Initiatives on Behalf of the Environment
Recognizing the importance of addressing environmental issues in the real estate investment management business, JPR strives to reduce its environmental footprint by upgrading facilities and improving operations at the properties it owns. In pursuing eco-friendly management, JPR also considers issues such as facility user comfort and biodiversity.
- Climate change
- Conservation of water resources
- Reduction of waste and management of hazardous substances
- Promoting renewable energy
- Promotion of wall greening and rooftop greening
- Cooperation with tenants
- Improvement in effectiveness in cooperation with property managers
- Ensuring environment, safety and health in real estate investment
- Green Finance
- Sustainability certification
JPR and TRIM recognize that climate change is an environmental issue and medium-to-long-term risk which will have a major impact on their business.
Climate change caused by global warming will lead to rising sea levels, heavy rainfall and increased flooding and could affect JPR's business and NAV. For this reason, JPR and TRIM are managing and using data on greenhouse gas (GHG) emissions which affect climate change, submitting appropriate reports based on relevant laws and regulations, and working to reduce GHG emissions through their business activities.
Climate change-related governance framework
TRIM's Sustainability Committee and Secretariat, a subordinate organization of the Committee, play central roles in gathering information about climate change-related risks and examining strategies for addressing these risks.
Meanwhile, TRIM's Risk Management Committee manages risks, including climate change-related risks, through regular monitoring, in accordance with TRIM's Risk Management Regulations.
Climate change related risks and opportunities
JPR and TRIM examine climate change-related risks and opportunities by classifying them into risks related to transition to a low-carbon society and risks related to the physical changes brought about by climate change.
|1||Tightening of environmental regulation||Reputation risks arising from breaches of environmental legislation|
|Increased cost of CO2 emissions|
|2||Rising energy prices||Rising utility costs|
|3||Changes in tenant behavior||Growing demand for disaster proof, eco-friendly buildings|
|4||Changes in investor behavior||Decline in asset value of buildings with poor environmental performance|
|Fall in investment unit price amid avoidance of investment due to insufficient climate disclosures|
|1||Damage caused by typhoons and heavy rain||Decline in value of assets in areas with high disaster risk|
|Higher costs arising from damage to buildings due to disaster|
|2||Increase of average temperatures||Higher costs associated with surging electricity demand|
|Increased complaints from building occupants due to heat|
|3||Rising sea levels||Higher costs and decline in the value of assets due to flood damage|
|Higher costs for protection against floods|
Climate change-related goal
JPR and TRIM are working to save energy and reduce CO2 emissions by setting an environmental goal of reducing the energy consumption intensity and the CO2 emission intensity of the entire portfolio by 5% or more for five years from 2017.
*While TRIM set 2016 as the base year of the environmental goal, data calculation methods in 2016 and from 2017 onwards were different because TRIM introduced an energy management system in April 2019. TRIM has changed the base year from 2016 to 2017 to enable a more accurate data comparison.
Measures for attainment of goal
JPR and TRIM work on environmental and energy-saving measures such as replacing equipment with items with higher energy efficiency and improving management methods, and they promote the reduction of CO2 emissions by measuring the value of greenhouse gas emissions.
Initiatives for improvement of repairing equipment
- Upgrading to highly energy-efficient equipment
Power consumed by air-conditioning equipment represents a significant percentage of the power consumed by all buildings, with power demand increasing sharply during the hot summer months in particular. JPR carries out planned upgrades of air-conditioning equipment in order to improve cost efficiency and comfort while reducing CO2 emissions.
- Upgrading to LED lighting
JPR is reducing power consumption by steadily introducing LEDs in common-area lighting and emergency exit lighting.
- Upgrading to lighting fixtures with motion detectors
Motion detectors respond to the movement of people and changes in brightness to provide illumination only when needed; as a result, lights do not remain on because people forget to turn them off, which reduces power consumption. JPR is working to reduce power consumption by installing motion detectors in bathrooms, staff kitchens, and stairways when carrying out common-area renovations so that lights will be turned off when these areas are not in use.
