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 equipment 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 sustainability initiatives that ADR has been conducting.

Determining Materiality

We have identified our materiality using the following methodology.

  • Step1  Identify

We have identified issues for consideration from wide range of issues concerning economy, environment and society by referring to guidelines from GRI Standards and external evaluations (GRESB, DJSI, MSCI ESG, etc.)

  • Step2  Prioritize

We determined nine issues to be material among the identified issues, for consideration by evaluating and ranking the potential impact on ADR and the level of stakeholder’s concern regarding the issues.

  • Step3  Authorize

The nine issues that have been identified as material at our sustainability committee, have been authorized by our Representative Director as issues material to ADR’s initiatives in promoting 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.

 

Issues Identified to be Material to ADR

Related SDGs

Environmental Issues

Extending service life of properties under management

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 to extend turnover period

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

ADR’s properties will be managed with environmental consideration through the following measures.

  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 clauses
  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, 3 properties (1% of portfolio) have parking lots for car sharing.

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

Environmental Targets and Results (energy consumption, CO2 emissions, water usage and waste volume)

Establishing Policies

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.

 

Environmental Targets

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

Short-term Target

Long-term Target

Energy Consumption

 1% annual intensity reduction

5 year (FY2014 through FY2019) /

5% total reduction in intensity

GHG Emission (CO2)

1% annual intensity reduction

5 year (FY2014 through FY2019) /

5% total reduction in intensity Note

Water Usage

 avoid increase in intensity

5 year (FY2017 through FY2021) /

avoid increase in intensity

Waste Volume

 avoid increase in intensity

5 year (FY2014 through FY2019) / 

avoid increase in intensity

Note : The reduction target is the same for both Scope1 and Scope2.

 

   

Total Usage

(MWh)

FY2014

FY2015

FY2016

FY2017

FY2018

Intensity

(MWh/m2)

Actual

Same Store

Coverage

Energy

Consumption

Electricity

20,469

19,495

21,937

20,957

21,632

21,480

21.6%

0.0226

0.0205

0.0230

0.0215

0.0222

0.1034

Fuel

1,540

1,715

1,574

1,718

1,827

1,803

21.6%

0.0018

0.0018

0.0017

0.0019

0.0020

0.0093

District Heating and Cooling

2,854

3,208

3,077

3,256

3,228

3,228

100.0%

0.0704

0.0792

0.0759

0.0803

0.0797

0.0797

 

   

Total Usage

(t)

FY2014

FY2015

FY2016

FY2017

FY2018

Intensity

(t/m2)

Actual

Same Store

Coverage

GHG

Emission

(CO2)

Total

10,337

11,783

12,547

24,830

25,975

25,727

24.0%

0.0114

0.0124

0.0132

0.0252

0.0266

0.0410

Direct Emission

(Scope 1)

233

292

289

298

323

319

37.7%

0.0003

0.0003

0.0003

0.0031

0.0034

0.0089

In-direct Emission

(Scope 2)

10,104

11,491

12,258

11,854

12,205

12,122

24.3%

0.0112

0.0121

0.0129

0.0122

0.0125

0.0518

Scope 3 Note

-

-

-

12,678

13,447

13,287

65.1%

-

-

-

0.0130

0.0138

0.0212

Note: Calculated by multiplying the amount of garbage discharged at the property by incinerator emission factor.

 

   

Total Usage

(m2)

FY2014

FY2015

FY2016

FY2017

FY2018

Intensity

(m2/m2)

Actual

Same Store

Coverage

Water Usage

140,987

154,546

193,347

199,537

208,277

201,383

25.0%

0.1557

0.1628

0.2027

0.2051

0.2136

0.8400

 

   

FY2014

FY2015

FY2016

FY2017

FY2018

Actual

Same Store

Coverage

Waste

Volume

Total Amount

(t)

-

2

5,934

6,436.4

6,837.4

6,795.6

65.1%

Intensity

(t/m2)

-

0.0000

0.0062

0.0066

0.0070

0.0069

Recycling Rate

(%)

-

0.0%

13.4%

17.7%

17.6%

17.6%

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)  ”Same Store” only compares properties that have annual data for both 2017 and 2018 on energy consumption / GHG emissions / water usage / waste volume. Properties were excluded if they have been newly acquired, disposed, developed,  renovated, or if the properties’ data acquisition rate vary between the reporting period.

