JHR’s Sustainability Approach

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-party institutions 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.

In order to carry out initiatives based on the Sustainability Policy in an ongoing, organized manner, JHRA has established ESG Promotion Committee and developed the system shown below.
ESG Promotion Committee consist of management members and officers and employees chosen from various groups involved in promoting ESG, with the President & CEO acting as the chief executive and the Board Director & Head of Finance and Planning Division acting as the operating officer.

System Overview

Annual Schedule

Frequency of Meetings and Trainings

ESG Assessment by Third-party Institutions

Acquisition of GRESB Real Estate Assessment

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 from 2018 and has acquired "Green Star" for six consecutive years.

JHR was also selected as "Sector Leader" of Asian Hotel Sector for four consecutive years since 2020 as a participant with the highest result.

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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 JHRA have formulated a Sustainability Policy which clearly states their position of considering the environment and stakeholders such as local communities in their 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 fixed term lease agreements with the HMJ Group hotels, the major hotel group of JHR.
• 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 reduction of environmental impact in properties owned by JHR.

Timeline of Achievements

(*1)	Based on research by JHRA based on public information.
(*2)	BELS (Building-Housing Energy-Efficiency Labeling System) is a display system of energy conservation performance of a building set by Ministry of Land, Infrastructure, Transport and Tourism.
(*3)	"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.
(*4)	Name of properties is as of the date when the construction works were implemented.
(*5)	CASBEE (Comprehensive Assessment System for Built Environment Efficiency) is a method for evaluating and rating the environmental performance of buildings. It is a system that comprehensively evaluates the quality of a building, including environmental considerations such as energy conservation, use of materials and equipment with low environmental impact, as well as indoor comfort and landscaping.
(*6)	TCFD is an abbreviation for Task Force on Climate-related Financial Disclosures.
(*7)	Properties owned by JHR are managed by hotel lessees, etc. GHG emissions of JHR fall under Scope 3, Category 13, Leased Assets (Downstream).
(*8)	The GHG emissions (GHG emissions intensity) for FY2017 (Baseline fiscal year, April 2017 to March 2018) is 0.135 (t-CO2/㎡).
(*9)	JHR published its first ESG report in March 2023 and plans to release subsequent reports annually every March.