADR’s acquisition criteria.

  1. Property management

   The sponsor group property manager who manages the largest share of ADR’s properties cooperates with ADR not only in such measures as promoting energy savings but also in measures such as placing AED equipments in publicly accessible area, whereby contributing to local communities.

Others

ADR takes other environmentally friendly measures such as placing green open spaces on its property sites to alleviate heat island effect, paving the property grounds with interlocking paving blocks to lessen urban environment flooding and land subsidence.

Social Contribution

ADR conducts the following initiatives to increase tenants’ satisfaction which will lead to stabilize and improve profitability of its properties.

Tenant Satisfaction Surveys

ADR triennially conducts satisfaction surveys for tenants residing at RESIDIA branded properties.

 

Date of the survey

No. of Respondents

Total No. of People Surveyed

Response Rate

Total No. of Leasable Units

Survey Coverage

1

Between April to July 2014

3,106

14,155

21.9%

19,078

74.2%

2

Between Sept. to Nov. 2017

3,945

16,445

24.0%

20,842

79.0%

Tenants showed high satisfaction towards the location (for commuting ease, good local environment) and the quality (units’ atmosphere and design) of properties.

 

Tenant Services*

ADR offers a variety of services toward tenants residing in ADR’s properties to enhance tenant’s satisfaction to improve tenant retention rate. Examples of the services include “RESIDIA Customer Support” which is a support desk exclusively for tenants and “Moving Style,” offers discounts for tenants who are moving from one RESIDIA apartment to another.

*Please visit the RESIDIA website (http://www.residia.jp/) [Japanese only] for details.

Survey
Customer support
Moving Style
Application Service "RESIDIA"
Emergency Maps and Emergency Kits

On common area walls of properties, ADR puts up emergency maps (as of end of January 2019, 100% of properties (264 properties out of 264 properties )) which clearly indicate evacuation routes/sites to help ensure safety during the occurrence of a disaster as well as to raise disaster prevention awareness. (as of end of January 2017, 100% of properties. (257 properties out of 257 properties )  as of end of January 2018, 99.6% of properties .(260 properties out of 261 properties ))

Also in many of its “RESIDIA” branded residence, ADR distribute emergency kits free of charge to any tenant who wishes such kits.

Contributing to the Community

AEDs which are available for public use and vending machines that make charitable donations to address healthcare needs are installed in many of ADR’s properties. The vending machines will make a donation to a pediatric cancer treatment facility using part of the proceeds from the sales of its merchandise.

Installing AEDs
Donation capable vending machines
Sponsoring college student counterpart IR contest contest

Participated and sponsored “The Third University Student Counterfeit IR Presentation Contest” sponsored by the Student Investment Union (USIC) held in February 2019. In this contest, 13 investment circles of universities belonging to USIC are paired with 12 listed companies and evaluated by investor’s perspective, through interviews with the persons in charge and managers of the target company and material research, competed presentation.

Kokugakuin University (Team name: KISHU) who presented ADR won the championship. This is because the team explained (1) the special industry structure called J-REIT in an easy-to-understand manner, and (2) it was highly appreciated that the analysis was conducted with students’ own perspective.

Human Resource / Talent Development

Stable growth of ADR is dependent on the talents of ADIM’s personnel. The human resource and talent development strategy at ADIM is aimed at realizing that potential to the fullest.

Specifically, ADIM defines all the required technical and social skills for each level of work on which each employee will be evaluated according to his or hers achievements.

Also to have employees realize their potential and develop their career, they are able to declare their career path wishes. The declaration will be used to consider the optimal positions.

Additionally, ADIM is the only J-REIT asset management company to continuously hire new graduates.

*In accordance to the “Act on Investment Trusts and Investment Corporations” ADR outsources its asset management, custody, administration and etc.

