Sustainability Policy / Sustainability Promotion System Message from Senior Management

Message from Senior Management

Introduction

We would like to take this opportunity to thank you for your exceptional support of Sekisui House Reit, Inc.

In recent years, all aspects in the business environment surrounding the company have undergone dramatic changes. In such an environment where uncertainty is increasing, in order for SHR to aim for stable, medium to long term growth, it is essential that we engage in efforts to realize a sustainable society that will be the foundation for this growth.

What SHR is Aiming for

SHR has set a vision of “managing assets to better provide for people, society and the future”. This is a declaration of our determination to continue contributing to the creation of a more prosperous “future” by seeking to enhance the value of our assets under management together with our sponsor Sekisui House, and by providing social capital for a new era for the “people” and the “society”. We believe that addressing social issues through asset management that takes ESG (Environmental, Social and Governance) into consideration will contribute to the realization of a sustainable society and enhance the trust of stakeholders, thereby contributing to securing stable earnings over the medium to long term and maximizing unitholder value.

Recent Initiatives

Based on this idea, SHR has identified materiality (important issues) in 2020, set KPIs (targets), and is actively pursuing initiatives to resolve the issues. In 2023, we have changed our existing environmental targets and set new targets, aiming to reduce GHG emissions (Scope 1 and Scope 2) by 42% by fiscal year 2030, in comparison with fiscal year 2021. The targets have been certified by SBTi ^{(Note 1)}, which certifies GHG emission reduction targets based on scientific evidence.
In addition to introducing Sekisui House Owner Denki ^{(Note 2)} - electric power derived from renewable energy - to our assets, SHR acquires the CASBEE Wellness Office evaluation certification ^{(Note 3)}, which evaluates the specifications, performance, and efforts of buildings, for the first time. These and other ESG initiatives have been highly appraised by external parties. SHR acquired “AA” rating by MSCI ESG Ratings, and been included in both the MSCI Japan ESG Select Leaders Index and the FTSE4Good Index Series ^{(Note 4)}. Going forward, we will continue to review our materiality (important issues) and targets (KPIs) in response to changes in the environment, society, economy, and other factors, and focus on improving the sustainability of both society and SHR.

Toward the Realization of a Sustainable Society

SHR will continue to strive to maximize unitholder value through the provision of high-quality real estate, that will become the social capital of a new era. As a REIT that leads the way in the era of the 100-year lifespan, we aim to continuously meet the expectations of our stakeholders and contribute to the creation of a prosperous future, while aiming to be a widely loved REIT for a long time to come.

We would like to ask the continued support and encouragement of our stakeholders in the years ahead.

• SBTi is an international joint initiative established in 2015 by CDP, the United Nations Global Compact, WRI (the World Resources Institute) and WWF (the World Wide Fund for Nature).
• "Sekisui House Owner Denki" is a service in which the power supply company purchases surplus electricity from solar power generation from owners of houses built by Sekisui House. This surplus electricity is purchased even after the expiration of the feed-in tariff (FIT) system and used by Sekisui House and others.
• Certification for CASBEE Wellness Office is a tool to evaluate the specifications, performance, and efforts of buildings that support the maintenance and promotion of the health and comfort for building users.
• The FTSE4Good Index Series is developed by FTSE Russell to promote investment in companies that meet global ESG standards.