     (3) “Coverage” is calculated as follows.
           Total Floor Space of Data Collected (m2) ÷ Total Property Floor Space (m2)

Setting Green-lease Contract Clauses

44.2% of tenants are under leasing contract with clauses concerning energy and water conservation (green-lease contract) as of January 2018

Also ADR will insert green lease clause in the management consignment contract with property manager at the time of future consignments and contract renewals.

And based on the contract, ADR has 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.

Since FY2016, to strengthen the engagement with suppliers, major suppliers including all property management companies that ADIM uses as a vendor have been evaluated by conducting surveys at the start of the contract and annually in accordance to the policy, on how they are addressing sustainability issues.

Since we believe it is important to have our major suppliers’ understanding and cooperation, on FY2017 we have re-notified our Green Procurement Guideline to our major venders, property management companies and building management companies.

Urban Area Investments

By investing in various kinds of urban properties, ADR promotes the reduction of environmental burden and contribute to the revitalization of cities and communities.

Investments in Flexible / Mixed Use Properties

ADR invests in flexible/mixed use properties (as of January 2019, 76 properties, 28% of the portfolio), thereby contributing in reducing environmental impact, revitalizing the area and providing convenient facilities to tenants and local residents. In addition, those flexible /mixed use properties have stores and squares open to public which contributes to the revitalization of the cities and the communities, by providing places for people gather.

The flexible / mixed use properties that ADR invests 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 stores attached.
  2. Properties with open space which are publicly accessible. (As of January 2019, 7 properties (3% of portfolio))
  3. Universal design properties that are accessible to 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 re-zoned, lands are more highly utilized and properties within the redevelopment will draw in people to the community thereby revitalizatizing the area.

(There are legal restrictions to the amount of development that J-REITs are allowed to do.)

 

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 supply systems, electricity grid, public school facilities. It will also prevent urban sprawl which will save energy involved in commuting and prevent development of green lands.

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.

Other Initiatives

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 inner-city flooding and land subsidence.

Social Contributions

ADR conducts the following initiatives to increase tenants’ satisfaction which will 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, in 100% of its 264 properties). indicating evacuation routes to evacuation sites which help to ensure safety during the occurrence of a disaster as well as to raise disaster prevention awareness (as of end of January 2017, 100% of 257 properties and as of end of January 2018, 260 properties, 99.6% of 261 properties were equipped with the maps.

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

Contributing to Local Communities

In many ADR’s properties, AEDs are available for public use and vending machines that make charitable donation to a pediatric cancer treatment facility using part of the proceeds from the sales of its merchandise are installed.

Installing AEDs
Donation capable vending machines
Sponsoring College Student Investment Presentation Contest

Sponsored and participated in “The Third University Student Investment Presentation Contest” organized by the Student Investment Union (USIC) held in February 2019. In this contest, 13 investment clubs of universities belonging to USIC were each assigned to one of the 12 listed companies participating. The clubs were to evaluate the assigned company with an investor’s perspective through interviews with the target company’s personnels and by researching the company’s disclosure materials, and make a presentation on what they have discovered.

Coincidently, Kokugakuin University team who was assigned ADR, won the contest.

By sponsoring such events, we believe that we were able to contribute in promoting investment literacy among students.

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 their 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 and use the evaluations to hire, train and promote employees.

To help employees realize their potential and develop their career, they are able to declare their career path wishes. The declaration will be used to consider optimal assignment of positions.

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

 

* In accordance to the “Act on Investment Trusts and Investment Corporations” ADR outsources its asset management, custody, administration and     prohibited to hire employees, other than executive directors and supervisory directors.

