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Diamond Realty Management Inc.

10F, Hirakawacho Mori Tower 16-1, Hirakawacho 2-Chome,
Chiyoda-ku, Tokyo 102-0093 JAPANGoogle Map

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TopSustainabilityApproaches to Global Environment

Approaches to Global Environment

We are striving to reduce energy consumption and GHG emissions by improving energy efficiency, reexamining the sources of procurement, introducing equipment that contributes to energy conservation, and enhancing the energy monitoring system mainly in the portfolio of DREAM Private REIT Inc. (DPR), which manages our assets, as shown below.

Energy Management

Goal of DPR※

  • Medium-to long-term average reduction in energy consumption (basic unit basis) of 1% per year

  • Reduce GHG emissions (on a per-unit basis) by 30% from FY2016 levels by FY2030. Achieve net zero by FY2050

  • Disclosure of energy consumption

Results

  • Increase/decrease rate of energy consumption per unit of production 5.4% (FY2022 / FY2023 results)

  • Reduction rate of GHG emissions per unit of production 77.3% (FY2016 / FY2023 results)

    *Fiscal 2019 and 2020 saw a significant decrease due to the impact of the COVID-19 crisis.When setting targets, we assume a reduction rate during normal operation.

    Change in Consumption Intensity

    • Among our managed portfolio, in the calculation of the energy consumption intensity (MWh/M) and GHGemissions intensity (t/nf), we considered the occupancy rate for each asset type submitted to GRESB for whichenergy consumption is monitored.

    • In calculating GHG emissions intensity, renewable energy use (including use of J-credits, etc.) and energy purchasing non-fossil certificates are excluded.

    *Source: DREAM Private REIT Inc.

  • Data on Energy Consumption and GHG Emissions

    Results of energy consumption, GHG emissions, and basic unit by asset class are shown.
    Data on Energy Consumption and GHG Emissions

Promote use of LEDs for lighting

Goal of DPR※

  • Achieve and maintain a 90% ratio(Total floor area base) of lighting LEDs by 2025

  • Replacement of air conditioners/introduction of refrigerant equipment with low global warming potential at the time of installation

Results

  • Lighting LEDs ratio（Total floor area base as of the end of May 2024） 85.9%

  • Introduction of refrigerant equipment with low global warming potential

    Annual electricity consumption decreased by 28% compared to before air-conditioning upgrade (Honmoku Logistics Center)

Promoting energy procurement
with zero CO₂

Goal of DPR※

  • Achieve and maintain an 80% (Total floor area base) energy-procurement ratio by eliminating CO₂ related to properties which DPR has management authority by 2025

Results

  • Ratio of energy-sourcing by CO₂ zero（Total floor area base as of the end of FY2023） 98.7%

*Properties which DPR has management authority 20
*Percentage of properties that adopt a plan to reduce their emission factors to zero through the use of 100% of renewable energy (RE100) and an electricity plan with an adjusted emission factor of zero by combining J-credits, etc. (excluding land rights). is calculated by the ratio based on the total floor area reported to GRESB.

Responding to Climate-Related Issues

Goal of DPR※

  • Identifying, analyzing and disclosing climate change risks/opportunities in line with the recommendations of Task Force on Climate-Related Financial Disclosures (TCFD)

Results

  • For our awareness of climate-related issues and our basic policies and commitments

    For information about our company's initiatives related to the TCFD, please see our
    Approaches to climate change / Our initiatives for the disclosure items recommended by the TCFD.

  • Installation of shutter stays and flood barriers to prepare for increasingly large natural disasters

    In some properties operated by DPR, shutter stays and flood barriers are installed in preparation for a large-scale natural disaster in recent years. As part of our efforts to identify natural disaster risks, we list and disclose hazard information by property under management.

    Left: Installation of wind-resistant components on shutters (Kobe Minato Warehouse)
    Right: Tidal protective board in front of the Machinery Room (Daikokuchou Logistics Center)

Other Initiatives

  1. Environmental risk assessment at the time of property acquisition

    In addition to information disclosure from the seller and on-site surveys, we also conduct risk assessments for hazardous substances such as soil contamination, asbestos, and PCBs, and checks in line with our responsible investment policy guidelines, based on real estate appraisal reports, engineering reports, etc., at the time of property acquisition for each fund we manage.

