Initiatives for Environment

Environmental Targets

CIM has formulated the "Energy Conservation Policy", the "Greenhouse Gas Emissions Reduction Policy", the "Water Saving Policy" and the "Waste Management Policy" which stipulate efforts to reduce environmental impact in real estate investment management operations. Through the cycle of planning, implementation, performance management, and improvement set forth in the "Environmental Management System (EMS) Operation Manual" that stipulates the details for operating these policies, CIM will strive to continuously reduce the environmental impact.

In accordance with the Act on the Rationalization etc. of Energy Use (Energy Conservation Act), CIM sets the following quantitative targets for the continuous reduction of energy consumption throughout the portfolio.

Long-term target 1: Reduce annual energy consumption intensity within the owner management scope (Note 1) by 5% in Fiscal Year 2024 from Fiscal Year 2019 levels (Each fiscal year is April to March of the following year. The same applies hereafter)
Long-term target 2: Reduce the annual energy consumption intensity within the tenant management scope (Note 2) by 1% in Fiscal Year 2024 from Fiscal Year 2019 levels

Regarding greenhouse gas emissions, in accordance with the reduction target for energy consumption, the basic target for the adjusted scope 1+2 (Note 3) is to reduce the emission intensity by 5% in Fiscal Year 2024 from Fiscal Year 2019 levels. The basic target for the adjusted scope 3 (Note 4) and the adjusted scope 1+2+3 is to reduce the emission intensity by 1% in Fiscal Year 2024 from Fiscal Year 2019 levels.

Regarding water usage and waste volume, our target is not to increase each intensity level in the five years from Fiscal Year 2020 to Fiscal Year 2024 compared to Fiscal Year 2019 levels.

The Sustainability Committee compares target and actual values and appropriately considers measures to achieve each environmental target. The scope of the initiatives for reducing energy consumption and greenhouse gas emissions is the energy consumption through the use of lighting, air conditioning, and various facilities in INV's portfolio, specifically refers to 1) purchased electricity, 2) city gas/LP gas, etc., 3) heavy oil/kerosene/gasoline, etc., and 4) purchased steam, hot and cold water, and district heating and cooling etc. consumed on-site.

Progress towards the long-term targets is as follows.

Energy Consumption Intensity (MWh/㎡)

	FY2019	FY2020		FY2021		FY2022
	FY2019	FY2020	YoY	FY2021	YoY	FY2022	YoY	Difference (vs 2019)
Owner Management Scope (Note 1)	0.094	0.093	-0.7％	0.092	-1.6％	0.088	-3.8％	-5.9％
Tenant Management Scope (Note 2)	0.328	0.260	-20.7％	0.274	+5.2％	0.302	+10.2％	-8.1％

Greenhouse Gas Emission (t-CO₂eq) and Intensity (t-CO₂eq/㎡)

		FY2019	FY2020		FY2021		FY2022
		FY2019	FY2020	YoY	FY2021	YoY	FY2022	YoY	Difference (vs 2019)
Adjusted Scope 1 (Note 3)	Total Amount	21	21	0.0％	17	-19.0％	17	-1.5％	-20.2％
Adjusted Scope 1 (Note 3)	Intensity	0.001	0.001	0.0％	0.000	-19.0％	0.000	-1.5％	-20.2％
Adjusted Scope 2 (Note 3)	Total Amount	738	706	-4.3％	702	-0.6％	659	-6.0％	-10.7％
Adjusted Scope 2 (Note 3)	Intensity	0.041	0.039	-4.3％	0.039	-0.6％	0.036	-6.0％	-10.7％
Adjusted Scope 1+2	Total Amount	760	728	-4.2％	719	-1.2％	676	-5.9％	-10.9％
Adjusted Scope 1+2	Intensity	0.042	0.040	-4.2％	0.040	-1.2％	0.037	-5.9％	-10.9％
Adjusted Scope 3 (Note 4)	Total Amount	30,645	23,818	-22.3％	25,003	+5.0％	25,746	+3.0％	-16.0％
Adjusted Scope 3 (Note 4)	Intensity	0.102	0.079	-22.3％	0.083	+5.0％	0.086	+3.0％	-16.0％
Adjusted Scope 1+2+3	Total Amount	31,405	24,546	-21.8％	25,722	+4.8％	26,422	+2.7％	-15.9％
Adjusted Scope 1+2+3	Intensity	0.099	0.077	-21.8％	0.081	+4.8％	0.083	+2.7％	-15.9％

Water Usage Intensity (㎥/㎡) and Waste Volume Intensity (t/㎡)

