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 examples 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.




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


Linking asset management fee to fund’s performance

8, 17


Environmental Considerations

Environmentally Conscious Asset Management
  1. Installing LED lighting
    As of January 2018, LED lighting is installed in 48 properties (22% of portfolio).
  2. Installing water-saving toilets
  3. Installing heat shielding paint roofing
  4. Introducing car sharing in parking lots of properties
  5. Encouraging tenants to conserve energy usage through posters on common area billboards and periodical “RESIDIA News” and sending of sustainability guides
  6. Leasing contract with clauses concerning  energy and water conservation (green-lease contract) to 36.7% of tenant contracts as of February 2018
  7. Extending the lifespan of properties through large-scale repairs and value-enhancement renovations
  8. Including a criterion concerning initiatives taken on environment in selecting a property manager
  9. Working together with building managers towards shared goals on environmental concerns
LED lighting installation


Installation of water conserving toilets

RESIDIA Roppongi-Hinokichokoen

Heat-shielding paint roofing

RESIDIA Shibaura

Energy Conserving Encouragement Poster
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


Equipment renewals and upgrades

RESIDIA Kamimeguro

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 FY2015.

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.

Targets on Reduction of Energy Consumption and Greenhouse Gas (CO2) Emission and Water Conservation and Waste Management

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.



Reduction Target

Short-term Target

Long-term Target

Energy Consumption


Annual intensity

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

GHG Emission (CO2)



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

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 are 1% target reduction.




Total Usage



















(FY2017, %)







Energy   Consumption





















District Heating   and Cooling













Total Usage

( t)






(FY2017, %)


(t/m2 )

GHG   Emission












Direct Emission

(Scope 1)










In-direct Emission

(Scope 2)






Scope 3












Total Usage
























(FY2017, %)







Water   Usage


















(FY2017, %)

Waste   Volume

Total Amount













Recycling Rate











  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)



Investments in Flexible/Mixed Use Properties

ADR invests in flexible/mixed use properties, thereby contributing in reducing environmental impact, revitalizing the area and providing convenient facilities to tenants and local residents. 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.
  3. Properties that are barrier-free towards senior citizens.
Investments Towards Existing Urban Area Properties

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

Investments Towards Urban Redevelopment Properties

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

(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
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 environmentally friendly measures taken

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


Between April to July 2014







Between Sept. to Nov. 2017






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 tenants 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 ( [Japanese only] for details.

Customer support
Moving Style
Emergency Maps and Emergency Kits

On common area walls of properties, ADR puts up emergency maps (as of end of January 2018, 99.6% of properties (260 properties out of 261 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 2016, 99.6% of properties .(250 properties out of 251 properties )  as of end of January 2017, 100% of properties (257 properties out of 257 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

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


Training, Talent and Career Development

Highly specialized knowledge and experience is required in management and investment of commercial real estate. Therefore at ADIM, we not only constantly hire highly skilled personnel but also provide trainings to further develop their expertise.

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

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 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 sustaninability. 

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.


Examples of certifications that ADIM subsidizes the cost of obtaining:

Real Estate Broker License, Real Estate Securitization Master Certificate, Securities Analyst Certificate, Real Estate Consulting Master Certificate, Building Administration and Management Certificate, etc.


Examples of training courses:

  • New Graduates: New Graduate Orientation, Basic Office Equipment Training, etc.
  • All employees: Compliance Training, Management and Marketing Training, etc.
  • Seminars and training held for specific department: Periodically inviting analyst to lecture on interest rate trends, real estate taxing and accounting, tax regulation, etc.



No. of Hours Spent on Education and Training per Employee*

11.4 hours

8.9 hours

Cost of Education and Training per Employee



  • *Hours spent between April 2017 to March 2018.
  • *Excluding hour spent on below leadership development training.
  • *Data for total of 35 people that are full-time employee that are not in a managing position (excluding loan employees).
Leadership Development Training

ADIM believes that the quality of managers of each business units are crucial to the performance the company.

Therefore the company actively sends managers and prospective managers to third party training courses.





No. of Hours Spent on Education and Training per Employee*

14.3 hours

- hours

Cost of Education and Training per Employee



  • *Hours spent between April 2017 to March 2018.
  • *Excluding hour spent on below leadership development training.
  • *Data for total of 23 people that are full-time employees that are in a managing position (excluding loan employees).
Performance Review and Feedback System

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.

Conducting Periodical Employee Satisfaction Survey

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

Employee 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 employees 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.


Fiscal Year

Ave. Over-time hours

per month














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.

Employment Stats





Total No. of Employees *1












Total No. of New Hires












Turnover Rate *2




Paid Leave Acquisition Rate




  • *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 mergers, acquisition or restructuring or other reasons.

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.

Whistleblower Protection

ADIM believes whistleblower protection 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.

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 Three-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 was awarded the DBJ Green Building Certificate for three properties on March 2015 and most recently two more properties were added on August 2017 making the total to 7 properties** (16.9% of total floor space, 2.7% of total number of property as of January 2018). As a result, ADR has the most properties*** awarded among the residential J-REIT.

Moreover, the awarded property ‘Park Tower Shibaura Bayward Urban Wing” has the highest ranking certificate among all residential properties with a DBJ Green Building Certification.

* 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.


** Certification Rank of the 5 properties are as follows. (As of March 3, 2017)

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 / Five Stars

C-65 RESIDIA TOWER Kami-Ikebukuro / Three Stars

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


Five Stars … Properties with the highest environmental and social awareness

Four Stars … Properties with exceptionally high environmental and social awareness

Three Stars … Properties with excellent environmental and social awareness

*** Based on materials published by DBJ as of January 31, 2018.

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.

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.

  • 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 Robeco SAM, 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.

Corporate Governance

Corporate Governance and Compliance Framework

In an effort to manage risks, to comply to laws and regulations and to prevent impropriety through conflict of interest, 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 how ADIM manages conflict of interest.

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.


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.







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.


2017 Investor Relations Activities

Types of Meetings/Conferences

No.of meetings attended

Individual Investor Conference Attendance


Institutional Investors

Fiscal Period Conference Call


Conference Attendance


One-on-one Meetings with Institutional Investors


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 CSR Promotion Policy”. 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*, improving employee satisfaction, etc.

* Please view the following site for further details on DBJ BCM ratings. (Japanese only)

The Asset Management Company has acquired DBJ BCM ratings multiple times and awarded the highest “DBJ BCM “ rating on 2016 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.