ESG of JPR
I would like to offer my sympathy and condolences to all those affected by COVID-19. I would also like express my respect and gratitude to healthcare professionals and to essential workers in critical infrastructure, such as energy and logistics, who are working to prevent further spread of COVID-19.
In 2020, the COVID-19 pandemic has plunged the global economy into its most dangerous crisis since the Lehman Brothers collapse. This experience of living through the COVID-19 pandemic is likely to change our lives and the nature of society forever. This experience has also been a powerful reminder to us of the role we, as a J-REIT, play in the social infrastructure and we are determined to do all in our power to fight COVID-19 and will devote ourselves to the provision of services adapted to the changing needs of customers and society.
In recent years, companies worldwide have been increasingly required to contribute proactively to the resolution of social and environmental issues. With respect to the scale for measuring corporate value, a movement for evaluating the medium- to long-term growth potential of companies based on non-financial information, in addition to conventional evaluation indicators such as information on their business performance and financial standing, has spread. The concept of ESG has become a global trend, mainly among institutional investors who manage long-term funds. As such, we have entered an era when an evaluation of the social and environmental aspects will have an impact on the competitiveness of companies.
J-REITs, which invest in real estate, operate on the principle of co-existence and co-prosperity with society, and we believe that our ESG initiatives are inseparable from our sustainable growth. Based on this awareness, TRIM intends to contribute to the realization of a sustainable society and urban development by implementing initiatives that squarely address social issues.
Yoshihiro Jozaki, Executive Officer,
Japan Prime Realty Investment Corporation
Role in Society and Value Creation Process of JPR
Role of JPR in Society
JPR believes that, as a J-REIT, its role in society consists of the following.
- Role of returning real estate rental revenues and other earnings to investors
(Creating an environment in which a wide range of investors can participate in real estate investment and enjoy stable distributions)
- Role of supplying funds for long-term stable investment to the real estate investment market
(Supporting activation and stabilization of the real estate investment market through the integration of real estate and finance and transparent information disclosure)
- Role of forming, regenerating and utilizing real estate stock
(Promoting improvements in real estate stock through buildings with improved earthquake resistance and lower environmental impact and the creation of comfortable, convenient spaces)
Value Creation Process of JPR
JPR will contribute to resolving the changing issues faced by society through the creation of five types of value.
For JPR to grow stably over the medium to long term, it is essential to address such social requirements as considerations for the environment, society and corporate governance. TRIM has established the "Sustainability Policy" as part of its endeavors to enhance sustainability.
Based on its corporate philosophy of working with integrity and commitment to its responsibilities, TRIM has resolved to contribute to the sustainable development of society and the investment management business through discussion and cooperation with its stakeholders (including investors and tenants), while aiming to maximize value for JPR's unitholders.
Initiatives on Behalf of Tenants
We will work with integrity and responsibility in responding to tenants, and endeavor to provide them with new and distinct values as well as enhancing their satisfaction.
Initiatives on Behalf of the Environment
Recognizing the importance of addressing environmental issues, we will aim to reduce he environmental load by managing the assets owned by JPR.
- We will promote energy saving and the reduction of greenhouse gas emissions.
- We will endeavor to make effective use of water resources and work on the "3Rs" (reuse, reduce and recycle).
- We will strive to proactively disclose information on environmental issues.
Initiatives on Behalf of Local Communities
We will work to coordinate with local communities by managing the assets owned by JPR, in an effort to contribute to enhancing the brand value of the area in which such assets are located.
Initiatives on Behalf of Employees
We will respect each of our employees to achieve an employee-friendly workplace, helping them enhance their abilities in their specialties.
Initiatives on Behalf of Society
We will abide by laws and regulations as well as the rules of society, and conduct business operations with a focus on transparency and objectivity while maintaining our high moral standards.
In 2018, TRIM established the Sustainability Committee to continuously promote sustainability initiatives systematically.
Chaired by the President and CEO, the overall Sustainability Committee consists of the Sustainability Committee, which comprises managerial personnel of TRIM, and the Secretariat, a subordinate organization of the Committee. The Sustainability Committee meets at least twice a year, while the Secretariat meets every month, in principle. In addition, the Sustainability Committee conducts activities such as setting sustainability targets, monitoring and assessing sustainability activities, and raising awareness among officers and employees, and the details of major activities of the Committee are reported to the Board of Directors of JPR and TRIM.
