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Initiatives for Sustainability

Our mission and medium-to long-term vision

Our Mission and Medium-to Long-term Vision

Mission statement

Kenedix is dedicated to realizing the full potential of real estate.

Asset management at the Kenedix Group is guided by the goal of realizing the full potential of real estate. Accomplishing this requires more than simply pursuing short-term gains. Our activities combine carefully selected strategies, timing and financing schemes in order to precisely match the needs of investors and reflect the location and distinctive characteristics of each property.

Our mission statement, "Kenedix is dedicated to realizing the full potential of real estate," expresses our commitment to the creation of real estate value. We will remain focused on this goal in order to remain a driver of growth and progress in the real estate fund market.

Corporate mission

Corporate mission

Long-term vision

We have established the following long-term vision for 2025.

Kenedix Vision 2025 - To ensure the sustainable growth and increased corporate value over the medium to long term -

Long-term vision

*The Kenedix Group market cap includes the market value of REITs where Kenedix serves as the main sponsor.

We have clearly defined the Kenedix Model – Kenedix does not own real estate directly. Properties are held by funds that are established and managed by the Kenedix Group.

Our core strengths are the independence to work with diverse business partners, flexibility and creativity in our management decisions, innovation in our business schemes, and a commitment to taking on the challenge of creating real estate value by acquiring even more advanced specialized expertise, and a high degree of transparency in our dissemination of information. The effective use of all these strengths by the Kenedix Group is what underpins the success of the Kenedix Model.

The business model of the Kenedix Group does not rely on leasing revenue earned on real estate holdings and increases in real estate prices. We aim to increase assets under management (AUM) as the earnings base by providing better investment opportunities and robust asset management capabilities. In this manner, the Group targets AUM of ¥4 trillion, a group market cap of ¥2 trillion and ROE of 15%.

Medium-term management plan

We have established the following medium-term management plan for 2018-2020.

Partners in Growth, Next 2020

Basic policies

Basic policies

Quantitative targets

Quantitative targets

Sustainability promotion structure

The Corporate Communications Office, which is supervised directly by the President and CEO, is responsible solely for sustainability activities. This office has a Kenedix director as the Office Manager and performs the centralized oversight of all types of sustainability programs at the Kenedix Group.

As to sustainability related activities for listed REITs, Sustainability Committees separately established for each fund at Kenedix Real Estate Fund Management, Inc. are responsible to promote.

The Sustainability Committee is chaired by the Head of each REIT and consists of department managers at the REIT and others. The committee meets every three months, as a rule, to discuss sustainability policies and targets, consider various activities, and monitor sustainability programs and for other purposes. Discussions also incorporate social trends and asset management performance. Items discussed and reported at these committee meetings are reported to the Asset Management Committee of the Asset Manager and the Board of Directors of the Investment Corporation.

Sustainability Promotion Structure

Material issues

Kenedix has established material issues in order to identify subjects that are critical for achieving sustained growth of the Kenedix Group along with stakeholders and society. We will make commitment to find solutions to these issues both in business and society by making initiatives that reflect the opportunities and risks associated with each issue. Furthermore, we intend to contribute to achieving the SDGs by carrying measures for our materiality.

Process of defining material issues

Process of establishing material issues

Material issues of the Kenedix Group

Key areas and applicable SDGs Material issues
Contribution to a sustainable environment
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Reduction of energy consumption and CO2 emissions
Reduction of water consumption and waste materials
Collaboration with tenants for environmental initiatives
Commitment to a diverse society
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Providing properties with environmental and social considerations
Improving resilience/climate adaptation
Initiatives for an aging society with fewer children
Stakeholder engagement
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Continuous improvement of customer satisfaction
Community engagement
Managing conflicts of interests
Attractive working environment
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Recruiting, employee retention and career advancement
Health and wellbeing of employees
Diversity and equal opportunities
Responsible organization
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Compliance
Risk management
Commitment to responsible investments

Sustainability policies

As material issues are defined, we have set Sustainability Policies, expanding the scope of the previous Environmental Policies to cover ESG issues comprehensively. The Kenedix Group will adhere to the Sustainability Policies as the basis for unified initiatives towards the material issues.

Key areas Sustainability policies
Contribution to a sustainable environment Improving the environmental performance of the properties we manage is one of our social missions. We will lower the environmental impact and make contribution to environmental sustainability by constantly reducing the negative environmental impact of these properties, such as energy consumption, CO2 emissions, water consumption and the generation of waste materials. We also have activities for the proper management of hazardous substances and reduction in their use.
Commitment to a diverse society We contribute to the diversity of society while taking into account the social impact of our properties. We are committed to maintaining safety, confidence, good health, comfort and diversity regarding our tenants and the communities where we operate.
Stakeholder engagement We manage our properties as a responsible real estate asset management company by stressing the importance of engagement with our stakeholders such as investors, tenants, business partners, communities and property management companies.
Attractive working environment We aim to maintain an attractive working environment by implementing measures for employees' health and wellbeing and for diversity and equal opportunities. To enable employees to realize their full potential, we will provide a variety of training programs and other educational opportunities.
Responsible organization We have sound compliance and risk management activities in all of our business activities. We are committed to the principle of responsible property investments by a responsible organization by aligning our operations with global ESG initiatives and actively disclosing ESG information.

