Sustainability Policy / Sustainability Promotion System Supporting Initiatives / External Evaluations
SHR and SHAM have expressed their commitment to promote ESG initiatives through the signing or supporting of each initiative. In addition, we will analyze the strengths and weaknesses of SHR and SHAM through the acquisition of sustainability assessments from external organizations, which will lead to further strengthening of our initiatives.
Signing of the PRI (Principles for Responsible Investment)
Since SHR and SHAM have conducted real estate investment management taking ESG into consideration to realize a sustainable society and believe that such management policies share objectives with the PRI (Principles for Responsible Investment) advocating incorporation of ESG issues into investment analysis and decision-making processes, SHAM decided to support the basic approaches of the PRI and became a signatory in March 2019.
The Six Principles
- We will incorporate ESG issues into investment analysis and decision-making processes.
- We will be active owners and incorporate ESG issues into our ownership policies and practices.
- We will seek appropriate disclosure on ESG issues by the entities in which we invest.
- We will promote acceptance and implementation of the Principles within the investment industry.
- We will work together to enhance our effectiveness in implementing the Principles.
- We will each report on our activities and progress towards implementing the Principles.
Assessment result in 2023
In 2023, SHAM acquired "5 stars“ in two categories , the highest rating, on PRI's annual assessment.
| Policy Governance and Strategy | ★★★★★ |
|---|---|
| Real Estate | ★★★★★ |
| Confidence building measures | ★★★★☆ |
- An assessment result is given on a 5-star scale from 1 to 5 stars per module.
Click here for ASSESSMENT REPORT.
Click here PRIVATE TRANSPARENCY REPORT.
Overview of the PRI
The PRI is a set of six principles listed above, established for the financial industry in 2006 under the leadership of the former United Nations Secretary-General, Kofi Annan, together with an international network of investors working to realize said principles.
Signatories to the PRI pursue improvement of investment performance from the long-term perspective for their beneficiaries to further fulfill their fiduciary responsibilities by incorporating ESG issues into investment analysis and decision-making processes.
For details of the PRI, please click here.
Endorsement of Advance
SHAM is committed to ensuring that all directors and employees fulfill their responsibilities to respect human rights in accordance with the “Sekisui House Group Human Rights Policy” formulated by Sekisui House. Believing that the objectives of Advance, an initiative that calls for action on human rights and social issues, are in line with the “Sekisui House Group Human Rights Policy”, SHAM has signed on as an endorser (Note) in March 2023.
(Note)Endorsers are PRI signatory institutions that publicly endorse Advance by signing the Advance investor statement.
Overview of Advance
Advance is a stewardship initiative where institutional investors work together to take action on human rights and social issues. Investors use their collective influence with companies and other decision makers to drive positive outcomes for workers, communities and the society.
For details on Advance, please click here.
Supporting the Recommendations of the TCFD
(Task Force on Climate-related Financial Disclosures)
SHR and SHAM recognize that efforts to tackle environmental issues, such as climate change, are one of the key issues in real estate investment management that take into account ESG, and SHAM, in July 2020, has declared support for the Recommendations of TCFD, and joined the Japan TCFD Consortium, a body of TCFD supporters in Japan. Based on the TCFD's recommendations, SHAM analyzes the risks and opportunities posed by climate change and promotes actions that are consistent with the TCFD framework.
Recommendations of the Task Force on Climate-related Financial Disclosures
Overview of TCFD
TCFD refers to the Task Force on Climate-related Financial Disclosures, which was established by the Financial Stability Board at the request of the G20 to consider how to disclose climate-related information and respond to financial institutions. TCFD published its final report in June 2017 to encourage companies to disclose climate-related risks and opportunities.
For details of the TCFD, please click here.
Acquisition of Science Based Targets initiative (SBTi) Validation
SHR has obtained SBTi validation for the GHG emissions reduction target by FY 2030 as being a science-based target from SBTi which is an international joint initiative.
Overview of the SBTi Validation
SBT is a Science-based target for reducing GHG emissions that is certified by the SBTi, an international joint initiative established in 2015 by CDP, the United Nations Global Compact, the World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). SBT is necessary to align GHG emission reduction targets with the levels required by the Paris Agreement (reduce the increase of global average temperature to 2 ℃ or less and make an effort to keep it to 1.5℃ compared to before the Industrial Revolution).
For details of the SBTi, please click here.