Initiatives for improvement of operations
At the facilities JPR operates, steps are also being taken to carefully coordinate equipment operation and control operation according to the season in order to reduce power consumption in common areas.
|Lighting||Dimming lighting when rooms are vacant||Creating standards for turning lighting on and off and promoting turning lights off when rooms are vacant|
|Phasing out fluorescent vacuum tubes||Reducing electricity consumption by phasing out fluorescent tubes|
|Floor management of common-area lighting||Managing common areas according to use by tenants|
|Air-conditioning equipment||Changing air-conditioning temperature to recommended values||Recommending that tenants adopt appropriate temperature settings for air-conditioning|
|Turning off air-conditioning power in empty rooms||Turning off air-conditioning equipment power in empty areas to stop consumption of standby power|
|Prohibiting entry of outside air during pre-warming/ pre-cooling||Restricting the entry of outside air during pre-warming/pre-cooling in order to reduce air-conditioning loads|
|Other equipment||Changing contract demand||Reviewing method of operating control equipment for the purpose of reducing contract demand and turning off equipment that is always on standby where appropriate|
|Improving power factor using condensers||Improving power factor through careful control of condensers and reducing electrical circuit and transformer energy loss|
|Seasonal adjustment of heated toilet seat temperatures||Managing toilet seat heating and washing water temperatures by adjusting the settings according to the season|
|Seasonal management of times when outdoor lights are turned on||Automatically turning off exterior lights and managing the times when they are lit according to the season|
Improving building resilience
TRIM conducts onsite inspections of all portfolio properties (except land with leasehold interest) at least once a year, in principle, to assess whether they are equipped to withstand disaster (including typhoon, heavy rain, flood, and earthquake), checking for any new risks and seeking to mitigate the risk of damage, loss or degradation of the properties.
Managing tenants in a crisis
TRIM regularly conducts disaster drills at every portfolio property to ensure that building tenants are able to take steps to rapidly ensure the safety of their workforce and prevent escalation of the disaster.
Examining renewable energy adoption
Renewable energy sources such as solar and wind are promising forms of energy which do not produce greenhouse gases and will not be affected by regulatory risks in the future, and the generation costs of renewables have fallen sharply around the world. JPR and TRIM use renewable forms of energy at portfolio properties based on verification of economic efficiency, stability and safety and on the individual characteristics of each property.
Monitoring of environment-related data
In addition to pursuing environmental and energy-saving measures, JPR periodically measures greenhouse gas emissions and strives to reduce the amount of CO2 emitted at its properties.
|Category/Unit||FY 2017||FY 2018||FY 2019|
|Electricity Use||Total (MWh)||95,436||93,444||91,730|
|Gas Use||Total (MWh)||17,908||17,992||17,008|
|Heat Consumption||Total (MWh)||11,999||12,217||11,682|
|Energy consumption||Total (MWh)||125,344||123,653||120,421|
|Category/Unit||FY 2017||FY 2018||FY 2019|
- The data shown in the table is based on the data that is available to JPR.
- The energy consumption and scope 1 emissions data does not include relevant data derived from emergency generator fuel.
- Energy consumption, water use and GHG emissions data is also broken down into office property and retail property categories for further verification. The intensity is presented based on the calculation of (Total amount of electric power or CO2)/(Total floor area of equities (m2) x (Average occupancy rate per year (%))
Conservation of water resources
JPR switches to apparatuses with greater water-saving effects with the renewal of toilets and kitchenettes. In addition, JPR works to reduce consumption by managing and measuring it appropriately in cooperation with tenants.
In some of the properties it holds, JPR has installed water recycling facilities for rainwater and recycles water to reduce water consumption.
|Category/Unit||FY 2017||FY 2018||FY 2019|
|Category/Unit||FY 2017||FY 2018||FY 2019|
Reduction of waste and management of hazardous substances
Reduction of the amount of waste produced
By sorting industrial waste and enhancing recycling efforts, JPR is actively working to reduce the amount of waste produced. With the support of tenants and cleaning companies, the following waste-reducing initiatives have been implemented:
- Expanding the scope of recycling
- Recycling used fluorescent light tubes and batteries
- More thorough sorting rules
- Enhancing recycling and educational activities
Waste and Recycling Rate
|Category||FY 2017||FY 2018|
|Annual waste amount (t)||5,137||4,950|
- This graph aggregates data for properties owned by JPR, excluding properties where tenants dispose of waste themselves.
- The waste amount and recycling rate data is data for FY2017 (from April 1, 2017 to March 31, 2018) and FY2018 (from April 1, 2018 to March 31, 2019).
- Three small buildings are not included in the totals because they do not engage in activities such as gathering waste data.
Management of hazardous substances
Treatment of asbestos
- With the Ordinance on Prevention of Health Impairment due to Asbestos (the Ministry of Health, Labour and Welfare) coming into effect in July 2005, employers have been obliged to take measures such as the removal, containment and enclosure of sprayed asbestos if it could disperse in a building where their employees work.
- JPR had carried out the removal of sprayed materials such as asbestos at the time of facility renovations, before the Ordinance came into effect, and all the necessary measures such as removal, containment and enclosure have been completed in locations with a high frequency of use, such as offices and corridors.