	FY2019	FY2020		FY2021		FY2022
	FY2019	FY2020	YoY	FY2021	YoY	FY2022	YoY	Difference (vs 2019)
Water Usage Intensity	3.833	2.147	-44.0％	2.448	+14.0％	3,275	+33.8％	-14.6％
Waste Volume Intensity	0.011	0.006	-44.4％	0.007	+19.6％	0.009	+33.3％	-11.4％

(Note 1): In principle, the owner management scope refers to common areas of residences and retail facilities owned by INV.
(Note 2): In principle, the tenant management scope refers to whole area of hotels and tenant-exclusive areas of residences and retail facilities owned by INV.
(Note 3): Scope 1 covers direct greenhouse gas emissions from fuel consumption within the owner management scope, and Scope 2 covers indirect greenhouse gas emissions from electricity, heat, etc. purchased within the owner management scope. In addition, the target properties are those that (i) were held throughout the aggregation period and (ii) have data that enables comparison under the same conditions. Adjustments based on occupancy rates will be made on the actual values. Hereinafter the same.
(Note 4): Scope 3 covers greenhouse gas emissions derived from tenant management scope.
(Note 5): Each intensity is based on 95 properties (52 properties for waste volume intensity) in the portfolio that have been held from the beginning of FY2019 to the end of FY2022 and for which data that enables comparison under the same conditions can be obtained.

Environmental Performance

The environmental performance of INV's portfolio for each fiscal year (April to March of the following year) is as follows.

		FY2019 Actual (Note 3)	FY2020 Actual (Note 3)	FY2021 Actual (Note 3)	FY2022 Actual (Note 3)
		FY2019 Actual (Note 3)	FY2020 Actual (Note 3)	FY2021 Actual (Note 3)	FY2022 Actual (Note 3)	Coverage Ratio (Note 4)
Number of Target Properties (Note 1)		152	148	142	128	-
Energy Consumption	Total Amount (MWh)	273,223	195,743	223,678	232,464	88.5％
	Intensity (MWh/㎡)	0.358	0.261	0.300	0.322	88.5％
	Renewable Energy (MWh: included in total amount)	3,797	3,695	3,505	4,355	24.8％
Greenhouse Gas Emissions	Total Amount (t-CO₂eq)	80,618	58,250	63,321	65,222	88.5％
Greenhouse Gas Emissions	Intensity (t-CO₂eq/㎡)	0.105	0.077	0.085	0.090	88.5％
Water Usage	Total Amount (㎥)	2,821,557	1,712,511	1,944,347	2,595,546	89.0％
Water Usage	Intensity (㎥/㎡)	3.637	2.253	2.578	3.582	89.0％
Waste Volume	Total Amount (t)	7,150	4,282	5,180	5,302	83.7％
	Intensity (t/㎡)	0.010	0.006	0.007	0.007
	Recycling Rate (Note 2) (％)	20.9	19.4	17.3	25.1

(Note 1): Properties acquired or sold during the relevant period are included.
(Note 2): Recycling rate (%) is calculated by dividing the recycled weight (t) by the total weight of waste (t). Hereinafter the same shall apply.
(Note 3): Actual value of each property is based on the data during the holding period by INV. For co-ownership properties, actual value of the entire property is reported regardless of INV's ownership ratio. Hereinafter the same shall apply.
(Note 4): Coverage ratio (%) is calculated by dividing floor area of the portion where the data was collected (㎡) by total floor area (㎡).

The following are actual values (Note 1) for properties in INV's portfolio that can be compared under the same conditions (Note 2).

		FY2019	FY2020		FY2021		FY2022
		FY2019	FY2020	YoY	FY2021	YoY	FY2022	YoY	Difference (vs 2019)
Energy Consumption (95 properties)	Total Amount (MWh)	99,887	79,523	-20.4％	83,550	+5.1％	91,818	+9.9％	-8.1％
	Intensity (MWh/㎡)	0.315	0.251	-20.4％	0.263	+5.1％	0.290	+9.9％	-8.1％
	Renewable Energy (MWh: included in total amount)	2,118	2,208	+4.3％	2,135	-3.3％	2,214	+3.7％	+4.6％
Greenhouse Gas Emissions (95 properties)	Total Amount (t-CO₂eq)	31,406	24,546	-21.8％	25,723	+4.8％	26,423	+2.7％	-15.9％
Greenhouse Gas Emissions (95 properties)	Intensity (t-CO₂eq/㎡)	0.099	0.077	-21.8％	0.081	+4.8％	0.083	+2.7％	-15.9％
Water Usage (95 properties)	Total Amount (㎥)	1,213,482	679,860	-44.0％	774,985	+14.0％	1,036,889	+33.8％	-14.6％
Water Usage (95 properties)	Intensity (㎥/㎡)	3.833	2.147	-44.0％	2.448	+14.0％	3.275	+33.8％	-14.6％
Waste Volume (52 properties)	Total Amount (t)	3,275	1,820	-44.4％	2,177	+19.6％	2,903	+33.3％	-11.4％
	Intensity (t/㎡)	0.011	0.006	-44.4％	0.007	+19.6％	0.010	+33.3％	-11.4％
	Recycling Rate (％)	23.1	26.5	+3.4pt	21.9	-4.6pt	21.2	-0.7pt	-1.9pt

