Environmental Initiatives

Energy Management

At the Sustainability Promotion Committee meeting held in March 2025, we established the following environmental target regarding energy consumption and are promoting initiatives to achieve them.

Established the Energy Conservation Policy

Based on the "Energy Conservation Policy" established in March 2019, HHR and HHRAM will continually seek to understand the energy consumption levels of the portfolio and measure the rate of achievement against the targeted values. Considerations for operational improvements and equipment investments will be made for energy inefficient properties, and we will continually aim to reduce energy consumption across the entire portfolio.

Initiatives through equipment renovation

For measures that require equipment investments such as switching to LED lighting and switching to high efficiency air conditioning, measures that are the most cost-effective will be prioritized based on consideration of the lifecycle costs, etc.

Initiatives through operational improvment

HHR promotes initiatives in collaboration with the property management companies and tenants, including:
- Inspecting for forgotten electrical and gas appliances left on after closing
- Saving energy during periods of absence or non-use (hallways, warehouses, conference rooms, etc.)
- Setting appropriate temperatures for common area air conditioning
- Setting appropriate temperatures for warm water in toilet sink and toilet seat heaters during summer
- Implementing appropriate lighting reduction measures in back areas.

Countermeasures against urban heat islands

Promoting green walls and planting vegetation in urban areas

At GRAND FRONT OSAKA, there is the 500-meter-long "Icho Namiki" (row of ginkgo trees) that encircles the building, and the "Keyaki Namiki" (row of zelkova trees) that runs east-west between the South Building and the North Building. The 4,000 m2 garden on the north side of the North Building is a space where people can experience the changes in the four seasons, and people enjoy walks in the garden throughout the year. Moreover, on the roof of the 9th floor of the South Building and the North Building, there is a rooftop garden totaling more than 10,000 m2. This space creates a place where office workers can exchange ideas.
In addition, the Sky Garden on the rooftop of HANKYU NISHINOMIYA GARDENS is a space of relaxation for those who visit. This is because vegetation indigenous to the Rokko mountain range is planted in the garden such as trees, cherry trees, and fruit trees, based on the facility concept of "harmony with the natural environment".

Collaboration with tenants

Promotion of green lease agreements

Green lease agreements are agreements in the form of a contract or memorandum, etc. voluntarily entered into by building owners and tenants and concern reduction of environmental load through energy conservation at real estate and improvement of working environment, as well as implementation of their content. HHR will strive to increase the number of agreements that have green leases in their clauses.

Case of concluded green lease agreement

As of the end of October 2025, agreements with a green lease clause have been concluded with tenants, who have a strong interest in sustainability among fifteen properties owned by HHR. The provisions of the agreements for the main properties include the following:

1. Suppression of amount of energy and water used in area leased by the tenant, suppression of waste generated and promotion of waste-sorting on a daily basis, and establishment of system for voluntary management of such;
2. Suppression of amount of energy and water used in construction work in area leased by the tenant and when procuring goods, suppression of waste generated and introduction of environmentally friendly materials;
3. Cooperation toward sustainability promotion measures (obtaining certifications, exchanging information on amounts of energy usage, water usage and waste generated, and keeping and improving comfort in building).

Water Resource Initiatives

At the Sustainability Promotion Committee meeting held in March 2025, we established the following environmental target regarding water resource and are promoting initiatives to achieve them.

Established the Water Conservation Policy

Based on the "Water Conservation Policy" established in March 2019, HHR and HHRAM continually seek to understand the water consumption levels of the portfolio and measure the rate of achievement against the targeted values. Considerations for operational improvements and equipment investments will be made for water resource inefficient properties, and we will continually aim to reduce water consumption across the entire portfolio.

Initiatives through equipment renovation

For measures that require equipment investments such as switching to water conservation equipment and installing water-saving devices, measures that are the most cost-effective will be prioritized based upon consideration of the lifecycle costs, etc.

Initiatives through operational improvement

We are working together with property management companies and tenants to conserve water during routine cleaning, check for leaks in washrooms and restrooms during patrols, and make every effort to conserve water.

Reusing rainwater

At HANKYU NISHINOMIYA GARDENS, GRAND FRONT OSAKA, and METS OZONE, rainwater is stored and reused as sprinkling water for plants and for flushing toilets.

Installation of kitchen wastewater pretreatment equipment

By installing kitchen wastewater pretreatment equipment at HANKYU NISHINOMIYA GARDENS, the pollutants found in kitchen wastewater produced by cafés and restaurants are reduced by processing it with mixed-microbial communities, before draining it into public sewage systems. As a result, HANKYU NISHINOMIYA GARDENS is able to maintain water quality that falls well within the wastewater standards for sewage systems of Nishinomiya City.

Circular Economy Initiatives

Waste management

HHR and HHRAM regularly seek to understand the figures submitted by the waste disposal operators of the portfolio.

Charging by waste amount

At HANKYU NISHINOMIYA GARDENS and GRAND FRONT OSAKA, the waste disposed by each tenant is measured on an exclusive measurement device, and a fee is assessed based on the quantity of waste produced. This system has contributed to the reduction of waste generated by tenants.

Thorough waste sorting and recycling

At Dew Hankyu Yamada and HEP Five, etc., recycling is conducted thoroughly by sorting cardboard, paper, cans, glass bottles, and plastic bottles.

Using recycled trash bags

At HANKYU NISHINOMIYA GARDENS, recycled trash bags, which are made partly from plastic cups collected at Hanshin Koshien Stadium, are used to collect garbage brought from common use areas. This activity contributes to HHR’s recycling-oriented efforts.

