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 group aims to build trust 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.”
DHR shares the basic stance of the Daiwa House Group and engages in Green and Sustainability Finance to further promote real estate investment management that considers ESG.

Sustainability Finance Framework

Third-party Evaluation

DHR has obtained a rating of “SU1” for our Sustainability Finance Framework. This is the highest rating offered in JCR Sustainability Finance Framework Evaluations conducted by the third party, Japan Credit Rating Agency, Ltd. (JCR).
For details on this evaluation, see the JCR website at: https://www.jcr.co.jp/en/greenfinance/

Sustainability Eligibility Criteria

Funds procured through Sustainability Bonds or Sustainability Loans are applied to the acquisition of eligible sustainability assets that meet the sustainable eligibility criteria below or refinancing of those funds.

Sustainability eligibility criteria

・Properties that satisfy the following green eligibility criteria and social eligibility criteria

1. Green eligibility criteria

Properties that have received or will receive one of the following four third-party certifications:

• DBJ Green Building Certification: 3 Stars, 4 Stars or 5 Stars
• CASBEE for Real Estate Certification: B+ rating to S rating
• BELS Certification: 3 Stars, 4 Stars or 5 Stars
• LEED Certification: Silver, Gold or Platinum

2. Social eligibility criteria

New and existing properties that have satisfied two or more of the following four standards (however, this does not apply to facilities for senior citizens and other properties with high social value)

• Local disaster prevention and resilience
  A property that has functions of providing an evacuation shelter for people afflicted by a disaster in the event of a disaster, disaster supplies and emergency power as well as water services and other lifelines to local residents afflicted by a disaster, by concluding an agreement with the local government or registering to help in the disaster.
• Care and medical services for senior citizens and people with disabilities
  A property with tenants such as housing for senior citizens as well as nursing homes, medical facilities, which contributes to offering healthy and cultured lifestyles to nearby residents.This also includes barrier-free facilities.
• Support for child rearing
  A property with tenants such as a nursery school or other childcare facility to help promote social welfare activities of nearby residents.
• Job creation for projects to help resolve local social issues
  A property prioritizing employment of nearby residents as employees of facilities.Alternatively, a property that is creating jobs for the entire region by investing in facilities developed by the area as a whole with the aim of bringing greater prosperity to local communities.

Management of Financing

The eligible sustainability debt amount is calculated by multiplying the sum of the total acquisition price of eligible sustainability assets by the interest-bearing debt to total assets ratio (LTV) as of the end of the most recent fiscal period. This is the maximum procurement amount for Sustainability Finance.

Period	February 2024 (36th Fiscal Period)
Total amount of sustainability eligible assets (millions of yen)	120,990
LTV	42.8%
Eligible sustainability debt amount (millions of yen)	51,784

Reporting

Reporting on Status of Fund Allocation

	Balance (millions of yen)
Sustainability Finance	4,000
Sustainability Bonds	4,000
Sustainability Loans	—

• The amount stated refers to the balance as of February 29, 2024.

The following table provides information about DHR’s status of fund allocation regarding Sustainability Finance.

Sustainability Bonds

Name	Outstanding issue (millions of yen)	Interest rate	Issue date	Maturity	Unallocated amount (millions of yen)	Third-party evaluation
15th Unsecured Investment Corporation Bonds	3,000	0.40%	November 17, 2021	November 17, 2031	-	JCR Sustainability Bond Evaluation “SU1”
16th Unsecured Investment Corporation Bonds	1,000	0.66%	November 17, 2021	November 17, 2036	-	JCR Sustainability Bond Evaluation “SU1”

Impact Reporting

DHR will annually disclose the following indicators on its website for as long as the funds procured through sustainability finance are outstanding.

1. Environment improvement effect

• Number and type of environmental certifications of acquired assets
• Specific consumption
  ─ Water usage (water consumption)
  ─ Power usage (energy consumption)
• CO₂ emissions (GHG emissions)
  Please refer to "Environmental Performance" for details.

2. Social benefit

(1) Output index

• Number of sustainability eligible assets

(2) Outcome index

• Local disaster prevention and resilience
  ・Number of properties that have concluded disaster prevention agreements with local governments, etc.
  ・Number of properties that provide an evacuation shelter in the event of a disaster
  ・Other properties contributing to local disaster prevention
  
• Care and medical services for senior citizens and people with disabilities
  ・Number of units available for senior citizens at facilities for senior citizens
  ・Number of medical facility tenants
• Support for child rearing
  ・Number of children acceptable at certified childcare facilities
• Job creation for projects to help resolve local social issues
  ・Employment status of local residents at applicable facilities
  

(3) Impact

• Co-creation of value for individuals, communities and people’s lifestyles by revitalizing local environments and building safe and secure local communities
  Please click here for details.