Expressed Support for the UN Global Compact
Sekisui House Group, to which SHAM belongs, has clearly stated its commitment to respect human rights in the Sekisui House Group Corporate Code of Conduct and Corporate Ethics Guidelines, which are the foundations of its corporate activities. Further, Sekisui House Group has expressed support for the 10 principles of the UN Global Compact.
Participation in GRESB Assessment
GRESB Assessment of SHR
In the 2023 GRESB Real Estate Assessment, SHR has received "3 Stars" in "GRESB Rating", which is based on GRESB Overall Score and its quintile position relative to global participants. SHR also has received "Green Star" designation for the seventh consecutive year by achieving high performance both in "Management Component" that evaluates policies and organizational structure for ESG promotion, and "Performance Component" that assesses environmental performance and tenant engagement of owned properties.
Moreover, in the GRESB Public Disclosure (five-level rating from "A" to "E"), which assess the width of ESG information disclosure, SHR has received the highest "A" rating for the fourth consecutive year in recognition of our ESG information disclosure efforts.
Overview of GRESB
GRESB is an annual benchmark to evaluate environmental, social and governance considerations in the global real estate sector, which was established in 2009 primarily by major European pension fund groups which led the PRI (Principles for Responsible Investment). The characteristic of the GRESB Assessment is that it evaluates sustainability efforts by real estate companies, REITs and funds, not of individual properties.
For details of GRESB Assessment, please click here.
Participation in CDP Climate Change Assessment
CDP Assessment of SHR
SHR participated in CDP Climate Change Program and received a score of “A-, the second highest evaluation. CDP scores are assigned at eight levels: Leadership (A/A- score), Management(B/B- score), Awareness (C/C score) and Disclosure (D/D- score).
Overview of the CDP
CDP is an international environmental NGO founded in the UK in 2000, which operates a global disclosure system for managing environmental impacts. The questionnaire is fully compliant with IFRS S2 standards, and CDP's scores are widely used by domestic and international investors, companies and policy makers in investment and procurement decisions as the global standard for environmental reporting and the largest data set in the world.
For details of the CDP, please click here.
MSCI ESG Rating /Inclusion in the MSCI Japan ESG Select Leaders Index
MSCI ESG Ratings investigate, analyze, and rate the extent to which companies are appropriately managing the risks and opportunities related to ESG and provides a comprehensive corporate ESG rating of seven levels, ranging from “AAA“ to “CCC”. SHR acquired "AA" in the rating. In addition, SHR has been included in the "MSCI Japan ESG Select Leaders Index" in 2022. The Index is composed of select companies with high ESG performance from among the companies in the MSCI Japan IMI Index.
USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES ON THIS PAGE DOES NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT OR PROMOTION OF "SHR" BY MSCI OR ANY OF ITS AFFILIATES.
THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.
Selection as a Constituent of the “Dow Jones Sustainability Asia/Pacific Index”
“Dow Jones Sustainability Indices” is an ESG investment index which was jointly created by S&P Dow Jones Indices based in the US and RobecoSAM based in Switzerland. Constituent companies with excellent sustainability performance are selected based on “Governance & Economic, Environmental and Social” criteria. In 2023, SHR has been selected as a constituent of “Dow Jones Sustainability Asia/Pacific Index”, which covers major companies in the Asia-Pacific region.
Selection as a “Sustainability Yearbook Member”
The Sustainability Yearbook is issued annually by S&P Global Inc. to evaluate the major companies around the world based on the “Governance & Economic, Environmental, and Social” perspectives, and award the companies with excellent sustainability performance. The top 15% of companies with excellent sustainability performance in each industry are selected as “Sustainability Yearbook Member” and are published in “The Sustainability Yearbook”. For the first time, SHR has been selected as a “Sustainability Yearbook Member” in “The Sustainability Yearbook 2024”.
Selection as a Constituent of the “FTSE4Good Index Series”
FTSE4Good Index Series is an index series provided by FTSE Russell, a global index provider designed to measure the performance of companies that demonstrate strong ESG practices, the constituents are regularly reviewed based on highly transparent management methods and clearly defined ESG criteria.
SHR was selected as a constituent of the Index Series in recognition of SHR’s ESG efforts upon the 2022 review.
For details of FTSE4Good Index Series, please click here.
Sustainalytics ESG Risk Ratings
Sustainalytics ESG Risk Ratings is an ESG Risk Rating provided by Morningstar Sustainalytics to institutional investors to measure a company’s exposure to industry-specific material ESG risks and how well a company is managing those risks. In 2024, SHR was assessed to be at Negligible Risk.
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