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Sustainability Initiatives

JHR's view on Sustainability

We, Japan Hotel REIT Investment Corporation (hereinafter called "JHR") and Japan Hotel REIT Advisors Co., Ltd. (hereinafter called "JHRA") believe that operating sound business in which we can coexist with society and environment will enhance unitholders’ value for mid-to-long term. We are working on to enhance sustainability based on our recognitions to the risks and opportunities of Environment, Social, and Governance (ESG).
To enhance sustainability, we have established the "Sustainability Policy" in December 2017. Based on this policy, we strive to promote ESG initiatives, such as reduction of environmental impact, considerations for all of our stakeholders, etc.
We, as a J-REIT specializing in hotel investment, recognize our responsibility for society and local communities and proactively promote social contribution activities through utilizing characteristics of the hotel sector and each hotel.

Sustainability Policy

  • Monitoring and improvement of environmental performance in our portfolio
    We promote monitoring environmental performance such as energy consumption, etc. in our portfolio. Also, we share our goals with hotel lessees and operators, and strive to continuously improve environmental performance through optimizing operations and management as well as through facility renovation, etc. Furthermore, we seek assessment from third parties where appropriate.
    We take environmental risks into consideration to make investment decisions and to monitor operations of our portfolio.
  • Promotion of comfortable, healthy, secure and safe hotels
    We care safety, health and barrier-free access etc. of our hotels and promote initiatives to have stronger resilience against natural disaster, etc.
    We take safety, health and well-being factors into consideration upon making investment decisions and monitoring operations of hotels in our portfolio.
  • Promotion of ESG in value chains
    We ask our hotels to understand and to cooperate on sustainability initiatives. At the same time, we promote procurement of products and services with environmental and social considerations.
  • Consideration for and contribution to local communities
    We strive to contribute to the sustainable development of local community through cooperation with hotel lessees and operators as well as communication and collaboration with local residents and local governments in surrounding communities where hotels are located.
  • Initiatives for our officers and employees
    We establish work environment that allows diverse ways of working with work-life balance into consideration. We also consistently provide opportunities of professional education and training, with the aim to improve abilities and skills of our employees and raise awareness on sustainability.
  • Compliance as corporate citizens
    We comply with related laws and regulations as well as social norms, etc. and promote ethical and sincere business activities. Additionally, we strive to reduce governance risks through respecting fundamental human rights at our business and through establishing a proper compliance system.
  • Improvement of transparency and engagement with our stakeholders
    We disclose financial information as well as ESG related information in a timely and appropriate manner. We will sincerely listen to voices and opinions from our stakeholders through interactive communication, and utilize them to improve our initiatives.

Our System to Promote ESG

To promote initiatives based on "Sustainability Policy," we established "ESG Promotion Meeting". The ESG Promotion Meeting is consisted by Representative Director and President who acts as the Chief Executive, Director and Senior General Manager of Operation Division who acts as the Executive Officer for ESG promotion and officers and employees who participate in ESG promotion.).
The ESG Promotion Meeting is held quarterly in principle, and discusses concrete targets and initiatives in order to enhance sustainability. For the matters examined by the ESG Promotion Meeting, JHRA makes decisions and implements measures based on its decision making rules and the matters will be reported to JHR's Board of Directors as well as shared with all officers and employees in JHRA.
Furthermore, the ESG Promotion Meeting organizes sustainability training programs for officers and employees at least once a year. The program will provide opportunities for officers and employees to deepen their knowledge about sustainability.

ESG Assessment by Third Parties

■ Acquisition of SMBC Environmental Assessment

"SMBC Environmental Assessment Loan" is a loan which SMBC set condition of loan based on assessment on status of environmental considerations by the corporation based on environmental assessment standards developed independently by SMBC and the Japan Research Institute, Limited.
JHR has received an "A" grade under the assessment due to initiatives for environmental considerations. This grade is obtained in recognition of our implementation of excellent initiatives for environmental considerations in asset management.

In particular, the following factors are highly rated in the assessment.

A. JHR and the JHRA formulated "Sustainability Policy" and clearly state its position on considerations for environment and stakeholders such as local communities, etc. on its asset management.
B. As well as conversion to the LEDs in lightning fixtures and introduction of water-saving devices in our major hotels, JHR promotes initiatives to reduce environmental impact alongside with lessees, including adding the Green Lease clause in the lease agreements with the Twelve HMJ hotels.
C. JHR actively promotes to acquire third-party certifications such as BELS (Building-Housing Energy-efficiency Labeling System) to confirm credibility and objectivity of initiatives for environmental impact reduction in properties owned by JHR.

In response to effective usage of limited resources and aggravation of climate change issue, JHR and JHRA work on monitoring environmental performance, such as energy consumption, CO2 emissions, water consumption and amount of waste generated, etc. and strive to improve them continuously.

Environmental Target

We have set targets to reduce energy consumption and CO2 emissions for mid-to-long term.

