Policy and Basic Approach

Sustainability Policy

The Daiwa House Group’s basic approach is “Creating Dreams, Building Hearts.” As a group that co-creates value for individuals, communities and people’s lifestyles, the Daiwa House Group aims to build trusting relationships with stakeholders and contribute to society through its businesses, and to realize a sustainable society by meeting the challenge of achieving “zero environmental impacts.” Daiwa House Asset Management Co., Ltd. shares the Daiwa House Group’s basic approach as DHR’s asset manager, and considers that including consideration for ESG in its real estate investment management operations contributes to DHR’s basic policy of ensuring stable revenue and steady growth of assets over the medium to long term. Therefore, we have established the following “Sustainability Policy” to guide our real estate investment management.

• 1. Prevention of global warming

  We will promote energy conservation measures through the installation of energy conservation equipment and so forth to realize a carbon-free society. We will also consider introduction of renewable energy power generation facilities and acquisition of properties that have such equipment installed.

• 2. Harmony with the natural environment (preservation of biodiversity)

  We will aim for a society that is able to pass on abundant natural resources to future generations in order to protect and improve natural capital. We will also promote planting and management considering harmony with the surrounding environment.

• 3. Conservation of natural resources (protecting water resources, reducing waste)

  We will work towards the realization of a recycling-oriented society by promoting water conservation measures through the installation of water conservation equipment. We will also promote 3R activities (reduce, reuse, and recycle) for resources.

• 4. Prevention of chemical pollution

  We will aim to realize a society where people and ecosystems do not suffer adverse effects from chemical substances by promoting reduction, substitution and appropriate management of harmful chemical substances when managing real estate, and taking efforts to minimize risks.

• 5. Establishment of an internal framework and initiatives for employees

  We will establish an internal framework for promoting sustainability and take steps to develop human resources by conducting regular education and training for employees. We will also aim to create workplaces where people can work safely and healthily, and workplaces where diverse employees can work flexibly.

• 6. Building of trusting relationships with external stakeholders

  We will aim to build trusting relationships with external stakeholders and we will work on our suppliers to enhance the satisfaction of tenant customers and promote CSR in our supply chain. We will undertake neighborhood co-existence activities with local residents.

• 7. Promotion of communication through information disclosure

  We will proactively disclose ESG-related information and utilize dialogues with stakeholders, such as investors, in our future business activities. Furthermore, we will aim for continuous acquisition of Green Building Certification.

• 8. Compliance with laws and regulations, and risk management

  We will comply with ESG-related laws and regulations. Moreover, we will strive to implement appropriate risk management, such as giving consideration for the environmental and social impacts in risk evaluations when acquiring real estate and promoting awareness of human rights.

Learn more about Daiwa House Group’s CSR Guidelines

Sustainability Promotion System

To promote awareness of ESG based on the Sustainability Policy, the Asset Manager is working to secure an appropriate system for promoting sustainability. To do this, it established the “Regulations Concerning the System for Promoting Sustainability” and rules regarding topics such as internal framework, collaboration with stakeholders, and information disclosure policy. In addition, a meeting of the Sustainability Committee must be held at least once a month, in principle, to examine goals and measures related to sustainability. The Asset Manager is working to achieve these goals and implement various measures. Moreover, in principle, the Head of the Sustainability Committee annually directs the Committee to assess the status of all sustainability initiatives and to review them as necessary.

Organizational Chart

Sustainability Committee

Committee Head	President and CEO
Operating officer	General Manager, Sustainability Promotion Department
Executing officer	Head of Daiwa House REIT Division, Head of Private Fund Division
Members	All full-time Directors, Heads of Division, General Managers (excluding Compliance Officer) and other selected officers and employees
Observers	Outside expert advisor Compliance Officer
Frequency of meetings	At least once a month
Function and role	Deliberations and approvals regarding sustainability-related policy and strategy development and execution of sustainability-related operations, and reporting to the Board of Directors and the DHR Board of Directors as appropriate

Number of Sustainability Committee Meetings Held

Fiscal year ended March 2019	Fiscal year ended March 2020	Fiscal year ended March 2021	Fiscal year ended March 2022	Fiscal year ended March 2023
6	6	5	9	12

Number of reports on sustainability-related matters

	Asset Manager Board of Directors	DHR Board of Directors
Number of reports on sustainability-related matters (Fiscal Year Ended March 2023)	12	12

Main Items Reported and Resolved (Fiscal Year Ended March 2023)

Sustainability Committee

Reports

Sustainability implementation plan and results, annual schedule of sustainability-related operations, creation of sustainability reports, sustainability evaluations, submittal of responses to/reception of results of GRESB assessments, submittal of responses to/reception of results of CDP Climate Change Program, status of environmental certifications, listing on CDP Supplier Engagement Leaderboard, application for/acquisition of 2023 Health & Productivity Management Outstanding Organizations (SME category) certification, selection as an Environmentally Sustainable

Resolution

Purchase of non-fossil certificates, ESG website improvements, revision of Sustainable Procurement Policy, fundraising (Green Loans, Sustainability Linked Loans), joining the Japan Business Initiative for Biodiversity (JBIB), participating in the 30 by 30 Alliance for Biodiversity, formulating sustainability-related budgets

Asset Manager Board of Directors and DHR Board of Directors

Monthly reports

Sustainability budget and performance, climate change-related matters, external evaluation-related matters, environmental certification of portfolio properties, seminar attendance, etc.

Individual reports

Purchase of non-fossil certificates, ESG website improvements, creation of sustainability reports, status of conclusion of Green Lease agreements, status of environmental performance, questions from investors about ESG-related initiatives in IR activities, status of initiatives on principles of customer-first operations, climate change-related risk assessment, participation in initiatives, status of climate change-related initiatives, status of internal training

Resolution

Payment of sustainability index-linked fees

Concept of Sustainability Promotion Based on the PDCA Cycle