(Note 1): A certain adjustment has been made by CIM.
(Note 2): Properties that have been held from the beginning of FY2019 to the end of FY2022 and for which data that enables comparison under the same conditions can be obtained. The following properties are excluded because it is difficult to make an adjustment for comparison under the same conditions: (i) properties acquired or sold during the relevant period, (ii) properties for which the occupancy rate has not been disclosed to INV, (iii) properties with a month when the occupancy rate became 0% due to a temporary closure. The number of target properties for each item of the environmental data is shown in parenthesis under each item name.

Initiatives for Green Buildings

In order to promote initiatives for green buildings, the real estate that is environmentally and socially friendly, INV has implemented the following renovations in our portfolio and introduced effective equipment to reduce environmental impact, such as promoting energy conservation, reducing CO2 emissions, and effectively utilizing water resources.

Introduction of large-scale energy-saving equipment (cold/hot water generator, hot water heater, etc.)
Water saving by recycling pool drainage
Introduction of LED lighting
Introduction of the water-saving type toilet
Installation of a water-saving shower
Installation of gas cogeneration, inverter, etc.
Automatic meter readings (AMR)
Introduction of BEMS
Installation of high-efficiency equipment and appliances
Introduction of on-site renewable energy

Green Lease

Green lease is an initiative in which owners and tenants of a real estate asset voluntarily agree in a lease contract to work together on measures related to the environmental consideration of the real estate and put them into practice. INV has been actively adopting green lease and, together with the agreed tenants, has been actively maintaining and improving the environmental performance of INV's properties.

Track record of concluding green leases with the agreed tenants including INV's main tenant, MyStays Hotel Management Co., Ltd. ("MHM") that operates most of INV's hotels as of the end of June 2022
Number of hotels: 79
Total floor area ratio covered in the entire portfolio: 65.6%

Distribution of Sustainability Guides for Tenants

We distribute examples of initiatives on "sustainable hotel management" to hotel operators, who are tenants, and encourage them to work to reduce the environmental impact of hotel management and raise environmental awareness among guests.

Initiatives by Hotel Operator

MHM has implemented various initiatives for Energy Conservation and CO₂ Reduction.

Eco-friendly plan at hotel "ECO-Plan"
Encouraging guests to use eco-friendly plans by lowering the price of plans that do not require linen exchange when guests stay 7 consecutive nights
Conducted energy-saving checks
Reducing greenhouse gas emissions from Food Transportation at Hotels (Hotel Epinard Nasu)
Contributing to CO₂ reductions by cooperating with farmers and dairy farmers in Tochigi Prefecture to reduce the procurement from prefectures other than Tochigi

Green Finance

Fund Procurement through Green Finance

INV manages its assets with consideration for "Environmental, Social and Governance (ESG)" and as part of its efforts, aims to realize a sustainable environment and society through the implementation of green finance (green bonds, green loans, etc.).

Green Bond Overview

A green bond is a bond issued to raise funds allocated to environmentally friendly projects, and is generally issued in accordance with the "Green Bond Principles" set forth by the International Capital Markets Association.

Green Loan Overview

A green loan is a borrowing to raise funds to be allocated to environmentally friendly projects, similar to green bonds, and is issued in accordance with the "Green Loan Principles", which are international guidelines.

Green Finance Framework

INV has formulated a green finance framework (the "Green Finance Framework") in accordance with the "Green Bond Principles" and "Green Loan Principles" to conduct green financing including the issuance of green bonds.

