NOMURA REAL ESTATE MASTER FUND, INC.

TSE code :3462

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Sustainability Initiatives

Policy

Nomura Real Estate Asset Management Co., Ltd., an asset management company of Nomura Real Estate Master Fund, Inc. (hereinafter referred to as the "Investment Corporation"), established the Sustainability Policy in December 2015.
The Investment Corporation will, along with the asset management company, carry out asset management with consideration for the environment, society and governance (hereinafter collectively referred to as "ESG") in order to enhance unitholders' value over the medium to long term.

Sustainability Policy

  • 1.Efforts to save energy and create energy We will strive to introduce technologies/facilities that contribute to save and/or create energy while proactively promoting efficient use of energy in real estate management.
  • 2.Efforts to save resources and reduce waste We will strive to implement water saving and waste reduction (3Rs of reduce, reuse and recycle) for effective utilization of resources required in business activities.
  • 3.Efforts for safety and security as well as improvement of the level of customer satisfaction We will strive to improve the level of customer satisfaction by promoting disaster prevention/BCP measures for the safety and security of our clients including tenant companies or facility users, and through other means.
  • 4.Efforts to develop in-house systems and educate executives and employees We will not only fully enforce compliance but also develop in-house systems to promote our initiatives based on this policy, educate executives and employees, and conduct activities to raise awareness.
  • 5.Collaboration with outside stakeholders We will strive to collaborate with stakeholders including our business partners such as property management companies, our clients such as tenant companies and facility users, and local communities in order to practice initiatives based on this policy.
  • 6.Information disclosure to investors, etc. We will strive to proactively disclose information on the status of activities related to ESG to stakeholders such as investors.

Sustainability Targets

The Investment Corporation has established sustainability promotion rules to encourage greater consideration for ESG matters as outlined in the Sustainability Policy. We have made concrete decisions in regard to in-house organizational systems collaboration with external stakeholders and information disclosure policy with the aim of ensuring that everyone is sufficiently prepared to promote sustainability. In addition, we have set the following medium- to long-term energy use reduction targets and target management procedures.

  • (1) Establishment of medium- to long-term targets to reduce energy use and CO2 emissions ・In conformance with the Act on the Rational Use of Energy, in the five-year period starting from fiscal 2016, the target for the Investment Corporation at both the portfolio and individual property levels is an average annual reduction of 1% or more energy use intensity based on the standards outlined in the Act on the Rational Use of Energy. ・The properties subject municipal ordinances related to global warming countermeasures will set their targets individually.
  • (2) Management of targets ・As a general principle, every three months the Investment Corporation carries out target management, reviews the progress made toward achieving its medium- to long-term targets and analyzes the causes behind changes in usage at a general meeting called Sustainability Promotion Conference.

External Evaluation

1. Participate in GRESB
1-1. About GRESB
Global Real Estate Sustainability Benchmark (GRESB) is a benchmark survey established by major European pension fund groups to measure ESG considerations of real estate firms and management institutions.
In its assessment, rather than simply focusing on individual real estate holdings, GRESB evaluates real estate companies, REITs and private real estate funds on the basis of their sustainability initiatives, thus distinguishing itself from other real estate-related ESG benchmarking programs.
GRESB is widely used as a standardized rating system to assess investees' ESG initiatives, which have become a key factor affecting institutional investors' investment decisions from a long-term perspective.
In 2017, 850 real estate companies and funds participated in the assessment, representing more than 77,000 assets across 62 countries, with a value of USD 3.7 trillion.
Furthermore, Nomura Real Estate Asset Management Co., Ltd., NMF's Asset Management Company, became a member of the GRESB Real Estate Assessment in 2017. Going forward, the Asset Management Company will continue to participate in GRESB assessments and work to promote sustainability.

Please click here (English website) for details of GRESB.

1-2. About GRESB Real Estate Ratings
Under the GRESB program, Nomura Master Fund received a “Green Star” rating for a second consecutive year. The “Green Star” rating is bestowed only to applicants that earn outstanding evaluations in terms of “management & policy” and “implementation & measurement”-two operational dimensions subject to assessment in light of efforts aimed at addressing environmental concerns and sustainability issues. We received a “5-Star” rating, the highest under a five-grade evaluation system that reflects global ranking based on an applicant's total scores.

GRESB

<The factors that helped it earn these ratings>
・Initiatives to secure robust collaboration and partnerships with stakeholders
・Efforts aimed at enhancing the content of information disclosure pertaining to its sustainability initiatives
・A proactive attitude toward acquiring “Green Building” and other such certifications

1-3. About GRESB Public Disclosure Level Evaluation Scheme
We received an “A” rating, the highest rating given under the five-grade GRESB Public Disclosure Level evaluation scheme introduced in April 2017 for our proactive information disclosure practices in connection with environmental and sustainability initiatives.

