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 eight 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 and Target（KPI）				Related SDGs
Environment	Promoting Response to Climate Change
	Target (KPI)	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
		Achieve 70% or more of the portfolio with green lease agreement by 2030	Page linked
	Conservation of Natural Capital, Coexistence of Humankind and Nature, and Activities for the Resources Environment
	Target (KPI)	Promote greening and manage planting meant to respect biodiversity Obtaining certifications related to biodiversity	Page linked
		No increasing waste emission intensity compared to 2018	Page linked
		Reduce 5% water use intensity by 2030 compared to 2018
	Investing in Real Estate with Excellent Environmental Performance
	Target (KPI)	Maintain 70% or more of the portfolio with green certification	Page linked
		Acquire and keep owning 10 ZEH properties or more by 2030	Page linked
		Achieve 50% or more of sustainability finance in interest-bearing debt by 2030	Page linked
Social	Providing Residents and Tenants with Secure and Comfortable Space that Offers Peace of Mind
	Target (KPI)	Periodic surveys on resident and tenant satisfaction and promote initiatives to improve satisfaction	Page linked
		Promote the ownership of properties that excel in comfort and healthiness, and acquisition of Wellness certifications	Page linked
		Monitor periodically earthquake and flood damage risks (twice/ year), and promote initiatives to reduce the identified risks	Page linked
		Monitor periodically ESG initiatives of the supply chain including property management company and promote collaborative initiatives	Page linked
	Contributing to Society
	Target (KPI)	As a member of society, contributing to greater vitality in the community and countermeasures aimed at preventing damage from natural and other disasters	Page linked
	Creating a Rewarding Workplace
	Target (KPI)	Percentage of female managers: 10% or more by 2030 Percentage of female employee: 35% or more Average monthly work hours per person: 162 hours or less Take-up rate for male childcare leave: 100% Annual paid leave take-up rate: 70% or more	Page linked
		Number of annual external training courses attended per person: 3 times or more	Page linked
		Annual internal training participation rate: 100%
		Practicing Sekisui House Group Human Rights Policy	Page linked
Governance	Strengthening Corporate Governance System
	Target (KPI)	Enhance effectiveness of board of directors of SHR and SHA	Page linked
		Secure the independence of the Board of Directors of SHR Percentage of non-interested parties at the Board of Directors of SHR: 75% or more	Page linked
		Penetration of compliance Conducting compliance training by external experts, etc.（four times/year）participation rate: 100％	Page linked
		Strengthening internal controls structure Conducting internal audit（twice/year）	Page linked
		Strengthen risk management system Conducting risk management meeting（twice/year）	Page linked
	Information Disclosure and Engagement with Stakeholders
	Target (KPI)	Timely and appropriate disclosure of information and enhanced utility of disclosures	Page linked
		Building relationships of trust with stakeholders