  Likewise, ADR as a REIT is prohibited to hire employees

  無題

Main Data of Human Resource/Talent Development

 

【Coverage】 Full-time employees and contract employees

 

FY2014

FY2015

FY2016

FY2017

FY2018

Total No. of Employee ※1 

56

60

63

67

61

 Male

46

48

50

53

50

 Female

10

12

13

14

11

 Female Ratio to All Employees

17.9%

20.0%

20.6%

20.9%

18.0%

Average Years of Service

5 years 12 months

6 years 3 months

6 years 10 months

7 years 5 months

8 years 1 months

 Male

5 years 10 months

6 years 2 months

6 years 10 months

7 years 7 months

8 years 3 months

 Female

7 years 2 months

6 years 4 months

6 years 8 months

6 years 11 month

7 years 6 month

Total No. of New Hires

8

5

4

5

2

 Male

6

3

3

3

2

 Female

2

2

1

2

0

Turnover Rate ※2 

5.4%

3.3%

4.8%

9.0%

4.9%

Workstyle Reforms・Diversity

FY2014

FY2015

FY2016

FY2017

FY2018

Ave. Over-time hours

25:36

23:46

18:47

16:29

17:31

Paid Vacation Acquisition Rate

67.3%

68.2%

78.0%

77.2%

79.9%

 Female Executive Ratio

9.1%

10.0%

12.5%

0.0%

0.0%

Female manager Ratio

0.0%

0.0%

0.0%

0.0%

0.0%

 Childcare leave system user

1

4

2

1

1

 Childcare short-time work system user

1

1

3

2

1

Employee health and safety

FY2014

FY2015

FY2016

FY2017

FY2018

Regular medical examination rate

100%

100%

100%

100%

100%

Occupational accident frequency rate

※3

0.00

0.00

0.00

0.00

0.00

 

※1     Number of employees at the start of the fiscal year.

※2 Turnover rate is calculated by dividing the number of employees leaving the company by the initial number of employees at the start of the fiscal year.

     Additionally, there were no employment terminated due to corporate merges, acquisition or restructuring or other reasons.

※3 Occupational accident frequency rate is calculated by dividing past working hours by the number of casualties caused by disasters and multiple 1 million hours  

             For details, please refer to here.

   

 

Human Resource / Talent Development

At ADIM, the company offers to its employees various career development, degree and qualification acquisition training, and training.

For career development, Regular performance appraisals and feedback, only regular employees are eligible, and for support for degree programs and certifications,
Full-time employees and contract employees are eligible.

Employee initiatives of ADIM are disclosed to the ADIM’s homepage.

Career Development

At ADIM, the company offers its employees various programs to develop their talent and career. 

Also, employee are asked annually to declare their desired career oath and discuss with their supervisor/

New graduates will be rotated through departments for the first five years or so and will be able to accumulate various work experiences. Moreover, new graduates will have, in addition to a senior colleague instructor, a colleague that will act as a mentor who the new graduates may consult on various subjects.

 

Regular performance appraisals and feedback processes

Full-time employees are under subject of annual performance review.

Each individual employee will discuss with his/her reporting superior and agree on a performance goal at the beginning of the fiscal year. Progress will be reviewed and advises will be given at the mid-term review. At the end of the fiscal year, performances will be evaluated and evaluation fed back. Salaries and bonuses will be decided based on the evaluation. In addition to individual performance evaluation, bonuses are partly linked to the performance of ADR.

These Individual performance review sessions are not only used to feed back evaluations but also to discuss future career development plans.

Support for degree programs and certifications

For an example, ADIM provides courses or subsidies to attend classes offered at Keio Marunouchi City Campus, Globis Excective School or Language school to develop business and language skills.

And ADR collaborated with Faculty of Science and Engineering,Waseda University in collaboration with industry and academia, and collaborated on prolonging housing life to improve sustainability. 

Also ADIM recommends employees to acquire certifications to improving business performances and acquiring expertise. 

ADIM provides subsides for expenses to assist to obtain the certifications.

 

※Status certifications

 

Certification

No.

Real Estate Notary

30

ARES Certified Master

43

Certified Building Administrator

3

First-Class Architect

4

Securities Analysts

4

Certified Public Accountant

2

U.S. CPA

1

Labor and Social Security Attorney

1

Certified Internal Auditor

1

CASBEE architecture evaluation members

1

 

 

Implementation of qualification acquisition assistance

ADIM recommends acquisition of certifications aiming at improving business performance and acquiring expert knowledge. And for the support of acquiring certifications, the investment company provides assistance for expenses etc.

Examples of certifications that ADIM subsidies the cost of obtaining

Real Estate Notary, ARES Certified Master, Securities Analyst, Authorized Real Estate Consulting Master,Certified Building Administrator, etc.