Please refer to the following for the detail of the Green Finance Framework.
INV's Green Finance Framework (as of August 2023) (PDF)

Overview of the Green Finance Framework

Use of the funds procured through the green finance
INV will appropriate all the funds procured through green bonds or green loans for the acquisition or renovation of Green Buildings that meet eligibility criteria, or for the refinance of those funds used for the acquisition or renovation of Green Buildings. The eligibility criteria are as follows;

"Eligibility Criteria"
(1) Green Building
Properties that have or will have one of the following third-party certifications in effect as of the date of payment of the green bond or as of the date of borrowing of the green loan.
(i) BELS Certification: five stars, four stars or three stars
(ii) CASBEE Appraisal: rank S, A, or B+
(iii) DBJ Green Building Certification: five stars, four stars or three stars
(iv) LEED Certification: Platinum, Gold or Silver

(2) Renovation
Renovation of facilities that meets either of the following (i) or (ii).
(i) Renovation work intended to improve the number of stars or the rank by one or more for properties that have or will have one of the third-party certifications listed in Eligibility Criteria-1.
(ii) Renovation work that is expected to reduce either energy consumption, greenhouse gas emissions, or water consumption by 30% or more.

Project evaluation and selection process
The Finance Department and Asset Management Department of CIM will select the eligible projects for which funds will be appropriated, and the Sustainability Committee will make the final decision. The President and CEO of CIM is the final decision-maker for the Sustainability Committee.

Management of proceeds
The amount of debt calculated by (a) the amount obtained by multiplying the total acquisition value of the Green Buildings × (b) the interest-bearing debt ratio (as of the end of the most recent fiscal period) ＋ (c) the amount invested in renovation (the "Eligible Green Debt Amount"), will be the upper limit of the amount that can be procured through green finance, and we will manage the balance of green finance so that it does not exceed the Eligible Green Debt Amount.

(a) Amount of the total acquisition value of the Green Buildings (Note 1)	JPY 103.7 billion
(b) Interest-bearing debt ratio (Note 1)	47.2％
(c) Amount invested in renovation	-
Eligible Green Debt Amount (a)×(b)＋(c)	JPY 48.9 billion

(Note 1) As of the end of December 2023.

Reporting
(1) Fund Allocation Status Reporting
INV's appropriation of funds related to Green Finance is as follows;

Total amount of outstanding green bonds	JPY 3,500 million
Total amount of unappropriated green bonds	-

Total amount of outstanding green loans	JPY 9,999 million
Total amount of unappropriated green loans	-

Green Bonds

Name	Issue Amount (JPY million)	Unappropriated Amount (JPY million)	Interest Rate	Issue Date	Redemption Date	Allocation Status
9th series unsecured corporate bonds (green bonds)	1,700	-	1.200％	Sep. 21, 2023	Sep. 21, 2028	Appropriated to repay borrowings raised as part of the acquisition of Hotel MyStays Premier Akasaka, a green building that satisfies the eligible criteria
10th series unsecured corporate bonds (green bonds)	3,500	-	1.297％	Dec. 14, 2023	Dec. 14, 2028	Aappropriated to repay borrowings raised as part of the acquisition of Hotel MyStays Fuji Onsen Resort, a green building that satisfies the eligible criteria

Green Loans

Name / Lenders	Borrowing Amount (JPY million)	Unappropriated Amount (JPY million)	Interest Rate	Borrowing Date	Maturity Date	Allocation Status
New Syndicate Loan (012) Mizuho Bank, Ltd. MUFG Bank, Ltd. Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Trust Bank, Limited Development Bank of Japan, Inc. San ju San Bank, Ltd. The Nomura Trust and Banking Co., Ltd.	8,970	-	3-month TIBOR +0.60000	Jan. 16, 2024	Mar. 14, 2030	Appropriated to repay borrowings raised as part of the acquisition of Hotel MyStays Fuji Onsen Resort and Royal Parks Momozaka, both green building that satisfy the eligible criteria.
New Syndicate Loan (013) Mizuho Bank, Ltd. MUFG Bank, Ltd. Sumitomo Mitsui Trust Bank, Limited Development Bank of Japan, Inc.	1,029	-	3-month TIBOR +0.60000	Mar. 14, 2024	Mar. 14, 2030	Appropriated to repay borrowings raised as part of the acquisition of Hotel Epinard Nasu, a green building that satisfies the eligible criteria.

(2) Impact Reporting
To the extent practicable, the following information will be disclosed on an annual basis on INV's website.

Type of environmental certifications that meets Eligibility Criteria
Please refer to "The List of Certified Properties" in "Third Party Assessment".

Energy Consumption, Greenhouse Gas Emission, Water Usage and Waste Volume
Please refer to "Environmental Targets".