Green Finance
Basic Policy
JHR manages its assets in consideration of "Environmental, Social and Governance (ESG)" and, as part of its efforts, aims to achieve a sustainable environment and society through the implementation of green finance.
Green Finance Framework
JHR formulated the Green Finance Framework in accordance with the Green Bond Principles, Green Loan Principles, Green Bond Guidelines, and Green Loan Guidelines in January 2024.
Use of Procured Funds
JHR will allocate the funds procured through the Green Finance to the following three purposes that meet the Eligibility Criteria below: (1) for the acquisition of green buildings or refinancing of the funds used for the acquisition, (2) for renovation work, and (3) for the acquisition or installation of renewable energy generation equipment.
●Eligibility criteria
- Green building
Properties that have obtained or renewed certification from any of the following third-party certification organizations or properties that intend to obtain or renew such certification:
|
: | 3-star, 4-star or 5-star ratings |
|
: | B+, A or S rank |
|
: | 3-star, 4-star or 5-star ratings (based on FY2016) |
|
: | Silver, Gold or Platinum |
|
: | Very good, Excellent or Outstanding |
- Renovation work
Renovation work that meets any of the following:
- Renovation work that has the effect of reducing any of the following: CO2 emissions, energy consumption, or water consumption by 30% in real estate managed by JHR
- Renovation work intended to improve one or more stars or ranks of certification by third-party certification organizations as defined in the Eligibility Criteria 1
- Renewable energy
Acquisition or installation of the following renewable energy power generation equipment.
- Solar power generation
- Onshore wind power generation (limited to equipment with output of less than 20kW)
- Biomass power generation (limited to equipment where fuel is sourced from its location or adjacent prefectures)
Process for Project Evaluation and Selection
JHRA's Finance Group and ESG Team will select project candidates for which the procured funds will be used, and decisions will be made by the Investment and Operation Committee, the Board of Directors and JHR’s Board of Directors.
Management of Procured Funds
JHR will promptly allocate the total procured funds to projects that meet the Eligibility Criteria.
JHR will set the maximum amount of the Green Finance as the total of the following funds ("Eligible Green Debt Amount") and will manage the balance of the Green Finance so that it does not exceed the Eligible Green Debt Amount:
- The amount calculated by multiplying the total acquisition price of green buildings held by JHR that meet the Eligibility Criteria 1 by the interest-bearing debt ratio (LTV) at the end of the fiscal period that can be calculated at the time of confirmation
- The expenditures required for renovation work that meets the Eligibility Criteria 2
- Funds for the acquisition and installation of renewable energy power generation equipment that meets the Eligibility Criteria 3
| Total acquisition price of green buildings: (1) | JPY74.6Bn |
|---|---|
| Interest-bearing debt ratio to total assets: (LTV) | 40.8% |
| Expenditures required for renovation work: (2)+(3) | － |
| Eligible Green Debt Amount: (1)×LTV+(2)+(3) | JPY30.4Bn |
Reporting
●Fund allocation status reporting
The fund allocation status of JHR related to the Green Finance is as follows.
| Green loan balance | JPY3.3Bn |
|---|---|
| Unallocated green loans | － |
＜Green Loan＞
| Loan Name | Loan Amount | Unallocated Amount | Borrowing Date | Principal Repayment Date | Collateral |
|---|---|---|---|---|---|
| Term Loan 101 | JPY3.3Bn | － | March 29, 2024 | March 29, 2030 | Unsecured/ Unguaranteed |
●Impact reporting
JHR will disclose the following information annually as long as the green finance balance remains:
- Reporting on green buildings
- Name and number of properties, total floor area, certification type and certification rank
- CO2 emissions (t-CO2), electricity consumption (MWh), and water consumption (㎥) of all subject properties
- Reporting on renovation work
Not applicable
- Reporting on renewable energy
Not applicable
Evaluation by External Organization
JHR has received the following evaluation from Japan Credit Rating Agency, Ltd. (JCR) regarding the eligibility of its Green Finance Framework.
| Evaluation Agency | Evaluation Subject | Evaluation | ||
|---|---|---|---|---|
| JCR | Green Finance Framework | Overall Evaluation | Green 1 (F) | |
| Greenness Evaluation (Use of Proceeds) |
g1 (F) | |||
| Management, Operation and Transparent Evaluation | m1 (F) | |||
| * | For details, please refer to JCR's news release and website. Website of JCR: https://www.jcr.co.jp/en/greenfinance/news/ |
|---|
Green Bonds
Basic Policy
As part of the initiatives to enhance sustainability, JHR issued twelfth unsecured investment corporation bonds of JHR (hereinafter "Green Bonds") in July 2019. JHR and the Asset Management Company believe that the issuance of the Green Bonds and expansion of fund procurement from investors interested in ESG investment will not only lead to strengthen the financing base of JHR, but also it will contribute to the expansion of the market of ESG investment.
| * | The Green Bonds were issued prior to the formulation of the above Green Finance Framework, and its framework has been set forth separately. |
|---|
Compliance of Eligible Criteria of Green Bonds
In order to meet the eligible criteria for the Green Bonds issued, JHR manages procured funds and limits the use of funds as follows.