Job-Specific Development Training Programs

ADIM has established a wide range of training systems and self-development support systems according to positions.

Target Category Overview Managers General
Staff
Non-regular employees Time/No.
Managers Training for Newly Appointed Officer Responsibility and Role Recognition Required for Executives 1 6
Training for Newly Appointed Managers

Program to train Newly Appointed Managers 

4 36
General
Staff
Next Manager Training Management training 2 8
Next Generation Business Leader Training Leadership training 2 16
Young Training Training for employees who work for the fourth year since joining the company 3 8
Instructor Training Instructional training for newly employees 3 16
New Employee Training Basic training for newly employee (ITOCHU Group) 3 48
Bookkeeping Training Training for fundamental understanding of bookkeeping for new employees 3
OA Training New employee training, some young employee 4 16
Mentor Employee System Support system by senior employees (company bears expenses) 6
Carrier Declaring System System that can declare desired career 39
Overall Training · Self-Development Compliance Training and Testing Training on overall compliance ( including human right ) Executed by all executives and employees. In principle, once in a month compliance tests are conducted separately from the training Total 437    
Sustainability Training and Testing

Training aimed at raising  the awareness of executives and employees

31 27 6
Business Efficiency Improvement Training Excel macro · VBA training 7 20 16
Internal Study Group In-house study group held independently by each department (related to interest rate trends by inviting analysts, overview of accounting and tax system reform in real estate transactions etc.) Much implementation
Business School Commuting School Self-Development Aid Case method style training at “Keio Marunouchi City Campus”, a Keio University social worker training institution 1 1 18
Cafeteria Style Training Training by e-learning · correspondence education centering on ITOCHU business professional course (free choice from about 200 courses such as management, business skills, language, qualification, communication, PC skills etc.) 4 26 4
Training for examinations of Real Estate Notary Internal training for applicants 0 7 1 15
Qualification Acquisition Support System A system that a company subsidizes expenses related to acquisition of qualifications aiming at improving business performance and acquiring expertise. 2 10
Language Learning Support System A system in which the company partially subsidizes expenses for language classes for the purpose of improving the language skills necessary for business 2 2 65

System Development

Of the following plans, formal grievance reporting or escalation procedures, company trips, and other employee benefits will be eligible for all employees.
In addition, regular holidays and leisure systems, short-time work regimes, regular employees and contract employees are eligible.
Other than that, regular employees are eligible.

Introduction of Employee Investment Unit Ownership Program

ADIM introduced an employee investment unit ownership program, the first for a J-REIT asset management company to align ADIM employees’ interest to ADR’s unit-holders’ interest and improve the level of company benefits of ADIM employees.

For details, please refer to here.

Formal grievance reporting or escalation procedures

ADIM believes Formal grievance reporting or escalation procedures is essential to encourage the reporting of misconduct, fraud and corruption. Therefore ADIM has established whistleblowing system with three internal and three external third-party hotlines.

Labor relations

ADIM respects the basic rights of our employees regarding the freedom of association and collective bargaining.

ADIM continuously holds appropriate and sound labor-related discussions with worker representatives.

Non-compensation benefits

■Membership to cafeteria-style benefit package

The cafeteria-style benefit package offer employees preferential rates on various activities, for example hotel rates, local fitness facility fee, movie tickets, supporting employees’ leisure time activities and promoting physical and mental health.

■Financial support for congratulations and condolences

We congratulate our employees on their joyful events and offer condolences on their sad occasions.

■Employment beyond retirement

Although retirement age is set at sixty years old, eligible employees may be re-employed on yearly renewable contract bases.

■Company trips

To promote friendship among our employees, we organize annual company trips to resorts for one to two night stay.

■Other employee benefits

・Recreational Clubs

 The company provides financial support to recreational clubs which employees have formed and which are actively participated.

・Company Gatherings

 We organize annual, fiscal year end party to celebrate on everybody’s hard work.

 There is also a monthly in-house gathering held during work hours where snacks, meals and drinks including alcoholic beverages are served. It is intended to promote closer ties between employees in different section of the company.

Work-life Balance Initiatives

ADIM has been introducing the following measures to improve employee’s work-life balance.