Signing of the Principles for Responsible Investment (PRI)
The Principles for Responsible Investment (PRI) refers to the six principles (see below for specific descriptions) as well as the international network of investors established to realize those principles. PRI is promoted by the United Nations Environment Programme ("UNEP") and the United Nations Global Compact ("UNGC").
PRI encourages companies to incorporate environmental, social and corporate governance ("ESG") issues into decisions on investments. By incorporating these perspectives into the investment decision-making processes, PRI aims for companies to enhance the long-term performance of their beneficiaries and further fulfill their fiduciary duties.
TRIM became a signatory to PRI in May 2019, in agreement with its fundamental thinking.
Materialities and SDGs
JPR and TRIM recognize that the realization of a sustainable society is essential for stable growth in the medium and long runs. TRIM approaches sustainability from the two perspectives of stakeholders' societal demands and business domains and determined materiality (material issues) for enhancing the social value provided through business activities as follows.
Materiality determination process
TRIM determined five material issues as social issues to be solved through business activities. JPR and TRIM will implement sustainability measures to solve these issues and also focus on the enhancement of ESG management.
Steps when considering materiality
Step 1 Consider and identify social issues
TRIM listed up social issues linked to business activities by categories of environment, society and governance, with reference to the SDGs and other international targets, reporting standards such as the GRI Sustainability Reporting Standards and Sustainability Accounting Standards Board (SASB) standards, to broaden its understanding.
Step 2 Assess and prioritize the identified issues
TRIM assessed 16 social issues and measured their importance. In its assessment, TRIM used the two assessment criteria of societal significance (stakeholders' needs) and business relevance (domains which are relevant to current business or have future business potential), and scored issues based on the following six perspectives.
|Societal needs||Business relevance|
|Comparison with other companies in the same industry||Analysis of existing initiatives|
|Industry analysis||Interviews with senior management|
|Expert reports||Workforce interviews|
Step 3 Validate
TRIM validated the proposed material issues in light of the material issues of other companies in the same industry, the assessment criteria of ESG rating agencies, and exchanges of views with outside consultants.
Sharing the philosophy of the SDGs, JPR and TRIM will contribute to the achievement of the goals through their business activities.
Materiality and Strategy target of JPR and TRIM (2030)
|･ Raising the ratio of properties with green certification
･ Improving the environmental rating of real estate
|･ Green certification acquisition rate of 80% or more
･ Improving coverage over standard evaluation
Countering climate change
･ Reduction of CO2
･ Achieve 30% reduction in CO2 per floor area (compared with the 2017 level)
Improving tenant satisfaction with safety, security and comfort
･ Improving satisfaction by providing software and hardware services (safety, security and comfort)
|･ Improving overall tenant satisfaction (safety, security and comfort)||
Creating a rewarding workplace environment
･ Strengthening human resources through training and self-development support
|･ Fostering professionals who support corporate growth
･ Improvement of business efficiency and process
･ Realization of physical, mental health and work-life balance
･ Providing an environment where each person can play an active role
Strengthening corporate governance
･ Implementation of transparent management though active IR
|･ Industry-leading information disclosure
･ Active dialogue with investors
･ Promoting dialogue with individual investors
･ Obtaining industry-leading ESG valuation
･ Maintaining a strong corporate governance
･ Industry-leading risk management
Major stakeholders of JPR and TRIM are tenants, local communities, employees, unitholders, investors and business partners. TRIM emphasizes stakeholder engagement by which TRIM uses dialogues with stakeholders for its asset management and business management through a variety of day-to-day mechanisms.
|Stakeholders||Thinking of dialogue||Methods of dialogue|
|Tenants||Work to improve services and the level of satisfaction by reflecting voices of tenants.||･ Tenant satisfaction survey
･ Collaboration on energy saving and disaster prevention
|Local communities||Contribute to local communities by working to enhance their value through community activities.||･ Participation of volunteers in cleaning activities
･ Participation in local events and festivals
|Employees||Make efforts to cultivate professional human resources by working to realize a rewarding workplace where employees can sense their growth.||･ Variety of education and training
･ Award programs
･ Periodic personnel interviews
･ Customer satisfaction surveys
|Unitholders and investors||Aim to build a long-term relationship of trust with unitholders and investors and acquire appropriate recognition through sincere and fair information disclosure and active communication.||･ General meeting of unitholders
･ Results briefings
･ IR meetings (Japan and overseas)
･ Seminars for individual investors
|Business partners such as property managers (PMs)||Aim to establish a relationship of trust and achieve mutual development through fair and equitable transactions with business partners.||･ Periodic information sharing
･ Implementation of workshops