External Certifications

Acquisition of “3 Stars” and "Green Star" Rating in GRESB Real Estate Assessment

GRESB is an annual benchmarking assessment to measure ESG (Environmental, Social and Governance) integration of real estate companies and funds. In the 2025 GRESB Real Estate Assessment, HHR received a “3 Stars” in GRESB Rating, which is based on GRESB Overall Score and its quintile position relative to global participants. It also won a “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 properties owned. HHR also received the highest “A Level” for the sixth consecutive year for the GRESB Public Disclosure, which assesses the width of ESG disclosure.

Ratio of environmentally certified properties

The environmental certification acquisition rate (based on total floor area) across the entire portfolio is 58.8%.
※As of November 30, 2025

Acquisition of DBJ Green Building Certification

DBJ Green Building Certification is a program which Development Bank of Japan grants certifications after assessing properties in five ranks, from the perspective of environmental and social considerations. In the future, HHR will continue to work to expand the number of certified properties.

Acquisition of Certification for CASBEE for Real Estate

Certification for CASBEE for Real Estate is an evaluation system that evaluates and ranks buildings and structures in terms of their environmental performance by using CASBEE (Comprehensive Assessment System for Built Environment Efficiency). CASBEE is designed to comprehensively assess the quality of a building, including not only consideration of environmental practices that include using materials and equipment that save energy or achieve smaller environmental loads, but also consideration of interior comfort and scenic aesthetics.

Green Finance

HHR has established Green Finance Framework (hereafter the “Green Finance Framework”) that complies with the Green Bond Principles 2021, the Green Loan Principles 2023, the Green Bond Guidelines 2022, and the Green Loan Guidelines 2022 for the implementation of green finance.

Overview of Green Finance

Management of Procured Funds

The maximum amount of green finance is set at an amount arrived at by multiplying the sum of total acquisition price of Eligible Green Assets owned by HHR and amount of expenditure for renovation work that meet the eligibility criteria by the ratio of interest-bearing debt to total assets (hereafter the “Eligible Green Debt Amount”). HHR will manage

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• (Note)The figure is as of November 30, 2025.

Assessment by External Institution

HHR has acquired Green1 (F), the highest ranking in the JCR Green Finance Framework Evaluation by Japan Credit Rating Agency, Ltd. (JCR) concerning the eligibility of the Green Finance Framework. For the content and other details of the JCR Green Finance Framework Evaluation, please refer to the following website.

●JCR Green Finance Framework Evaluation：https://www.jcr.co.jp/en/greenfinance/

Green Finance Framework

Use of Proceeds

Green The proceeds of green finance are allocated to the acquisition of Eligible Green Assets (Note) or implementation of renovation work or the refinancing or reimbursement of borrowings (including green loans) or investment corporation bonds (including green bonds) which have been allocated to such.

• (Note) Assets that meet the following eligibility criteria

Eligibility Criteria

Apply any of the following criteria.

(1) Eligible Green Assets

Assets that have obtained or renewed any of the following certifications by third-party certification bodies (hereafter “Green Building Certification”) within the past 36 months from the payment date of green bonds or the execution date of green loans, or the reporting date based on this framework, or that are scheduled to obtain or renew such certification in the future.

• DBJ Green Building Certification: 3 Stars, 4 Stars or 5 Stars
• CASBEE Certification:
  • CASBEE Certification for Buildings (New Construction)• Certification for CASBEE for Real Estate: B+ Rank, A Rank or S Rank
  • CASBEE by Local Government: B+ Rank, A Rank or S Rank (Note 1)
• BELS Certification (FY2016 standard): 3 Stars, 4 Stars or 5 Stars (Note 2)
  BELS Certification (FY2024 standard):
  • Non-residential properties: Level 4, 5 or 6 (Note 3)
  • Residences with renewable energy facilities: Level 3, 4, 5, or 6 (Note 4)
  • Residences without renewable energy facilities: Level 3 or 4 (Note 4)
• LEED Certification: Silver, Gold or Platinum (v4 or later for LEED BD+C)

• (Note 1) Within 3 years from the construction completion date
• (Note 2) Excluding factories, etc., including logistics facilities which exceed BEI=0.75.
• (Note 3) New acquisitions of existing buildings built before 2016 must be at least Level 3, excluding factories, etc., including logistics facilities that exceed BEI=0.75.
• (Note 4) New acquisitions of existing buildings built before 2016 shall qualify at Level 2 or higher, regardless of the use of renewable energy.

(2) Renovation Work

The criteria apply to renovation work aiming to meet any of the following standards which were completed within the past 36 months from the payment date of green bonds or the execution date of green loans, or will be completed in the future.

• Improvement of 1 step or higher in the number of Star or the Rank of any of the above-mentioned green building certifications.
• Reduction of 30% or more in any of carbon dioxide emissions, energy consumption or water consumption.
• Any other renovation work pursuing effective improvement in terms of the environment (in which a reduction of 30% or more in the volume of consumption or emissions is expected compared with conventional methods).
• Introduction or acquisition of renewable energy-related facilities.

Status of Finance Impact Reporting

Balance of green bonds issued

As of December 29, 2025

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Borrowing of Green Loans

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Impact Reporting

HHR will continue to disclose the following indicators once a year as long as it has a sustainability bond finance balance.

Property names of Eligible Green Assets and Status of acquisition of environmental certifications

As of 31 October, 2025

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Quantitative indicators of Eligible Green Assets

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• ※As of October 1, 2025. The figures may be adjusted retroactively due to additional acquisition of past data, and revision of data collection range.
• ※Each figure is disclosed to the extent possible, showing the total of all figures from target properties owned in each fiscal year.
• ※Energy consumption and greenhouse gas emissions are derived by multiplying coefficients or other values based upon the Mandatory GHG Accounting and Reporting System established by the Ministry of the Environment.