Environmental Considerations

Environmental Considerations

Environmentally Conscious Asset Management

Through the renewal of facilities in investment properties and collaboration with business companies that have business relationships with ADR, we are progressively implementing energy-saving, water-saving, and other environmentally friendly initiatives in all properties we own.

a. Extending the lifespan of properties through large-scale repairs and value-enhancement renovations
b. Installing LED lighting
As of July 2023, LED lighting is installed in 128 properties (46.2% of portfolio).

c. Installing heat shielding paint roofing

d. Encouraging tenants to conserve energy usage through posters on common area billboards and periodical “RESIDIA News” and sending of sustainability guides

e. Including a criterion concerning initiatives taken on environment in selecting a property manager.

f.Working together with building managers towards shared goals on environmental concerns.

g.Introducing car sharing in parking lots of properties
As of July 2023, 3 properties (1% of portfolio) have parking lots for car sharing.

h.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.

1. 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.

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

Establishing Policies

IRM has established policies on “Environmental performance data management standards” to improve energy efficiency of ADR’s properties and making effort to reduce the properties’ energy consumption and greenhouse gas emission.

Environmental Targets

For the entire portfolio, we aim to reduce energy consumption by 20% (intensity) and greenhouse gas emissions by 51% (total amount) for SCOPE 1 and 2 by FY2030, and achieve net zero emissions in FY2050 (compared to FY2018).

In May 2022, we procured FIT (Fuel-in-Transit) Certificates and converted 100% of the electricity used in common areas of the property to renewable energy in fiscal year 2021. As a result, we have reduced approximately 99% of Scope 2 greenhouse gas (CO2) emissions.

≪What is a FIT (non-fossil fuel certificate)?≫
FIT: Feed-in Tariff for renewable energy
Non-fossil Certificate...Certificates are issued for electricity generated from "non-fossil power sources (methods of electricity production)" that do not use fossil fuels such as oil and coal.

GHGScope3 calculations are made to determine CO2 emissions throughout the supply chain and to promote efforts toward net zero emissions. (from FY2022)

And ADR has installed electric energy measurement systems in 70 properties (50.4% of the portfolio) as of the end of July 2023, in order to improve the actual coverage rate of electricity consumption in our properties. By installing this system, it will be possible to measure the electricity consumption of the exclusive part. ADR encourages tenants to conserve usage through various enlightenment measures.

For tenants, IRM are implementing various enlightenment measures related to energy conservation.

Items

Targets by FY2030 (vs. FY2018)

Targets by FY2050

Energy Consumption

20% reduction (intensity)

GHG Emission (CO2)

Scope 1 & 2: 51% reduction (total)

Scope 3: Identification of corresponding categories

    and scope determination and calculation

Net zero

Water Usage

Do not increase (common areas)

Waste Volume

Recycling rate 65%

(emissions related to construction of exclusive use areas)

Energy Consumption
  FY2018 FY2019 FY2020 FY2021 FY2022

Targets
by FY2030
(vs FY2018)

  Coverage

% Change
(vs FY2018)

Total

Total Usage
(MWh)

15,749

15,536

15,354

15,266

14,274

100.0%

-10.5%

-20%

Intensity
(MWh/㎡)

0.086

0.086

0.083

0.082

0.077

Electricity

Total Usage
(MWh)

14,273

13,926

13,860

13,705

13,009

100.0%

-10.3%

-

Intensity
(MWh/㎡)

0.078

0.077

0.075

0.074

0.070

Fuel

Total Usage
(MWh)

1,248

1,365

1,263

1,313

1,091

100.0%

-13.3%

-

Intensity
(MWh/㎡)

0.060

0.064

0.042

0.061

0.052

Ditrict Heaing
andCooling

Total Usage
(MWh)

229

245

230

248

174

100.0%

-25.0%

-

Intensity
(MWh/㎡)

0.016

0.017

0.016

0.017

0.012

GHG Emission(Scope1,2)
  FY2018 FY2019 FY2020 FY2021 FY2022

Targets
by FY2030
(vs FY2018)

  Coverage

% Change
(vs FY2018)

Total
(scope1+2)

Total Usage
(t)

7,757

8,119

7,052

253

188

100.0%

-97.6%

-51%

Intensity
(t/㎡)

0.043

0.045

0.038

0.001

0.001

Direct Emission
Scope1

Total Usage
(t)

219

239

221

230

188

100.0%

-14.2%

-

Intensity
(t/㎡)

0.010

0.011

0.007

0.011

0.009

In-direct  Emission
Scope2

Total Usage
(t)

7,538

7,880

6,831

23

0

100.0%

-100%

-

Intensity
(t/㎡)

0.041

0.044

0.037

0.000

0.000

GHG Emissions (Scope 3)

Category

FY2022
(t-CO₂)

1. Purchased goods and services 2,085
2. Capital goods 18,354
3. Fuel- and energy-related activities (not included in Scope 1 or Scope 2) 44
5. Waste generated in operations 124
6. Business travel(IRM Employee) 33
7. Employee commuting(IRM Employee) 23
13. Downstream leased assets(tenants’ energy use) 9,080
Total 29,743

*Calculated using the guidelines for the calculation of GHG emissions of an organization throughout the supply chain provided by the Ministry of the Environment of Japan.

*The categories not mentioned above either do not have any emission source or are calculated in Scope 1 or 2.