Use of Procured Funds
- Part of funds to refinance renovation cost of Oriental Hotel Fukuoka Hakata Station (formerly Hotel Centraza Hakata)
Covers renovation cost which meet following criteria
- Funds for investments and construction works of equipment which have effects to reduce CO2 emissions such as air conditioners and electric facilities
- Funds for investment and construction works of equipment which can contribute to environment other than reduction of CO2 emissions such reduction of water usage
- Funds for construction works of renovation etc. of other hotels
- Funds for renewal of air conditioner, etc. which can reduce CO2 emissions at least 10%
Management of Procured Funds
Among the proceeds procured by the Green Bonds, "1. Funds for repayment for renovation cost of Oriental Hotel Fukuoka Hakata Station (1,600 million yen)" was already allocated to the repayment on July 31, 2019. On the other hand, "2. Funds for constructions for renovation etc. of the other hotels (400 million yen)" was separately managed by a leger and was held by cash or cash equivalents until they are all allocated by the end of January 2021.
Reporting
Under the framework of the Green Bonds, JHR discloses the allocation status of the funds procured by the Green Bonds and KPIs related to the effects on environmental improvement once a year on the website until the redemption date of the Green Bonds.
- Each index after the renovation of Oriental Hotel Fukuoka Hakata Station
| Water Consumption （㎥） |
Energy Consumption (MWh) |
CO2 Emissions (t-CO2) |
|---|---|---|
| 31,709 | 2,815 | 1,097 |
| (*) | The figures above are the aggregated numbers from April 2022 through March 2023. |
|---|
- The allocation status of the funds and the usage of the proceeds
(Unit: JPY MM)
| Name of Properties(*1) | Date | Amount | Usage of the Funds | CO2 Emissions Reduction Rate (estimated)(*2) |
|---|---|---|---|---|
| － | July 2019 to September 2019 |
15 | Cost of issuance of the Green Bonds, etc. | － |
| Oriental Hotel Fukuoka Hakata Station | July 2019 | 1,600 | Repayment of the loans related to the renovation cost | (16.0%) |
| Okinawa Marriott Resort & Spa | October 2019 | 29 | Construction works for renewal of air-conditioning system (renovation of restaurant) | (46.4%) |
| Okinawa Marriott Resort & Spa | October 2019 | 13 | Construction works for converting to LED lights (renovation of restaurant) | (74.9%) |
| Okinawa Marriott Resort & Spa | October 2019 | 10 | Construction works for renewal of washing and sterilizing equipment (renovation of restaurant) | (44.6%) |
| HOTEL ASCENT FUKUOKA | May 2020 | 100 | Construction works for renewal of heat source equipment | (10.2%) |
| dormy inn Kumamoto | July 2020 | 74 | Construction works for replacement of air conditioning equipment | (12.8%) |
| Hilton Tokyo Bay | August 2020 | 57 | Construction works for renewal of fan coil units in guest rooms | (27.2%) |
| Hilton Nagoya | January 2021 | 57 | Construction works for renewal of elevators | (20.0%) |
| Chisun Hotel Kamata | January 2021 | 15 | Construction works for replacement of control panel for elevator | (18.1%) |
| Washington Hotel Plaza Hakata, Nakasu |
January 2021 | 13 | Construction works for renewal and maintenance of fan coils | (33.2%) |
| International Garden Hotel Narita | January 2021 | 45 | Construction works for renewal of outdoor air conditioning equipment | |
| Total | 2,026 | |||
| Remaining amount | - | |||
| (*1) | Name of properties are the name when funds are allocated. |
|---|---|
| (*2) | The figures of CO2 emissions reduction rates are estimated by the Asset Management Company based on expert reports. |
Oriental Hotel Fukuoka Hakata Station
Construction works to save energy in large-scale renovations
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＜Before＞
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＜After＞
Okinawa Marriott Resort & Spa (current Oriental Hotel Okinawa Resort & Spa)
Construction works to save energy in restaurant renovations (after renovation)
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＜Entrance＞
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＜Interior＞
Summary of the Issued Green Bonds
| Name | Twelfth unsecured investment corporation bonds of JHR (Pari passu covenants between investment corporation bonds are attached) (Green Bonds) (Nickname : Hotel Green Bonds) |
|---|---|
| Issue amount | JPY2.0Bn |
| Interest rate | 0.400%/year |
| Issue date | July 31, 2019 |
| Redemption date | July 31, 2024 |