 

human resource development

 

Human Resource / Talent Development Statistics

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 Total

17.9%

20.0%

20.6%

20.9%

18.0%

Average Years of Service

5 yrs 12 mths

6 yrs 3 mths

6 yrs 10 mths

7 yrs 5 mths

8 yrs 1 mth

  Male

5 yrs 10 mths

6 yrs 2 mths

6 yrs 10 mths

7 yrs 7 mths

8 yrs 3 mths

  Female

7 yrs 2 mths

6 yrs 4 mths

6 yrs 8 mths

6 yrs 11 mths

7 yrs 6 mths

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 Work-hr. User

1

1

3

2

1

Employee health and safety

FY2014

FY2015

FY2016

FY2017

FY2018

Annual Medical Exam 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.
*2 Additionally, there were no employment terminated due to corporate merger, acquisition or restructuring or other reasons.
*3 Occupational accident frequency rate = number of casualties caused by disasters ÷ total working x 1 million hours.
     For details, please refer to here.

Human Resource / Talent Development

At ADIM, the company offers its employees various career development, help for attaining degrees and certifications, and other trainings.

Only full-time employees are eligible for help in career development, regular performance appraisals and feedback. On the other hand, both full-time employees and contract employees are eligible for support programs on attaining degrees and certifications.

Career Development

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

For an example, the company provides courses or subsidies to attend classes offered at Keio Marunouchi City Campus, Globis University Graduate School of Management or English language classes to develop business and language skills.

Also, employees in a non-managerial position are asked annually to declare their desired career path and discuss with their superior.

 

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, bonuses will partly be linked to the fiscal performance of ADR.

These Individual performance review sessions are not only used to feed back evaluations and discuss future career development plans but used to devise human resource allocation strategies.

Support for Attaining Degrees and Certifications

ADIM provides courses offered at Keio Marunouchi City Campus, Globis Excecutive School or language schools to help employees develop business and language skills.

 

Also ADIM recommends employees to acquire certifications to improve business execution ability and acquire expertise.

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

 

No. of Employees with Certifications

Certification

No. of Persons

Real Estate Broker License

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 Member

1

Subsidizing Acquisition of Certification

ADIM recommends employees to acquirecertifications to improve business execution abilities and gain expertise and give assistance to the effort by subsidizing the expense of obtaining the certifications.

 

Examples of subsidized certifications;

Real Estate Broker License,

ARES Certified Master,

Securities Analyst,

Authorized Real Estate Consulting Master,

Certified Building Administrator, etc.

Job-Specific Development Training Programs

ADIM has in place a wide range of training progams and self-development support systems according to the employee’s position.

Position

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

4th Year Training

Training for employees who work for the fourth year since joining the company

3

8

Instructor Training

Instructor training for employees designated as instructor of new grad employees

3

16

New Employee Training

Basic training for new employee (ITOCHU Group)

3

48

Accounting Training

Training for basic understanding of accounting 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 Path Declaration System

System that can declare desired career

39

Overall Training  / Self- Development

Compliance Training and Testing

Training on overall compliance ( including human right )

All executives and employees must attend the training.

Apart from the training, compliance tests are conducted once a month, in principle.

Total 437

 

 

Sustainability Training and Testing

Training aimed at raising  the awareness of executives and employees

31

27

6

Business Productivity Improvement Training

Excel macro · VBA training

7

20

16

Internal Study Group

In-house seminars held by each department (inviting lectures that are experts in the field, ie. tax law, interest rate market, etc.)

Held constantly

Aiding Self-Development by Commuting to Business School

Aiding the cost of attending adult education provided by Keio University

1

1

18

Cafeteria Style Training

Business professional e-learning course provided by ITOCHU.

(freely select from over 200 courses such as management, business skills, language, qualification, communication, PC skills, etc.)