Water Usage
  FY2018 FY2019 FY2020 FY2021 FY2022 Targets
by FY2030
(vs FY2018)
 

Coverage

% Change
(vs FY2018)

Total Usage (㎥)

11,035 10,817 11,263 9,879 10,637 100.0%

-5.8%

Do not increase
(common areas)

Intensity (㎥/㎡)

0.069 0.069 0.070 0.061 0.065
All water is taken from the water supply.
  FY2018 FY2019 FY2020 FY2021 FY2022
Water itake

Total Usage (㎥)

11,035 10,817 11,263 9,879 10,637

Intensity (㎥/㎡)

0.069 0.069 0.070 0.061 0.065
All drainage goes to the sewer.
  FY2018 FY2019 FY2020 FY2021 FY2022
Displacement

Total Usage (㎥)

11,035 10,817 11,263 9,879 10,637

Intensity (㎥/㎡)

0.069 0.069 0.070 0.061 0.065
Waste Volume
  FY2018 FY2019 FY2020 FY2021 FY2022 Targets and KPI
Total Volume(t) 84 119 181 115 126 Recycling rate 65%
(emissions related to
construction of
exclusive use areas)

Recycling Volume (t) 

74 102 160 103 111

Recycling Rate(%)

88.0% 85.7% 88.4% 89.8% 88.5%

Notes:

  1. Review period
    In principle, the period from April to March is one fiscal year, and results are updated on an annual basis.
  2. Scope of Reporting
    1. Only properties held for the full fiscal year are included in the scope of reporting, excluding properties that were traded during the fiscal year.
  3. Calculation Method
    1. “Intensity” is calculated as follows.
      Total Usage or Emission (MWh) ÷ Total floor area of common area (m2)
    2. For unit-owned properties, the ADR's ownership percentage is multiplied by the relevant data.
    3. The calculation of the waste recycling rate is as follows
      Recycling rate (%) = (1) Total amount recycled ÷ (2) Total amount x 100
          (1)Total amount of waste recycled The amount of waste recycled out of the total amount of waste generated by the restoration work ordered by ITOCHU Urban Community, a group company of the asset management company (㎥).
          (2)Total amount of waste generated from the same work (㎥).

*The environmental performance data figures for FY2018 through FY2021, which had been disclosed through FY2022, have been revised for the following reasons.The revision is due to the application of the new calculation method described in "03. Calculation Methods - 02" and limiting the scope of calculation of energy consumption - district heating and cooling to common areas.
*Past performance data may be revised retroactively in accordance with the revision of calculation methods, etc.

3. Independent assurance statement (limited assurance)

 Environmental performance data for FY2022, with a few exceptions, has been obtained from Sustainability Accounting Co., Ltd. as Independent assurance statement (limited assurance)  in accordance with the International Standard for Assurance Engagements ISAE 3000 and ISAE 3410.
The figures in the assurance report include data on properties acquired and sold during the period, and therefore the figures differ from the above actual values.

4. Setting Green-lease Contract Clauses

66.6% of tenants are under leasing contract with clauses concerning energy and water conservation (green-lease contract) as of July 2023.

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

5. Supply Chain Management

IRM has established a Sustainability 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 IRM 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 IRM believe it is important to have our major suppliers’ understanding and cooperation, on FY2017 IRM 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.

1. Investments in Flexible / Mixed Use Properties

ADR invests in flexible/mixed use properties (as of July 2023, 83properties, 30% 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
    95% (on acquisition price) of properties are located within 10 minute walk from the nearest train station.
    In addition, ADR has established criteria (access quality and number of minutes on foot) for the distance from the nearest station regarding property acquisition, within 10 minutes on foot for single and compact types, and within 15 minutes for family and large types.
  2. Properties with convenient facilities such as a supermarkets or convenient stores attached.
  3. Properties with open space which are publicly accessible. (As of July 2023, 7 properties (2.5% of portfolio))
  4. Universal design properties that are accessible to senior citizens.
    In principle, ADR’s properties have wheelchair-accessible leads (slopes, handrails, private parking lots) installed in the relevant properties based on the Building Standards Act.
    In addition, although it is not legally required, a handrail was installed at BRANCHEILE Kohoku 2 based on requests from tenants.

2. Investments Towards Urban Revitalization

By investing in properties developed through urban revitalization project, we contribute to the revitalization of towns and communities and the improvement of convenience for residents in the surrounding areas

01.   Pianetta Shiodome

We invest in properties located in the district developed by Urban Revitalization Projects in support of the creation of a community for new production activities and lifestyles based on the initiative of local residents.

The aim of the district is not only creating an attractive landscape while achieving harmony and balance between Italian culture and traditional Japanese culture, but also creating a safe and secure community and enhancing and strengthening partnerships with the government for sustainable regional development. Furthermore, the district is characterized by its adoption of Italian urban revitalization concepts, not only in the superficial adoption of Italian cityscapes, but also in the urban renewal process itself.

02.   Other urban redevelopment properties acquired by ADR.

3. 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 IRM’s sponsor group companies in various fields to lessen its environmental burden and contribute to local communities.

  1. Acquisition of sponsor group developed properties
    IRM 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.Acquisition of Green Building Certification.
  2. 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.

Participation in the Japan Climate Initiative

Subscribing to the fundamental principles of the Japan Climate Initiative (JCI), IRM became a member in July 2019.
Following the adoption of the Paris Agreement for the prevention of global warming in 2015, JCI was established by a coalition led by Japanese corporations, municipalities, NGOs, and other bodies actively working to address climate change. It is intended to serve as a network for voluntary efforts toward society’s decarbonization. JCI is aiming for the achievement of a decarbonized society by creating a nation-wide movement, supporting the activities of its member organizations while urging the government to take action, and cooperating with the international community.
For more information, please visit the Japan Climate Initiative website.