  • We aim to reduce energy use intensity based on Act on Rationalizing Energy Use and CO2 emissions intensity from energy use by over 1% in annual average for entire portfolio as well as individual property in 5 years from FY2018.
  • We monitor progress towards mid-to-long term target and manage targets to comprehend the causes of variance in usage of energy at the "ESG Promotion Meeting."

Environmental Performance Data

Environmental Performance data of HMJ Hotels as of the end of each fiscal year is as follows.

* Each fiscal year runs from April to March.
* CO2 emissions is calculated by the Asset Management Company based on the calculation method of the "Greenhouse Gas Emissions Calculation, Reporting and Disclosure System" stipulated by the Japanese Ministry of Environment.

Actual Cases of Initiatives for Environment

  • 1. Switching to LED lightning
    We have been making an effort to reduce electricity usage by switching to LED from the conventional lightning in some part of our hotels.
  • 2. Introduction of water-saving devices
    We strive to reduce water consumption through installing water-saving devices for a restroom, a tap in the kitchen, etc. to adjust water use amount properly.
  • 3. Renewal of air conditioners
    We reduce electricity consumption by installing inverter control devices on air conditioners for better operational efficiency.
  • 4. Reuse of water
    Several of our hotels reduce tap water consumption by using well water instead. Some of our hotels in Okinawa are working on to reduce tap water consumption by reusing greywater.
  • 5. Green Leases
    In order to strengthen environmental management in our portfolio, we have concluded "Green Lease" agreements including provisions for cooperation in environmental initiatives, such as sharing energy data with the lessees of twelve HMJ Hotels, one of our major hotel groups.
  • 6. Green Building Certification
    We have acquired green building certifications from a third party, which means to confirm credibility and objectivity of our initiatives to reduce environmental impact.

■BELS (Building-Housing Energy-efficiency Labeling System) Evaluation

"BELS" is a public valuation and display system under a guideline by the Ministry of Land, Infrastructure, Transport and Tourism to evaluate the energy conservation performance of each building, which was launched in April, 2014. A third party institution verifies the energy performance of a building by evaluating its primary energy consumption and labels the performance of both new and existing buildings. The evaluation result is graded on five scales based on energy performance (from one star "★" to five stars "★★★★★.")

Hotel Nikko Alivila

Hotel Nikko Alivila

Location Nakagami-gun Okinawa BELS認証

 Evaluator:
 JAPAN ERI CO.,LTD.

Acreage 65,850.05 ㎡
Total Floor Space 38,024.98 ㎡
Structures and Stories SRC/10 stories above ground with 1 story below ground
Building Completion Apr. 1994
Details of Properties

Mercure Okinawa Naha

Mercure Okinawa Naha

Location Naha city Okinawa BELS認証

 Evaluator:
 JAPAN ERI CO.,LTD.

Acreage 2,860.69 ㎡
Total Floor Space 10,884.25 ㎡
Structures and Stories RC/14 stories above ground
Building Completion Aug. 2009
Details of Properties

JHR and JHRA endeavor to build sound relationships with our stakeholders including unitholders, hotel guests, lessees, operators, business partners including property managers, local communities, officers and employees of the JHRA and others, and to fulfill our social responsibility expected by each of them.

Approach to Major Stakeholders

  • Unitholders
    We strive to distribute stable profit, increasing dividend, maximize unitholder's profit for mid-to-long term and disclose information in a timely and appropriate manner.
  • Hotel guests
    In cooperation with hotel lessees and hotel operators, we offer comfortable and attractive hotels and promote consideration to health, safety and barrier-free access etc. in the hotels as well as to propel initiatives to improve resilience against natural disaster, etc.
  • Business partners such as hotel lessees, etc.
    We ask for understanding and cooperation to initiatives that consider sustainability. We also promote ESG initiatives in cooperation with hotel lessees, etc.
  • Local communities
    In cooperation with hotel lessees and operators, we strive to contribute to the sustainable growth of local community through communication and collaboration programs with stakeholders including local residents and local governments.
  • Officers and Employees of JHRA
    We provide officers and employees of JHRA with comfortable and attractive working environment and also consistently provide them with opportunities of professional education and training, in order to help our excellent human resources to keep high motivation to enhance their quality and have incentives to work for mid-to-long term.

Initiatives for Unitholders

  • 1. Proactive IR activities
    General Meeting of Unitholders and Briefing for unitholders: once in every two years
    Financial Results Briefing for institutional investors: twice a year (including mid-term Financial Result Briefing)
    We proactively participate in conference for investors in Japan and overseas.
  • 2. Proactive information disclosure
    We actively disclose information using various communication tools (Financial Results Briefing, Asset Management Report and Press Release, etc.). Moreover, we monthly disclose performance indicators in our major hotels.
  • 3. Benefits program for unitholders
    JHR has introduced benefits program for unitholders to obtain a better understanding of our hotels, improve unitholders’ satisfaction and expand the investor base. We also carry out a questionnaire survey to unitholder who used hotel under the program to obtain feedback to our hotels.