- In properties that contain asbestos and other sprayed materials, JPR inspects and verifies that the asbestos is below the standard value by measuring the status of the asbestos on an ongoing basis when JPR measures the air environment based on the Act on Maintenance of Sanitation in Buildings.
- When acquiring a property, JPR has experts conduct an investigation upon concluding a sales contract to ensure that environmental pollutants such as asbestos are managed appropriately.
Treatment of PCB
If PCB is contained in a property owned by JPR, JPR treats the PCB according to related laws and regulations after removing the electrical equipment that contains PCB. During the period until the treatment, JPR stores and manages the electrical equipment appropriately based on the PCB storage and management standards of the environment bureau of each prefecture.
Promoting renewable energy
Tokyo Square Garden and Olinas Tower, which are owned by JPR, use renewable energy through the introduction of solar power generation equipment. The amount of power generated is as follows.
|Portfolio||FY 2017||FY 2018||FY 2019|
|Tokyo Square Garden||4,551||4,578||3,655|
- The amount of power generated is a value for interests owned by JPR.
Promotion of wall greening and rooftop greening
As a part of JPR's brand strategy, JPR greens the walls and rooftops of properties using environmentally accepted plants. This helps create a natural environment in cities and promotes the inhabitation of diverse organisms. The wall and rooftop greening also has the effect of reducing the electricity consumption of air-conditioning through thermal insulation and the effect of reducing the thermal load inside buildings.
Cooperation with tenants
Promotion of a green lease contract
A green lease contract makes arrangements to reduce environmental loads such as through energy savings and improving the work environment, with the building owner and the tenants working together. In lease contracts of JPR, a green lease clause is standardized to promote the reduction of environmental loads in cooperation with the tenants.
Example of conclusion of green lease agreement (Niigata Ekinan Center Bldg.)
JPR's tenants include corporations and organizations with strong environmental awareness and JPR is pushing for the conclusion of green lease agreements which create a win-win situation for both parties. JPR concluded a green lease agreement for Niigata Ekinan Center Bldg.
The main points are as follows:
- Reduction of CO2 emissions and costs through switch to LED
- Improvement of property quality through mitigation of environmental impact
Improvement in effectiveness in cooperation with property managers
To promote initiatives to reduce environmental loads, cooperation with the property managers (PMs), who manage and operate properties on site, is essential. JPR and TRIM regularly share information with the PMs and discuss initiatives on energy-saving and environmental issues.
JPR and TRIM also hold workshops for the PMs and others to raise their awareness of sustainability and enhance their readiness.
Ensuring environment, safety and health in real estate investment
When acquiring a new property, JPR and TRIM always check the environmental and social risks by using outside experts, in addition to site visits and investigations, before concluding a sales contract to avoid the risks. In addition, JPR and TRIM also monitor the environmental, safety and health aspects of existing properties on an ongoing basis.
To implement green finance, JPR has formulated the Green Finance Framework in accordance with the Green Bond Principles 2018 and the Green Bond Guidelines 2017 Edition.
Framework of Green Finance
Use of proceeds from Green Finance
Proceeds from Green Finance will be allocated as follows.
- To fund purchases of existing or new assets classed as Eligible Green Assets (explained later)
- To fund the repayment of loans needed to purchase Eligible Green Assets
- To fund the redemption of investment corporation bonds needed to purchase Eligible Green Assets
Eligible Green Assets
Eligible Green Assets will be selected from among assets that have received or will receive certification under either of the following standards.
- DBJ Green Building Certification: 3 Stars, 4 Stars or 5 Stars
- CASBEE: B+ Rank, A Rank or S Rank
Management of proceeds
Eligible green liabilities will be calculated by multiplying the total acquisition price of Eligible Green Assets in the portfolio by the ratio of interest-bearing liabilities to total assets (LTV) and this amount will be set as the maximum amount of Green Finance.
JPR obtained Green 1 (F) rating, the highest possible, in a "Green Finance Framework Evaluation" by Japan Credit Rating Agency, Ltd. (JCR), which is a third-party evaluation organization, regarding the eligibility of its Green Finance Framework.