4

26

4

Training for examinations of Real Estate Broker License

Internal training for applicants

0

7

1

15

Qualification Acquisition Support

ADIM subsidizes expenses related to acquisition of specified qualifications.

2

10

Language Learning Support

ADIM subsidizes expenses for language classes for the purpose of improving the language skills necessary for business.

2

2

65

Employee Welfare Programs

Of the following programs, all employees are eligible to take part in grievance reporting and escalation procedures, company trips, and other employee benefits.

In addition, full-time employees and contract employees are eligible for paid holidays, other leaves and shortened work hour schemes.

Rest of the than thatprograms are for, regularfull-time  employees are eligible.

Employee Investment Unit Ownership Program

ADIM has started an employee investment unit ownership program. It was the first J-REIT asset management company to align ADIM employees’ interest to ADR’s unit-holders’ interest using the ownership program and also be financially beneficial for ADIM employees.

 

For details, please refer here.

Formal Grievance Reporting and Escalation Procedures

ADIM believes Formal grievance reporting and 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.

Welfare Programs

■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.

■Congratulatory and Condolence Payments

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

■Extended Employment

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

■Company Trips

To promote collegiality 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. The clubs are actively participated by employees.

・Company Gatherings

We organize 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 thier community, 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 their community 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.

 

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.

Periodical Monitoring of Employee Satisfaction

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 company asset to the growth of the company and addresses aggressively on talent development. Please refer to details here.

Also at Itochu Corporation, there is a four-days internship program in  the new graduate hiring procedure in which prospective new hires are expected to participate 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 the 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 / Four 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 awareness

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

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)

Participation in GRESB Assessment

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 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.

ADR was designated as“Residential/Asia/Listed Sector Leader” which indicates that ADR earned the top score within the “Residential/Asia/Listed Sector.

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.

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 B to BB.

 

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.

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.

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 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)

Corporate Governance

Corporate Governance and Compliance Framework

ADIM which manages ADR’s assets, has established a corporate governance framework by setting up investment and compliance committees to oversee the execution of corporate governance and defined its commitments to its fiduciary duty. 

With the framework in place, ADIM endeavors to manage risks, to comply to laws and regulations and ensure fair handling of transactions with conflict of interest, 

Please refer here for details on 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 reported to the board of directors on its progress.

Established a Dedicated Sustainability Team

In ADIM, in April 2019, we established a dedicated “Sustainability Team” to promote activities to improve sustainability.

 

The team has been established to run the Sustainability Promotion Committee and aims to improve the asset value of ADR over the medium and long term.

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 disclosure transparency, in addition to statutory disclosures, ADR will disclose information it deems useful and valuable on timely bases in an easy-to-understand form. Specifically, ADR will actively disclose information on its website in addition to disclosing on the Tokyo Stock Exchanges disclosure system (TDnet).

 

Please click here to read 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 by accordance to ADR’s bylaw on 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 the Financial Services Agency.
  4. The compensation to the directors of ADR is restricted by the Articles of Incorporation of ADR, in which payment rules are laid down.
Sponsor's Sustainability Policy

ITOCHU Corporation the main sponsor of ADIM, has defined its direction on promoting sustainability in the “Basic Policy of Promotion Sustainability” and has formulated the “Sustainability Action Plan” which identifies important issues on sustainability. And they promote sustainability by holding a review board semi-annually to put the program under the PDCA cycle system.

 

For details, please refer 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 strict decision making process, strengthening resiliency against disasters, acquiring DBJ BCM ratings1 and Resilience Certification2, improving employee satisfaction, creating a comfortable working environment and promoting employee health (made a Health Conscious Company Declaration and obtained a proof of declaration3).

  1. Please view the following site for further details on DBJ BCM rating.
    https://www.dbj.jp/en/service/finance/risk_manage/index.html
  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 the declaration.
    http://www.kprt.jp/health/(Japanese only)
    Health Conscious Company Declaration sponsored by health insurance associations, means the company itself declares to tackle health promotion through out the company with the aim of becoming a health-conscious enterprise.