Initiatives for Local Communities (Collaboration with hotel lessees, etc.)

Oriental Hotel tokyo bay
Setting forth a corporate policy as "Hotel which is friendly to Earth, local community and family" Oriental Hotel tokyo bay proactively engages in events of local communities such as Shin-urayasu festival and disaster preparedness to communicate with local residents. Oriental Hotel tokyo bay also supports art and cultural activities in local community through hosting a free annual Christmas chapel concert and setting an oriental gallery. Moreover the hotel is dedicated to support child care such as cooperation with after-childbirth support project of Urayasu City and received first Kids Design Award as a hotel.

Hotel Nikko Alivila
Hotel Nikko Alivila holds up "Eco-friendly resort." The hotel participates in "Churaumi clean-up operation in Yomitan" hosted by Yomitan Village in Okinawa every year. Nirai Beach is located in front of Hotel Nikko Alivila, which is famous for its one of the best transparency in Okinawa’s main island. Hotel staffs clean the beach every morning and implement beach preservation activities. As a result of these activities, laying of eggs, and natural hatching by sea turtles are observed in the beach. Hotel Nikko Alivila is a member of the Sea Turtle Association of Japan.

Okinawa Marriott Resort & Spa
Okinawa Marriott Resort & Spa endeavors to work on medical issues in local areas through donating to MESH support, an incorporated non-profit organization which operates a helicopter emergency medical service (a private air ambulance) in northern area of Okinawa, a medically depopulated area. Okinawa Marriott Resort & Spa also aims to support community through invitation of primary school pupils to its pool for demonstration of life-saving training in case of disaster by water.

Initiatives for Employees of JHRA

  • 1. Creation of comfortable working environment and work life balance
    We believe that human resources are the most important asset of the company. We are aiming to create environment where employees can work comfortably and peacefully. We implement various initiatives from aspect of health and safety including work life balance, health and labor management, etc. and we also implement initiatives for job satisfaction.
  • 2. Consideration of human rights, diversity and equal opportunities
    We have stipulated in-corporate codes to prohibit discrimination by race, region, gender, age, origin, nationality and others.
  • 3. Development of human resources (development of expert abilities)
    In order to develop human resources, we bear all costs for employees, mainly in Asset Management and Investment division, to acquire certifications related to our business such as "ARES Certificated Master" (educational program that systematically teaches practical experts know-how in the fields of real estate and finance) and "Official Real Estate Consulting Master", as well as all cost to participate in training or seminars related to our business.
  • 4. Development of human resources (development of general abilities)
    We support costs for self-development by employees through "Cafeteria Plan" program in order to support their efforts to acquire certificates and to advance their skills, even if such self-developments are not directly related to our business.
  • 5. Evaluation and feedback
    We have established a system for communication between superiors and subordinates regarding result of evaluation and goal setting within performance evaluation process at end of the fiscal year through conducting interviews for feedback of evaluation and goal setting for next fiscal year.
  • 6. Employee satisfaction
    We conduct employee satisfaction survey as part of initiatives for establishment of favorable relationship with employees and the company. As well as we carry out improvement measures based on the survey result, we aim to make the company a better place by having more meaningful interactive communication between management members and employees including utilizing improvement ideas from employees' workshop.
  • 7. Benefits program and employee unit-ownership plan
    In addition to social security benefit, we provide income support for disability as well as support for cost of medical examination, etc.. We also provide assist for costs for education program for self-development without condition to acquire certificates.
    In addition to defined benefit pension plan, we introduced defined contribution pension plan (401k) and other measures to support asset buildup in the future and to fulfill livelihood after retirement.
    Furthermore, we allow our employees to own units of JHR, which we entrusted its asset management, and let officers and employees to have their motivation to enhance unitholders' values for mid-to-long term from the same standpoint of unitholders while paying careful attention to insider information. We support the program through Nippon Individual Saving Account program in workplace which JHRA contributes certain incentives in addition to funding by individual employees.

Initiatives for Governance

Operation of JHR is handled by the Board of Directors, on which one Executive Director and two Supervisory Directors serve as members and an independent auditor in addition to the General Meeting of Unitholders consisted by unitholders. For details, please refer to "Our Organization."
Remuneration of directors are stipulated in the Articles of Incorporation, and the upper limit is set at JPY800,000 per month per person for the position of Executive Director, and the specific monthly remuneration will be decided by the Board of Directors. The upper limit for the position of Supervisory Director is JPY500,000 per month per person, and the specific monthly remuneration will be decided by the Board of Directors.
JHR is prohibited from having any employees under the Act on Investment Trusts and Investment Corporations, and therefore JHR does not hire any employees and entrusts its asset management to its asset management company, JHRA.

Management System and Governance system

For management and governance system of JHR, please refer to "Corporate Governance."