Daiwa House REIT Investment Corporation

Daiwa House REIT Investment Corporation

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Information Disclosure Based on TNFD Recommendations

Policy and Approach to Natural Capital

DHR and the Asset Manager share the Daiwa House Group’s basic approach of “Creating Dreams, Building Hearts.” To attain a sustainable society, it is essential that we include environmental, social, and governance considerations in real estate investment management operations. We also believe that this will contribute to DHR’s basic policy of ensuring stable revenue and achieving steady asset growth over the medium to long term. As such, the Asset Manager established the Sustainability Policy in April 2017, and has been applying it to its real estate investment management business.
Our lives and economic activity are underpinned by the gifts of nature, which we receive through the ecosystem—the foundation of biodiversity. While the environmental issue of loss of natural capital, including biodiversity, may increase risks in the value chain, contributing to solving environmental issues through business can also lead to sustainable growth. Addressing climate change, reducing overconsumption, engaging in sustainable production, investing in biodiversity, and promoting other initiatives in the context of the business activities of DHR and the Asset Manager should contribute to the pursuit of nature positivity and increase our competitiveness.

Various Initiatives

General Requirements

The following “General Requirements” have been added in the TNFD to the TCFD framework.

General Requirements
(1) Application of materiality

Identify material issues (materialities), including natural capital related to sustainability, through the process below.

Step 1 Extracting sustainability issues
Sustainability issues related to DHR were extracted using various global ESG assessments, sustainability disclosure standards, and the SDGs
Step 2 Setting priority rankings
We set priority rankings from the extracted issues by verifying the state of DHR’s disclosure and response and through interviews with management of the Asset Manager
Step 3 Confirming validity
To ensure objectivity, an external consulting company reviewed our “selection process” and “identified materialities”
Step 4 Discussions and approval by management
Reports to the Compliance Committee, the Asset Manager’s Board of Directors, and DHR’s Board of Directors after discussion at the Sustainability Committee
(2) Scope of disclosure
■Scope of nature-related assessments and disclosures
  • Direct operations: Real estate management (Note)
  • Upstream value chain: Construction (reference)
  • Downstream value chain: Not covered at this time
  • Top 100 properties in the portfolio based on acquisition price (80.1% coverage) (As of January 31, 2024)
■Process for determining the scope of nature-related assessments and disclosures

Reports to the Compliance Committee, the Asset Manager’s Board of Directors, and DHR’s Board of Directors after discussion at the Sustainability Committee.
(3) Geographic location
  • We take into consideration the geographic location, which is the interface between our portfolio and nature throughout the value chain, since the nature-related risks and opportunities in DHR’s direct operations depend on the geographic location of the real estate and nature interface.
  • When disclosing information by geographic location, information is subdivided and aggregated, taking into account the characteristics of the information and its usefulness to users.
(4) Integration with other sustainability information
  • This disclosure is based on the TNFD recommendations, and in the future, we are considering integrating it with previous disclosures based on the TCFD recommendations.
(5) Timeline

Short-term: 1 year or less
Medium-term: 1 to 10 years
Long-term: 10 to 30 years
(6) Engagement

Daiwa House Group shall strive to have dialogues and consultations with the stakeholders so as to understand the influence that our business activities may bear upon human rights from the viewpoint of those affected and to address and improve it.
See Stakeholder Engagement for more information.
Governance Strategy Risk and Impact Management Metrics and Targets
Disclose governance related to nature-related dependencies, impacts, risks, and opportunities. Disclose the impact of nature-related dependencies, impacts, risks, and opportunities on business models, strategies, and financial plans when such information is material. Disclose the process used to identify, assess, prioritize, and monitor nature-related dependencies, impacts, risks, and opportunities. Disclose metrics and targets used to assess and manage significant nature-related dependencies, impacts, risks, and opportunities.

Examination of Risks and Opportunities in Line with the LEAP Approach

LEAP Approach

In line with the LEAP (Locate, Evaluate, Assess, Prepare) approach designed to assess nature-related risks and opportunities as outlined by the TNFD, DHR identified and analyzed nature-related dependencies and impacts (Note) on DHR’s operations, as well as identified and evaluated nature-related risks and opportunities.

Implementation of LEAP Approach Analysis

Daiwa House REIT Investment Corporation

Daiwa House REIT Investment Corporation

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