Sustainability Policy / Sustainability Promotion System Materiality (Important Issues)

Materiality

SHR believes that sustainable growth in our business activities is built on a solid foundation of a sustainable society, and recognizes that in order to continue providing "Prime Properties", which SHR focuses on as an investment strategy, it is necessary to carry out initiatives based on the guidelines of solving issues to build a sustainable society through business activities. Based on this recognition, SHR has identified nine materialities (important issues) and set targets (KPIs) as indicators to resolve each of them. In light of the SDGs adopted by the United Nations in 2015, we will pursue mutual sustainability of both society and SHR by promoting efforts to resolve these material issues.

Materiality of SHR

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Materiality		Reasons for Selecting Materiality Issues	Targets (KPIs)	Related Pages	Related SDGs
Environment	Promoting Response to Climate Change	GHG emissions from the properties in which SHR invests have a significant impact on the environment To continuously promote initiatives aimed at achieving net-zero GHG emissions by 2050	Reduce absolute emissions compared to 2023 Medium term target: Reduce 42% of Scope 1 and Scope 2 emissions by 2030 Reduce 25% of Scope 3 emissions by 2030 Long term target: Achieve net zero by 2050 Reduce 90% or more of Scope 1, Scope 2, and Scope 3 and neutralize residual emissions	Page linked
			Reduce 10% energy consumption intensity by 2028 compared to 2018
	Conservation of Natural Capital, Coexistence of Humankind and Nature, and Activities for the Resources Environment	To directly reduce business continuity risks over the long term by preventing the loss of biodiversity, which is a cornerstone of society and the economy.	For properties where regular inspections reveal poor management of planting strips (dead, withered, or overgrown plants), develop improvement measures and corrective action plans. 100% implementation rate as of the end of December each year	Page linked
			No increasing waste emission intensity compared to 2018
			Reduce 5% water use intensity by 2030 compared to 2018
	Investing in Real Estate with Excellent Environmental Performance	To enhance the objectivity and reliability of our environmental impact reduction initiatives and to facilitate improvements for further advancement	Maintain 90% or more of the portfolio with green certification	Page linked
			Acquire and keep owning 10 ZEH properties or more by 2030
	Collaboration with stakeholders on environmental considerations	Collaboration with stakeholders is essential for promoting and achieving sustainability initiatives	Achieve 70% or more of the portfolio with green lease agreement by 2030	Page linked
			Achieve 50% or more of sustainability finance in interest-bearing debt by 2030	Page linked
Society	Providing Residents and Tenants with Secure and Comfortable Space that Offers Peace of Mind	To maintain and enhance the competitiveness of our properties and stabilize and improve property management performance by improving tenant satisfaction and ensuring safety and security	Tenant satisfaction surveys :Once every three years	Page linked
			Flood risk surveys : Once a year	Page linked
	Contributing to Society	To secure long-term social trust and investor returns by coexisting with the local community and contributing to value enhancement, in recognition of the public nature of real estate	Conducting cleanup activities Introduction of community-oriented infrastructure Participation in local community events in the areas where the properties are located	Page linked
	Creating a Rewarding Workplace	To foster sustainable organizational growth by improving the workplace environment and investing in our people—viewing the talent that supports our asset management operations as human capital that generates corporate value	Total working hours: Average of 162 hours or less per month	Page linked
			Paid leave utilization rate: 70% or more
			Take-up rate for male childcare leave: 100%
			Engagement survey score: eNPS: 60% or more of respondents are passives and promoters
			Percentage of female managers: 10% or more by 2030
			Training hours per employee: 20 hours or more per year	Page linked
Governance	Strengthening Corporate Governance System	To ensure the propriety of SHA’s operations and the soundness of its management, to accurately identify various risks inherent in its operations, and to ensure transparency in asset management	Percentage of non-interested parties at the Board of Directors of SHR: 75% or more	Page linked
			Compliance training by external experts, etc.: Four times a year Participation rate: 100%
			Internal audits: Twice a year
			Risk management meetings: Twice a year	Page linked
			Safety confirmation: Once a year Phishing email training: Once a year
	Appropriate Disclosure and Engagement with Stakeholders	To ensure timely and appropriate disclosure, improve the usefulness of diclosures, and build strong relationships with stakeholders based on trust	Achieve 4 stars in GRESB Real Estate Maintain core A in CDP Climate Change Strengthening engagement through IR meetings with institutional investors and events for individual investors	Page linked