To enable employees to flexibly accommodate with their responsibilities to their family depending on their life stage or the way they want to relate to society, ADIM has introduced paid-leaves and other employment schemes. There are childcare leave and shortened work hours for employees with small children, nursing leave for employees with dependents in need of nursing, volunteering leaves for employees who wants to individually contribute to society and hourly based paid vacation to promote the usage of paid vacation.

Additionally, in 2013, to promote productive work routines we have designated every Wednesday as “No-overtime day” and make every employee leave work on time. As a result, the average over-time hours per month have drastically decreased, as shown on the table below.

 

Based on these measures, ADIM has applied to the Tokyo Metropolitan Government to be approved as “TOKYO Working Style Reform Declaration Company” in March 2018 and has become the first J-REIT asset management company to be approved.

Company monitors employee satisfaction on a regular basis

ADIM periodically conduct employee satisfaction survey to improve the workplace environment so that each employ can feel pride and pleasure working for the company.

Human Resource / Talent Development at the Sponsor Company

Itochu Corporation, the sponsor of ADIM, acknowledges that human resources are its greatest management asset to support the growth of the company and addresses aggressively on talent development. Please refer to details here.

Also Itochu Corporation introduces the Four-day internship for students before official employment. 

Itochu Corporation also carries out initiatives to ensure the health and safety of employees at workplaces. which are open for participation to group companies such as ADIM. Please refer to details here.

DBJ Green Building Certification* Awarded

ADR has seven properties which was awarded the DBJ Green Building Certificate. (16.7% of total floor space, 2.7% of total number of property as of January 2019)

*Certification Rank of the 7properties are as follows. (As of March 4, 2019)

 P-50 RESIDIA Nishi-Azabu / Four Stars

 P-55 RESIDIA TOWER Meguro-Fudomae / Three Stars

 P-62 RESIDIA TOWER Azabujuban / Four Stars

 P-76 Park Tower Shibaura Bayward Urban Wing / Four Stars

 C-65 RESIDIA TOWER Kami-Ikebukuro / Three Stars

 S-20 Pacific Royal Court Minato Mirai Ocean Tower / Four Stars

 R-30 RESIDIA Izumi / Three Stars

 

 Four Stars … Properties with exceptionally high environmental and social awarene

Three Stars … Properties with excellent environmental and social awareness

 

**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.

https://www.dbj.jp/en/service/finance/g_building/index.html

http://igb.jp/en

 

 

 

 

 

 

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

Awarded BELS Certification for RESIDIA Ochanomizu Ⅱ in March 2019.

For further information on the “BELS”, please refer to their website.

https://www.hyoukakyoukai.or.jp/bels/info.html (Japanese Only)

GRESB Assessment Participation

In 2014 ADR became the first residential J-REIT to participate in the GRESB* Assessment.

In the last three years it has been consecutively awarded a “Green Star” rating and a GRESB rating of “3 Star”
where “5 Star” is the best. “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.

Working of 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**.

Although the year 2018 was excluded, the ESG rating of this index improved from B to BB.

The index is designed to target 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.

Participation of RobecoSAM's CSR rating evaluation

Since 2018 RobecoSAM, which is responsible for the stock rating agencies of the Dow Jones Sustainability Diversified Index series
ADR aimed to acquire the CSR rating of the company, and received evaluation for the first time as a residential J-REIT.

MUFG ESG Rating Certificate 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 MURC. This rating intends to evaluate J-REITs’ initiatives and implementations on ESG (E: Environmental, S: Social, G: Governance) issues based on the items originally selected by MURC with services provided by JCR. It assigns the rank to each J-REIT that applies the evaluation and provides the feedback for improvement.

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

Corporate Governance

Corporate Governance and Compliance Framework

In an effort to manage risks, to comply to laws and regulations and to Insure Fair Handling of Transactions with Conflict of Interests, ADIM which manages ADR’s assets makes clear its commitment to fiduciary duty and has established frameworks and committees (investment and compliance committee) to oversee its executions.

 

Please refer here on details of the compliance framework.

Please refer here on measures to Insure Fair Handling of Transactions with Conflict of Interests.

Sustainability Committee

ADIM has established a sustainability committee in order to institutionally take measures to improve sustainability. The committee will meet once every quarter to set targets, decide on measures, monitor external ratings on its ESG performance and monitor its progress on reaching the targets thereby improving its long-term asset value. The targets set by the committee will be authorized by the Representative Director and semi-annually report to the board of directors on its progress.