GRESB

2. Acquisition of DBJ Green Building Certification
The DBJ Green Building Certification is a certification system created by the Development Bank of Japan (DBJ) to support real estate properties with environmental and social awareness. The certification system evaluates convenience, comfort, disaster/crime prevention, energy-saving, involvement with communities, etc. in addition to environmental performance, and evaluation results are expressed in five-level ratings (5 stars ★★★★★ to 1 star ★).

DBJ Green Building Certification

Acquisition status of DBJ Green Building Certification

All Properties Certified Properties Certified Rate
Number of Properties

(※1)

255 32 12.5%
Total Floor Area(㎡)

(※2)

2,068,213.91 848,870.76 41.0%
(note1) Calculated based on properties in the fund excluding land.
(note2) Calculated based on the floor area multiplied by the fund share of the property or on the floor area of exclusively owned space.

The following properties among properties owned by the Investment Corporation received the certification.

Please click here for details of DBJ Green Building.

Specific initiatives

1. Initiatives on environment
Installment of solar power generation
Utilization of renewable energy through solar panels installed on the rooftops of logistics facilities.
Energy-saving measures
Efforts to reduce energy consumption are taken, such as installment of LED lighting in common areas of facilities, renewal of air-conditioning facilities and installment of water-saving toilets.
2. Collaboration with stakeholders
2-1 Initiatives to enhance customer satisfaction and engage with tenants
● Promotion of disaster prevention/BCP measures
Countermeasure work against long-duration seismic activity has been underway at Shinjuku Nomura Building. We prioritize the safety and security of tenants and visitors with the installation of earthquake resistance comparable to the most advanced skyscraper buildings.
● Elevators are equipped with emergency disaster kits and disaster kits have been distributed to tenants for the safety and security of tenants and visitors.
● Tenant engagement programs
We are engaged in environmental activities in collaboration with tenants. Specifically, we provide information on their energy and water consumption as well as waste emissions while periodically hosting environmental and energy-saving council meetings to discuss initiatives to reduce these consumption/ emission. We have also prepared and distributed a sustainability guidebook for tenants.
● Undertaking customer satisfaction surveys
We undertake customer satisfaction surveys to stay apprised of requests from and opinions of our tenants, residents and users. The latest survey was carried out in 2015. The results of these surveys are shared with property managers, building management firms, developers and other relevant parties and utilized to enhance the features and equipment of each property as well as services available to its tenants.
● For other initiatives on tenant services taken by the Nomura Real Estate Group, please visit the following websites.

2-2 Initiatives with our supply chain
● Sustainable procurement
Prior to initiating transactions with any supplier or contractor, we assess their operations from the perspective of environmental consideration based on specific requirements, including whether they have environmental standards in place for their procurement process. Our requirements also examine such matters as corporate ethics; human rights protection; occupational safety and health; product safety standards in relation to human health; and the application of sustainability requirements to subcontractors.
2-3 Initiative on contributing to local society
● Connecting with local communities
We hold various events to promote communication with tenants and local residents.
● Seeking improvement(s) in the safety of and convenience to tenants, we have installed AEDs in the building and implemented a car-sharing system in the residential parking lot, etc.
2-4 Implementing programs for employees
● Undertaking employee satisfaction surveys
Nomura Real Estate Asset Management Co., Ltd., which serves as an asset management company for Nomura Real Estate Master Fund. Inc., undertakes periodic employee satisfaction surveys. The latest survey was carried out in 2016. These surveys are intended to learn how employees see such matters as goals of their respective business units as well as their job duties and workplace environments (in terms of occupational health and welfare). Results of these surveys are utilized to plan and implement measures aimed at developing their potential.
● Providing various employee training programs
In line with annual employee education plans, we are conducting training sessions centered on such key sustainability themes as energy and resource saving, environmental laws and regulations, and stakeholder engagement while providing legal compliance training.

Environmental performance results

Actual volume of energy and water consumption of and GHG emissions from Nomura Real Estate Master Fund properties (note: figures only represent specific properties for which relevant data was available)

Fiscal year Sector Energy consumption
(MWh)
Water consumptio
(m³)
GHG emissions*
(t)
2015 Total 241,669 1,109,342 101,495
Office 164,357 646,680 65,293
Retail Facilities 56,826 421,544 24,555
Logistics 18,740 36,568 10,367
Residential 1,746 4,550 1,280
2016 Total 337,879 1,634,647 171,202
Office 177,538 688,048 74,616
Retail Facilities 118,513 817,450 53,121
Logistics 34,027 67,060 19,724
Residential 7,802 62,089 4,077
Calculated based on Japan's Act on Promotion of Global Warming Countermeasures. An emissions coefficient is based on the actual emissions coefficient announced by the Ministry of the Environment and updated annually as stipulated by the Ordinance related to Calculation of Greenhouse Gas Emissions from Specified Emitters in the Course of Their Business Activities. Scope 3 emissions are excluded from the scope of calculation.
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