Diamond Realty Management Inc.

Global Environment and Society

Under our sustainability policy, we have implemented initiatives that take into account the conservation of the global environment and engagement with society. Specifically, we are monitoring energy consumption, reducing CO2 emissions, contributing to communities, engaging with investors, and obtaining external assessments such as environmental certification.

Monitoring of energy consumption

We monitor the energy consumption of portfolios we manage, centering on the portfolio of DREAM Private REIT Inc. (DPR). In fiscal 2020, the monitoring coverage ratio in DPR’s portfolio reached 100%.

Coverage Ratio in DPR’s Portfolio
*Total floor area-based data reported to GRESB
*Source: DREAM Private REIT Inc.

Promotion of energy saving and CO2 emission reduction

In the operation of DPR’s portfolio, we monitor energy consumption and strive to reduce energy consumption intensity by an average of 1% per year for the entire portfolio and individual properties respectively, over the medium to long term in accordance with the Energy Conservation Act. We also strive to promote water conservation through the effective use of water resources and the utilization of water-saving equipment.
Specifically, we identified 2016 as the target start year (baseline), and set the following long-term targets for the subsequent 10 years.
① Energy consumption (intensity basis): 10% reduction
② Greenhouse gas emissions (GHGs) (intensity basis): 10% reduction
③ Water consumption (intensity basis): 0% reduction

Energy Performance Results

Change in Consumption Intensity

Among our managed portfolio, in the calculation of the energy consumption intensity (MWh/M) and GHG emissions intensity (t/nf), we considered the occupancy rate for each asset type (i.e., urban retail properties, suburban retail properties, industrial properties (logistics), data centers, etc.) submitted to GRESB for which energy consumption is monitored.

*Source: DREAM Private REIT Inc.

Other Specific Initiatives

1. Environmental Risk Assessment at Time of Property Acquisition

When each fund acquires real estate properties, in addition to the information disclosed by sellers and on-site surveys, we obtain real estate/appraisal reports, engineering reports, etc. to conduct surveys on soil contamination, asbestos, PCBs, and other hazardous substances.

2. Promoting LED Lighting

We have realized energy saving by implementing LED lighting for certain properties owned by each fund. In addition, at DPR, we are taking into account cost standardization and the operation of assets under management by switching to LED lighting in a planned manner.

3. Introduction of Rainwater Utilization System

Certain properties owned by DPR have introduced a system that uses rainwater for planting and cleaning vehicles.

4. Encouraging Tenants to Save Energy

For the properties owned by DPR, as a measure to reduce environmental impact in cooperation with tenants, posters which call for cooperation in power saving and recycling, etc. are displayed in the buildings in an effort to raise awareness of the environment on a daily basis. In addition, we have achieved a certain level of achievement by actively making proposals and providing information on adoption of specific electric power companies that contribute to reducing GHG emission intensity and electricity charges.

5. Introduction of Green Leasing

For the properties owned by DPR, we have sequentially introduced so-called green leasing as an environmental measure in cooperation with tenants―even for the operation and renovation of facilities in the exclusive areas of tenants―by recommending the adoption of low-carbon materials and facilities with high energy-saving performance.

6. Procurement of Green Loans

DPR borrowed a green loan for which use was limited to refinancing of borrowings from Mitsubishi UFJ Bank, Ltd. at the time of the acquisition of DPR Hiratsuka Logistics Center, which received a five-star rating in BELS (energy rating) (January 2020). This loan is the first Green Loan provided to a private J-REIT and is compliant with the Green Loan Principles, and is rated as “Green 1”, the highest rating in JCR Green Loan Assessment by Japan Rating Laboratories.

7. Evaluation of Property Management Companies (PM Companies) for ESG Initiatives

We confirm and evaluate the status of ESG initiatives at each PM company that manages our properties to conduct screening of their qualifications as our business partners.

8. Reducing Energy Consumption, Paper and Waste at Our Office

Since 2019, we have monitored electricity consumption, paper consumption (counting of MFPs) and document disposal at our head office. We aim to reduce electricity consumption, paper consumption, and document disposal, by partially turning off the lights of vacant areas after leaving the office and issuing tablet devices to employees.

Social initiatives
(Collaboration with society and stakeholders and information disclosure)

We strive to collaborate with tenants, facility users, other clients, property management companies, other business partners, communities and other stakeholders in the course of conducting asset management for each fund. We also strive to disclose sustainability related information to investors and other stakeholders. We have strengthened our emergency response and normal preparedness, and have been striving to make efforts related to business continuity plans (BCPs), such as disaster prevention and disaster countermeasures.

Engagement with Local Communities

1. Examples of Events Aimed at Enhancing Relationship Between Tenants and End Users at Retail Facilities

Left: Sponsoring campaigns to support Pink Pony (Breast Cancer Awareness Activities) (October 2019, at Espoire Omotesando)
Center/right: Yukata de Marche (July 2018, at Umeda Ema)

2. Active Participation in Regional Consultative Bodies

When meetings are convened to discuss various local issues and matters that require joint responses in relation to the properties owned by DPR, we actively participate in related consultative meetings and confirm their intentions.

3. Agreement with Neighboring Property Owners to Respond to BCP

We have entered into agreements with neighboring property owners that allow mutual use of facilities in order to secure emergency evacuation sites in the event of natural disasters at multiple logistics warehouses owned by DPR and located in the Osaka Bay area. In concluding these agreements, we seek the understanding and cooperation of our tenants in order to improve their ability to respond to BCPs in the area.

Investor Engagement

Proactive Disclosure of ESG Information in Asset Management Reports, Etc.

In the Asset Management Report published by DPR once every six months, we feature pages dedicated to ESG, explanation of DPR’s ESG policies and specific initiatives. In addition, information concerning obtaining environmental certification is released in a timely manner on the website of DREAM, the asset manager of DPR, and the IR website. In addition, we not only provide explanation of asset management policies and circumstances but also ESG-related information through seminars for investors and other similar opportunities.

Seminar for investors Left (November, 2019), Right (February, 2018)