Sustainability Finance Green Finance
Green Finance
SHR, which conducts asset management with due consideration given to the environment, society, and governance (collectively referred to as “ESG”), aims to contribute to the realization of a sustainable society. While utilizing the know-how on operation and management of real estate possessed by the sponsor, Sekisui House, Ltd., SHR promotes such initiatives as energy saving, environmental consideration, and ensuring living safety and business continuity to enhance the satisfaction of residents and tenants at owned properties.
As part of such initiatives, SHR procures funds through green finance (green bonds and green loans) in order to further promote real estate investment management with considerations given to ESG and strengthen its financial base.
Green Finance Framework
SHR has formulated the Green Finance Framework as follows to implement green finance that conforms to the Green Bond Principles and other various principles and guidelines.
1.Use of funds
The funds procured through green finance are scheduled to be allotted to funds for the acquisition of existing or new assets which satisfy the following eligibility criteria (“Eligible Green Projects”), funds for the refinancing of borrowings required for the acquisition of Eligible Green Projects or funds for the redemption of outstanding investment corporation bonds required for the acquisition of Eligible Green Projects.
2.Eligibility criteria
At the borrowing or payment date of green finance, assets that have acquired or are scheduled to acquire any of the following evaluations in third-party certifications, shall be designated as Eligible Green Projects.
a. DBJ Green Building Certification: 3 Stars, 4 Stars, 5 Stars
b. Certification for CASBEE for Real Estate: B+ Rank, A Rank, S Rank
c. BELS Certification: 3 Stars, 4 Stars, 5 Stars
d. BELS Certification: following assessment of ZEH and ZEB
ⅰ. ZEH-M, Nearly ZEH-M, ZEH-M Ready, ZEH-M Oriented
ⅱ. ZEB, Nearly ZEB, ZEB Ready, ZEB Oriented
3.Evaluation and selection process of Eligible Green Projects
Eligible Green Projects will be evaluated and selected by the Sustainability Committee, which is chaired by the president & representative director of Sekisui House Asset Management, Ltd., and participated by all full-time directors, in accordance with its management policy, the Sustainability Policy and eligibility criteria.
4.Management of procured funds
SHR intends to allot the funds procured through green finance towards Eligible Green Projects. As long as the green finance balance exists, SHR will manage to ensure that the green finance balance does not exceed the Eligible Green Liability (Note).
In addition, SHR will report that the total amount of funds procured through green finance has been fully allocated to Eligible Green Projects and as long as the green finance balance exists, the allocated funds will be tracked and managed internally on a portfolio basis.
In the event that all or part of the funds procured through green finance are not immediately allocated to Eligible Green Projects, SHR will identify unappropriated funds and manage all or part of the funds raised in cash or cash equivalents until the unappropriated funds are allocated to Eligible Green Projects.
(Note)Eligible Green Liability is calculated by multiplying total acquisition price of Eligible Green Projects by LTV (total asset basis) as of the end of the latest fiscal period. The same applies hereinafter.
5.Reporting
a. Reporting related to the status of allocation of funds
SHR will disclose that the funds procured through green finance has been fully allocated to Eligible Green Projects according to the Framework and the green finance balance does not exceed the Eligible Green Liability via SHR’s website. As long as the green finance balance exists, SHR will report the amount of Eligible Green Liability and the green finance balance as of the end of March every year.
b. Impact reporting
As long as the green financing balance exists, SHR will disclose following environment-related indicators, etc., as of the end of March every year via SHR’s website.
ⅰ. The number of Eligible Green Projects and acquired evaluations in third-party certifications
ⅱ. Total floor area of Eligible Green Projects
ⅲ. Eligible Green Liability
ⅳ. The following quantitative indicators for Eligible Green Projects (Note)
(ⅰ) Energy consumption
(ⅱ) CO₂ emissions
(ⅲ) Water consumption
(Note)Only properties for which SHR has the energy management authority.
Third-party evaluation
SHR acquired “Green 1(F)”, the highest rating in “Green Finance Framework Evaluation” from Japan Credit Rating Agency, Ltd. (JCR) as a third-party evaluation of the Framework.
Click here for details of the “Green Finance Framework Evaluation”.
Green Finance Allocation Status
(As of March 31, 2024)
This table can be scrolled sideways.
| Total Amount （Million yen） |
||
|---|---|---|
| Green Finance | 70,290 | |
| Green Bonds (Note 1) | 23,500 | |
| Green Loans (Note 2) | 46,790 | |
(Note 1)SHR formulated the Green Bond Framework in 2018, and the third through ninth Investment Corporation Bonds have been issued in accordance with the Green Bond Framework. In addition, SHR has obtained a third-party opinion from a third-party opinion from Sustainalytics, an ESG rating agency, for the eligibility of its Green Bond Framework.
For details on Green Bonds, please refer to "Investment Corporation Bonds" in the "DATABOOK" posted under "Disclosure Materials" in the IR Library.
Click here for the Green Bond Assertions issued under the Green Bond Framework.
(Note 2)For details on Green Loans, please refer to "Borrowings" in the "DATABOOK" posted under "Disclosure Materials" in the IR Library.