 

Established a Sustainability Team

In ADIM, in April 2019, we established a “Sustainability Team” to promote sustainability improvement activities.
The team has been established to run the Sustainability Promotion Committee and aim to improve the asset value over the medium and long term.
In addition, the team is assigned a dedicated employee.

Structure on the Management Fee Structure

 

The asset management fee paid from ADR to ADIM is calculated as shown on the table below.

In accordance to the article of incorporation of ADR and asset management entrustment contract, the fee will in part be linked to NOI and net income per unit to strengthen the alignment of the ADIM’s interest to unit-holders’ interest.

 

 

 無題2

 

 

Disclosure

In order to ensure transparency to its disclosures, in addition to statutory disclosures ADR will accurately disclose on timely bases useful and valuable information. The information will be disclose in addition to listing on the Tokyo Stock Exchanges disclosure system (TDnet), it will be press released as well as be listed on its own website.

Please refer here for the disclosures.

Please refer here(in Japanese) for informations on investor meetings and conferences.

 

2018 Investor Relations Activities

Types of Meetings/Conferences

No. of meetings attended

Individual Investor Conference Attendance

26

Institutional Investors

Fiscal Period Conference Call

2

Conference Attendance

6

One-on-one Meetings with Institutional Investors

188

Legal and Regulatory Restrictions
  1. The executive director and the supervisory directors of ADR are not allowed to transact ADR units for itself or for a third-party in accordance to ADR’s bylaw on insider trading.
  2. If the executive director and the supervisory directors of ADR commit illegal or improper acts or make improper profits, they are punishable not only by law but also by ADR’s bylaw by claw back rule on compensations.
  3. Rights of unit-holders are defined in the “Act on Investment Trust and Investment Corporations” and “Articles of Incorporation of Investment Corporation”. For detail please refer to ADR’s financial report (in Japanese only) submitted to Financial Services Agency.
  4. The compensation to the directors of ADR is restricted by the Articles of Incorporation of ADR, in which payment rules (monthly payment limit and the actual amount to be paid to which the board may decide according to the movements in inflation and other economic situation) are laid down.
Sponsor's sustainability policy

ITOCHU Corporation, the main sponsor of ADIM, has formulated the “Sustainability Action Plan” by extracting the important issues on sustainability by defining the direction of sustainability as the “Basic Policy of Promotion Sustainability”. And they promote sustainability by holding a reviewing meeting semi-annually to put the program under the PDCA cycle system.

For details, please refer to here.

Measures Taken by the Asset Management Company

 AD Investment Management Co., Ltd., the asset management company, also takes various sustainability measures in managing ADR’s assets.

(e.g.) Establishing compliance and risk management regimes, installing stricter decision making processes, strengthening resiliency against disasters, acquiring DBJ BCM ratings* and Resilience Certification*2, improving employee satisfaction,  Creating a comfortable working environment and promoting employee health( Declare  a health company and obtain proof of declaration*3)  etc.

 

* Please view the following site for further details on DBJ BCM ratings.https://www.dbj.jp/en/service/finance/risk_manage/index.html

The Asset Management Company has acquired DBJ BCM ratings multiple times and awarded the highest “DBJ BCM “ rating on 2017 certification.

 

~Points of Evaluation~
(1) Bolstering of BCP has been  included as one of  the objectives of the medium-term management plan and along with having to carry out a review of existing plan, BCM is led by the top management.
(2) Improving the response capability of each departments and allocating sufficient personnel resources to essential operations.
(3) Utilizing outside consultant to carry out trainings on initial response to strengthen the effectiveness of the BCP and planning a medium-term training program going forward.

 

*2 Please view the following site for further details on Resilience Certification. http://www.resilience-jp.biz/certification/about/ (Japanese only)

ADIM will be the first company among the J-REIT asset management company to have its social contribution aspect evaluated to acquire the Resilience Certification.

 

*3 Please view the following site for further details on Declaration. http://www.kprt.jp/health/(Japanese only)

Health company declaration means the company itself declares to tackle health promotion through out the company with the aim of becoming a health-conscious enterprise and the health insurance society supports that.