  2. Introduction of rainwater utilization system

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

  3. Encouraging tenants to save energy

    At properties owned by DPR, as a measure to reduce environmental impact in cooperation with tenants, posters are posted in buildings requesting cooperation for saving electricity and recycling to raise awareness of the environment on a daily basis. In addition, even in the case of properties where utilities costs are borne by tenants, DPR is proactively providing information and making proposals regarding the reduction of GHG emission intensity and the hiring of electric power companies that contribute to the reduction of electricity prices, and has achieved some results.

  4. Introduction of green leasing

    At the properties owned by DPR, it is gradually introducing so-called green leasing, such as recommending the adoption of low-carbon materials and equipment with high energy-saving performance as an environmental measure integrated with tenants when operating and renovating facilities at exclusive part of the buildings.

  5. Green loan procurement

    DPR has procured a total of 33 green loans (total loan amount: 34.7 billion yen, number of financial institutions: 9) as of the end of March 2024, including loans that have already been repaid and funds procured. In addition, the “DREAM Private REIT Inc.(DPR) Green Finance Framework” established by DPR has been awarded the highest rating of “Green 1 (F)” in the “JCR Green Finance Framework Evaluation” conducted by Japan Credit Rating Agency, Ltd. (Refer to the news release of August 22, 2024)

    Outline of the Green Finance Framework of DREAM Private REIT Investment Corporation

    Target criteria

    Properties that have already obtained or are scheduled to obtain certification from one of the following third-party certification organizations are eligible.
    1) Three to five stars in the DBJ Green Building Certification
    2) B+ rank to S rank in the CASBEE for Buildings and CASBEE Certification
    3) Three to five stars in the BELS Certification (FY 2016 criteria)
    *Excluding logistics facilities with a BEI of over 0.75 4) Level 4 to Level 6 in BELS certification (FY2024 standards)
    *For non-residential buildings only.

    Financing type

    Borrowing (Loans)*

    *Borrowings are limited to the loan as private REITs cannot issue corporation bonds.
    Uses of
    procurement funds

    • Funds for acquisition and refinancing of properties that meet the criteria above

    • In the case of refinancing loans where the properties to be acquired fall under and do not fall under the above-mentioned target criteria, the total amount of loans procured at the time of acquisition of the properties will be apportioned according to the ratio of the acquisition price of each property (hereinafter referred to as the “initially procured allocated loan amount”), and the refinancing amount and the initially procured allocated loan amount will be procured as green finance within the scope of the refinancing amount and the initially procured allocated loan amount.

    • After the procurement of green loans, the loan management form (outline of loans) shall be used to manage the loan, and if more than one refinance related to the same property is used as green financing, the total amount of refinancing of the relevant property shall not exceed the loan allotted at the time of initial procurement at the time of the second or subsequent refinancing.

    Unallocated fund
    management

    When the subject property is sold, etc., the loan will not be returned immediately, but instead is shifted to cover all the properties owned by DPR that meet the target criteria.
    【Specific methods】
    A：Total value of real estate appraisal applicable to the subject properties at the end of the period × LTV* B：Green Loan Procurement Balance
    Continue borrowing under the condition of A = B or A > B.

    *LTV is based on the market value LTV of the entire DPR at the end of the same period.
    Disclosure Policy

    • Terms and Conditions of the procurement is disclosed on the DPR website.

    • DPR discloses the status of green building certifications and energy usage (GHG/ energy consumption unit) on the DPR website.*

    *Energy usage reduction goals have been set as part of the ESG initiatives of the DPR, and the results have been disclosed.

  6. Evaluation of ESG Initiatives
    by Property Management Companies

    We check the status of ESG initiatives at each property management company that manages our properties under management and screen their qualifications as business partners.

  7. Waste management

    We monitor the amount of waste generated and the recycling rate on an annual basis.
    We are striving to reduce waste through cooperation with tenants, etc.

  8. Reduction of energy, paper, and waste in our office

    Since 2019, we have been monitoring electricity consumption, paper consumption (counting of MFPs) and document disposal in our office. We strive to reduce electricity consumption, paper consumption, and document disposal by turning off partial lights in each area at the time of leaving office and renting tablet devices.

*The Goal of DPR, for which DREAM manages its assets.