Please click on the link below for further details. https://www.jcr.co.jp/en
Status of Finance
Outstanding Balance of Green Bonds Issued
|Issue Amount (million yen)||5,000|
|Issue Date||July 31, 2019|
|Maturity Date||July 31, 2029|
|Use of proceeds||To fund the repayment of loans needed to purchase Eligible Green Assets are as follows :
･ The acquisition on May 31, 2010 JPR Sendagaya Bldg. (2,000 million yen)
･ The acquisition on August 8, 2012 Yakuin Business Garden (3,000 million yen)
Status of Acquisition of Environmental Certification
|Item||Dec. 2018||Jun. 2019||Dec. 2019||Jun. 2020|
|Number of properties||17||21||23||26|
|Total floor area||223,389||352,458||359,132||414,241|
|Percentage of properties with environmental certification||34.0%||53.4%||54.4%||60.1%|
Acquisition of DBJ Green Building Certification
JPR has acquired the DBJ Green Building Certification, which Development Bank of Japan Inc. (DBJ) offers to real estate properties that give consideration to both the environment and society for several properties.The DBJ Green Building Certification is offered by DBJ in five ranks, according to the degree of consideration given by office properties to the environment and society.
|Property||Certification Level||Acquisition Date|
|Tokyo Square Garden||★★★★★||Jul. 2017|
|Olinas Tower||★★★★★||Dec. 2018|
|JPR Sendagaya Bldg.||★★★★||Dec. 2018|
|Oval Court Ohsaki Mark West||★★★★||Dec. 2018|
|Shinjuku Center Bldg.||★★★★||Mar. 2019|
|Omiya Prime East||★★★||Dec. 2018|
|Rise Arena Bldg.||★★★||Dec. 2018|
|Yume-ooka Office Tower||★★★||Dec. 2018|
|Kanematsu Bldg.||★★★||Dec. 2018|
|BYGS Shinjuku Bldg.||★★★||Dec. 2018|
|Shinagawa Canal Bldg.||★★★||Dec. 2018|
|Kawasaki Dice Bldg.||★★★||Jun. 2019|
|JPR Crest Takebashi Bldg.||★★||Dec. 2018|
|Shinjuku Square Tower||★★||Mar. 2019|
Concerning Acquisition of CASBEE for Building Certification
CASBEE is a system for comprehensively assessing and ranking the environmental performance of buildings with regard to aspects, such as the enhancement of environmental quality and performance, including indoor comfort and consideration for the landscape, on top of the aspect of environmental consideration, such as energy saving and the use of materials and equipment with a lower environmental burden.
For details of the System, please refer to the website of CASBEE
|Property Name||Certification Level||Acquisition Date|
|Musashiurawa Shopping Square||S||Jun. 2019|
|JPR Umeda Loft Bldg.||S||Jun. 2019|
|Housing Design Center Kobe||S||Jun. 2019|
|JPR Kojimachi Bldg.||S||Dec. 2019|
|FUNDES Ueno||S||Dec. 2019|
|JPR Musashikosugi Bldg.||S||Jun. 2020|
|Sompo Japan Sendai Bldg.||S||Jun. 2020|
|Yakuin Business Garden||A||Jun. 2018|
|JPR Shibuya Tower Records Bldg.||A||Jun. 2019|
|Kawaguchi Center Bldg.||A||Jun. 2020|
Acquisition of ranking in GRESB Real Estate Assessment
GRESB is an annual benchmarking assessment to measure ESG (Environmental, Social and Governance) integration of real estate companies and funds, as well as the name of organization which runs the assessment. It was founded in 2009 primarily by major European pension fund groups. Of the survey subjects, GRESB real estate assessment covers real estate companies and funds that are mainly engaged in managing existing properties.
With regard to JPR's initiatives on sustainability, the 2020 survey acknowledged its superiority both in the "Management Component" and "Performance Component" dimensions, and designated JPR as "Green Star" for the seventh consecutive year. Moreover, JPR was granted "5 Stars" for the sencond consecutive year, which is the highest mark in GRESB Rating. In addition, JPR received an "A," the highest rating, in GRESB Public Disclosure (Evaluation of ESG Disclosure Level).
The following initiatives taken by JPR were acknowledged in the assessment of the survey:
- Enhanced management and strategy for sustainability, including establishment of objectives and reinforcement of the implementation system
- Concrete actions for appropriately understanding ESG risks and improving on ESG issues
- Strengthened efforts in establishing relationships with tenants and other stakeholders
Yakuin Business Garden is located in the urban area of Fukuoka City. As the building name indicates, the property has a wide, vacant lot open to the public, where 23 kinds of plants provide a different appearance season by season, including the corridor of zelkova trees that dye the air green. It is a space of greenery full of healing and comfort, where not only the facility users but also many other people feel relaxed. JPR endeavors to promote greenery as an initiative to enhance the asset value as well as to support town creation.
[Won the 10th "Award for Town Creation with Flowers and Greenery" in 2013]