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. ^{(Note 1)}

• 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. ^{(Note 2)}

• 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. ^{(Note 2)}

• 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.

• Sustainability training is provided in order for employees to understand the impact of their business activities on the environment.
• Training and engagements are conducted to raise the awareness of internal and external stakeholders on environmental management policies and environmental impacts.

Items to Confirm When Considering a Property Acquisition

The Asset Manager confirms the following items when considering a property acquisition.

Item	Confirmation details
Disaster risk	Risk of flooding, landslides, tsunamis, liquefaction, etc. In particular, flooding risks are identified based on elevation and ground floor elevation Status of response during design/construction, if necessary Status of response to flooding risk, if any
Environmental certifications	Acquisition of environmental certifications (BELS, CASBEE, DBJ Green Building Certification, LEED, etc.)
Energy data	Usage of energy data (electricity, gas, water, and waste) Impact on portfolio (if data can be acquired)
Green lease agreements	Status of green lease agreements
Compliance with environmental laws and regulations	Compliance with environmental laws and regulations such as the Building Energy Conservation Act, Energy Conservation Act, Fluorocarbon Emissions Control Act, Tokyo Metropolitan Environmental Security Ordinance and other local government ordinances regarding global warming, Waste Disposal Act, etc.

The property acquisition process is subject to internal audits and third-party reviews after acquisitions.

Compliance with Environmental Laws and Regulations

Based on reports from property management (PM) companies and building management (BM) companies regarding environmental laws and regulations pertaining to DHR’s business activities, DHR has confirmed that there are no omissions of reporting or violations of laws and regulations.
There were no guidance matters or lawsuits from the relevant authorities regarding violations, etc. (FY2024)

Sustainable Procurement Policy

The Sustainable Procurement Policy is one of the policies to put into practice the individual items set forth in the Asset Manager’s Sustainability Policy and sets forth guidelines pertaining to the selection criteria of products, etc., to be procured for the management of DHR’s real estate portfolio, as well as the selection and evaluation criteria of suppliers. The Asset Manager will aim to include, to the extent possible, the Sustainable Procurement Policy in its decisions on the selection and evaluation of products and suppliers to be procured.

Sustainable Procurement Policy

What the Sustainable Procurement Policy Stipulates (Excerpts)

Environmental Conservation

Aiming to realize a society in which people can live comfortably and in harmony with the environment, and striving to reduce the environmental impact of our business processes, products, and services.

• Compliance with environmental laws and regulations and response to social demands
• Challenge towards carbon neutrality
• Challenge towards a circular economy
• Management of chemical substances
• Considerations for biodiversity
• Response to water risks

Co-creation and Symbiosis with Local Communities

Respecting the cultures and customs of the regions in which we operate and striving to contribute to the sustainable development of local communities through our business activities, etc.

• Considerations and contributions to the local residents and communities in which we operate

Chemical Substance Management

Not using substances, etc., that are prohibited by domestic law.

Respect for Human Rights

Respecting the dignity and fundamental human rights of all persons involved in our business activities and refraining from human rights violations or discrimination.

• Prohibition of discrimination
• Prohibition of forced labor
• Prohibition of child labor
• Prohibition of harassment
• Respect for the rights of indigenous people
• Freedom of association and the right to collective bargaining
• Payment of fair wages
• Working hours
• Responsible procurement
• Access to relief
• Protection of identity and elimination of retaliation
• Respect for the human rights of foreign workers

Biodiversity

In procuring wood, striving to use timber that has been verified as legal and sustainable, or procure 100% recycled timber.

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

Committee Head	President and CEO
Operating officer	General Manager of Well-being Department, Administration and Accounting Division
Executing officer	Head of Daiwa House REIT Division, Head of Private Fund Division

Sustainability Committee

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, and General Manager of Compliance Department
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 2022	Fiscal year ended March 2023	Fiscal year ended March 2024	Fiscal year ended March 2025
9	12	12	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 2025)	12	12

Main Items Reported and Resolved (Fiscal Year Ended March 2025)

Sustainability Committee

Asset Manager Board of Directors and DHR Board of Directors

Concept of Sustainability Promotion Based on the PDCA Cycle