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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 GRESB Real Estate Evaluation

The GRESB is an annual benchmarking program to evaluate Environment, Social and Governance (ESG) considerations of property companies and real estate funds, established in 2009 primarily by major European pension fund groups which took the lead in Principles for Responsible Investment (PRI). The GRESB Real Estate Assessment is distinguished by its comprehensive evaluation of initiatives for sustainability of property companies, REITs and real estate funds, not of individual properties.
JHR participated in GRESB Real Estate Assessment in 2018 and has acquired “Green Star” for third consecutive year.

JHR also selected for “Sector Leader” as a participant with the highest result in Asian Hotel Sector.

■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.

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.
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.
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.

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* 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.
* After reviewing the data aggregation criteria, the figures for FY2018 disclosed here are different from the figures previously disclosed.

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.

■CASBEE Certification for Buildings

“Comprehensive Assessment System for Built Environment Efficiency (CASBEE)” is a method for evaluating and rating the environmental performance of buildings. It is a system to comprehensively evaluate the quality of buildings, including interior comfort and landscape considerations, as well as environmental considerations such as energy conservation and the use of materials and equipment with low environmental loads.

CASBEE for Buildings (Existing Buildings) is an evaluation method which targets buildings with an operational record of at least one year after completion, and assesses buildings based on annual performance of operations, deterioration of buildings and indoor environments. Assessment results by CASBEE are indicated in a scale with the following five ranks: “S: Superior,” “A: Very Good,” “B+: Good,” “B-: Slightly Poor,” and “C: Poor.”

See here for details of CASBEE

Hilton Tokyo Odaiba

Hilton Tokyo Odaiba

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Location 1-9-1, Daiba, Minato-ku, Tokyo CASBEE認証

CASBEE for Buildings
(Existing Buildings) Rank B+ (Good)

Acreage 18,825.30 sqm
Total Floor Space 64,907.76 sqm
Structures and Stories S/SRC with flat roof, 14 stories above ground and 1 story below ground
Building Completion Jan. 1996
Details of Properties

■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 "★★★★★.")

See here for details of BELS(Japanese only)

Hotel Nikko Alivila

Hotel Nikko Alivila

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Location Nakagami-gun Okinawa BELS認証


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

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Location Naha city Okinawa BELS認証


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.
  • For details, see the website of Japan Hotel REIT Advisors Co., Ltd., the Asset Management Company.

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."

As part of the initiatives to enhance sustainability, JHR issued the Green Bonds in July 2019. JHR and the Asset Management Company believe that the issuance of the Green Bonds will not only lead to strengthen the financing base of JHR by expanding fund procurement from investors interested in ESG investment, but also it will contribute to the expansion of the market of ESG investment.

Compliance of Eligible Criteria of Green Bonds

In order to meet the eligible criteria for the Green Bond issued (the twelfth unsecured investment corporation bonds), JHR manages procured funds and limits the use of funds as follows.

Use of Procured Funds

  • ① Funds for repayment for renovation cost of Oriental Hotel Fukuoka Hakata Station (formerly Hotel Centraza Hakata)

Out of the renovation cost, items applicable to the followings:

  • Funds for capital expenditures and constructions of equipment which have effects on CO2 reduction such as air conditioning equipment and electric equipment, etc.
  • Funds for capital expenditures and constructions of equipment which contributes to environment other than CO2 reduction, such as improvement of water consumption
  • ② Funds for constructions for renovation etc. of the other hotels
    Out of constructions cost for renovation in the future, costs related to renewal of the air conditioning equipment, etc. which have effects on CO2 reduction by 10% or more

Management of Procured Funds

Among the proceeds from the Green Bonds, “①Funds for repayment for renovation cost of Oriental Hotel Fukuoka Hakata Station (JPY1,600 million)” was already allocated to the repayment on July 31, 2019. On the other hand, “②Funds for constructions for renovation etc. of the other hotels (JPY400 million)” has been separately managed by a leger and is held by cash or cash equivalents until they are allocated.


Under the Green Bond Framework, JHR discloses the allocation status of the funds procured by the Green Bonds and KPIs related to the environment improvement effects once a year on the website until the redemption date of the Green Bonds.

① Each index after the renovation of Oriental Hotel Fukuoka Hakata Station 

Water consumption
Energy consumption
CO2 emissions
50,335 3,476 2,047
(Note) The figures above are the aggregated numbers from April 2019 through March 2020.

② The allocation status of the funds and the usage of the proceeds

(unit: JPY M)

Property Date Cost Usage of the funds CO2 emission
reduction rate
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 Renewal of air-conditioning system (renovation of restaurant) (46.4)%
Okinawa Marriott Resort & Spa October 2019 13 Construction work for converting to LED lights (renovation of restaurant) (74.9)%
Okinawa Marriott Resort & Spa October 2019 10 Renewal work of washing and sterilizing equipment (renovation of restaurant) (44.6)%
HOTEL ASCENT FUKUOKA May 2020 100 Renewal work of heat source equipment (10.2)%
Dormy Inn Kumamoto July 2020 74 Replacement of air conditioning equipment (12.8)%
Total 1,839
Remaining cost 161
(Note 1) The status of the funds is as of July 31, 2020.
(Note 2) These figures related to the CO2 emissions are estimated by the Asset Management Company based on expert reports.

Energy-saving work for large-scale renovations for Oriental Hotel Fukuoka Hakata Station

  • <Before>
  • <After>

Energy-saving work for restaurant renovations for Okinawa Marriott Resort & Spa (after renovation)

  • <Entrance>
  • <Interior>

Summary of the Issued Green Bonds

Name Twelfth unsecured investment corporation bonds of JHR
(Pari passue covenants between investment corporation bonds are attached) (green bonds)
(nickname: Hotel Green Bonds)
Issue price JPY2Bn
Issue price 0.400%/year
Issue date July 31, 2019
Redemption date July 31, 2024
Third-party evaluation of the bonds news release by Japan Credit Rating Agency, Ltd. (on July 23, 2019)