Stakeholder engagement

Investments in properties that we make as part of our real estate asset management operations create relationships and obligations concerning a broad spectrum of stakeholders. This is why stakeholder engagement is one of our key areas. Constant interaction with stakeholders is essential for establishing sound relationships. We are dedicated to using these relationships for even better asset management activities that can in turn help make society better.

Stakeholders Our Policy for Dialogues Major Dialogue Channels
Customers of properties
we manage
(tenants of office buildings
and retail facilities,
residents of residential
properties and healthcare
facilities and others)
Our priority is to provide a comfortable environment with safety and confidence so that we can ascertain the various needs of stakeholders and heighten customer satisfaction. We do this by building strong lines for frequent communications, performing customer satisfaction surveys, improving convenience for stakeholders and using other measures. Frequent exchanges of ideas by using property management companies, customer satisfaction surveys, use of digital signage to supply information, collaboration with tenants for environmental initiatives and other activities
Client investors of funds
we manage
(private fund investors,
REIT investors and others)
Private funds and private REITs
We use frequent meetings with institutional investors to give them a thorough understanding of our funds. For direct conversations, we ask these investors to tell us about requests, suggestions and any other matters.
Frequent meetings, asset management with strict measures to prevent conflicts of interest and other activities
Listed REITs
There are frequent institutional investor meetings as well as earnings announcement information meetings for securities analysts and information meetings for individual investors. We also use questionnaires and other methods for direct communications with investors.
Frequent meetings, earnings announcement information meetings for securities analysts, information meetings for individual investors, general unitholder meetings and meetings to report fund performance, various investor surveys, strict measures to prevent conflicts of interest and other activities
Business partners
(property managers of portfolio
properties and others)
Periodic meetings and other activities are used to give investors information about portfolio properties, a fund's current performance and any important issues. Furthermore, we assess the performance of property management companies periodically and announce the results along with items that require improvements. Periodic meetings, feedback on assessments of property management companies and other activities
Communities
(communities where portfolio
properties are located
and their residents)
We use portfolio properties in many ways to contribute to the vitality and convenience of their surrounding areas. For example, we offer a property's common and open space for a variety of activities on a temporary basis. At some locations, our properties are used to increase greenery in a neighborhood in order to create a better environment. Cooperation with communities by allowing the temporary use of properties (bicycle sharing site, disaster evacuation site, early voting location or other use), improvement of real estate environment to contribute to development of communities where our properties are located (planting vegetation, Satoyama project or other uses), and other forms of cooperation
Employees We hold personnel performance and goal discussions with employees regularly to learn their individual needs and other information about requests, goals and other subjects. Our people receive support for education and we are improving the working environment which provide programs for childcare, elderly parent care and other family requirements. Semiannual personnel performance and goal discussions with feedback, more education assistance to support recruiting, retention and skill development, working style reforms, support for health management, and the upgrade of the Rules of Employment to include support for child or elderly parent care, and other types of benefits and support
Shareholders
and other investors
We use the fair and timely disclosure of information to be a source of information with substantial added value. To give investors a better understanding of Kenedix, we use a number of effective IR tools and activities. We also contact investors directly to hear their thoughts and suggestions. Frequent meetings, earnings announcement information meetings for securities analysts, information meetings for individual investors, general unitholder meetings and meetings to explain strategies and goals, various surveys, strict measures to prevent conflicts of interest and other activities

External evaluation

MSCI Japan ESG Select Leaders Index

MSCI Japan ESG Select Leaders Index

The MSCI Japan ESG Select Leaders Index is developed by MSCI Inc. (United States, “MSCI”), the industry leader in ESG research who offers various tools to support the investment decisions of major investors around the world. This index is based on ESG research by MSCI, which is used by more than 1,000 companies worldwide, and is an ESG comprehensive index that comprehensively reflects various ESG risks in the market portfolio.

We are selected for membership in the MSCI Japan ESG Select Leadesr Index.
In addition, we received a rating of A in the MSCI ESG Rating assessment in 2019.

(Note) THE INCLUSION OF KENEDIX, INC. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF KENEDIX, INC. BY MSCI OR ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

S&P/JPX Carbon Efficient Index

S&P/JPX Carbon Efficient Index

The S&P/JPX Carbon Efficient Index is developed by S&P Dow Jones Indices, one of the world’s largest independent index companies, based on carbon emissions data from Trucost, a pioneer in environmental assessment. This index increases the investment weight of companies with high carbon efficiency and those that disclose information on greenhouse gas emissions within the same industry.

We are selected for membership in the S&P/JPX Carbon Efficient Index.