Sustainability Policy and Promotion System

Message on the Complete Renewal of the Sustainability Report

The purpose of this Sustainability Report is to help all the stakeholders, including unitholders, gain a deeper understanding of how Hankyu Hanshin REIT, Inc. (hereafter "HHR"), together with Hankyu Hanshin REIT Asset Management, Inc. (hereafter "HHRAM"), which manages HHR's assets, has implemented various ESG (Environment, Social and Governance) initiatives to realize a sustainable society, as well as of the core values that underlie our efforts. We have published our Sustainability Report annually since the first release in March 2020. This year, we fully renewed the report to meet the expectations of our stakeholders. In doing so, we have endeavored to clearly convey our commitment to sustainable business management of the HHR group, while focusing on enhancing the report's visual clarity, as well as the comprehensiveness and transparency of ESG data disclosure. We are proud to have made the report clearer and more readable, thereby making it easier to understand our efforts in the Value Creation Process. We hope that you will take the time to read this information-rich report in its new format.

Accelerating Climate Action and Setting New Goals

In recent years, the extreme severity of natural disasters believed to be caused by global warming, including intense summer heat, torrential rains, and increasingly powerful typhoons, has intensified around the world. Along with this trend, awareness of climate change and requests for concrete measures to be taken by private corporations have been growing day by day among our stakeholders, including our unitholders. In response to these urgent social challenges and demands, HHR has accordingly been accelerating its efforts to realize a decarbonized society.

While setting a long-term target of achieving carbon neutrality (net zero) by fiscal 2050, we have taken various measures under a mid-term target to reduce greenhouse gas emissions by 35% by fiscal 2030, compared with fiscal 2018 levels. To achieve this interim target, we have been vigorously promoting facility upgrades, including the sequential replacement of existing lighting with LEDs selected with a focus on environmental performance and the introduction of highly energy-efficient air-conditioning systems. Regarding efforts to improve the energy efficiency of each facility, we continuously conduct awareness campaigns to encourage all tenants of our buildings, as well as HHRAM employees, to conserve water and energy in their daily activities.

In addition, we have been steadily reducing emissions by effectively introducing renewable energy, such as through the use of green power and non-fossil certificates in partnership with third-party organizations. In fact, these efforts have enabled us to expect that we will achieve the target of a 35% reduction of emissions (compared with fiscal 2018 levels) earlier than anticipated.

We believe this achievement has been driven by the improved sustainability awareness of all those involved and the active introduction of advanced technologies. Building on this progress, in March 2025, we decided to go further by setting a new greenhouse gas emissions reduction target of 60% (compared with fiscal 2018 levels) for fiscal 2030, representing a substantial increase. We will continue to accelerate diverse initiatives to realize carbon neutrality by pursuing this higher target.

Enhancing External Certifications and Improving Transparency

We recognize that the current trend in sustainability management strongly requires us not only to implement substantial initiatives, but also to obtain external certifications and improve their evaluation results in order to ensure transparency. Accordingly, we have been proactively introducing evaluation by third-party organizations. Two of our properties newly acquired A-Rank certifications under CASBEE (Comprehensive Assessment System for Built Environment Efficiency) for Real Estate: METS OZONE in November 2024, and kotocross Hankyu Kawaramachi in August 2025. Both buildings were highly evaluated for their excellent environmental performance. We will continue to pursue additional environmental certifications for properties across our portfolio. In addition, we plan to participate in CDP, an international framework for climate-change-related data disclosure, in fiscal 2026 or thereafter. This effort will enable us to further improve data transparency and enhance our global evaluation.

New Initiative: Introducing Employee Investment Unit Ownership Program

As a new initiative, HHRAM introduced an employee investment unit ownership program in July 2025. The program is part of our employee welfare program, but at the same time we consider that it also carries significant strategic importance. This system enables the sharing of more common interests between our unitholders and HHRAM employees, while encouraging each employee to adopt a unitholder's perspective in their work, thereby enhancing motivation and fostering greater professionalism. As a result, we believe that this initiative will contribute to improving unitholder value over the medium-to-long-term.

Making a Commitment to a Sustainable Future

Looking ahead, expectations for sustainability will become more varied, and initiatives from diverse perspectives will increasingly be required. The field of sustainability is expanding to include areas such as the promotion of human rights due diligence, growing attention to biodiversity, and responses to ESG issues faced by supply chains. We will actively meet these societal requests and vigorously address various ESG challenges from a medium-to-long-term perspective to realize a sustainable society. In addition, we will strive to continuously enhance corporate value and, furthermore, maximize unitholder value by building relationships of mutual trust with all our stakeholders, including unitholders, tenants, local communities, and employees.

Sustainability Policy

Hankyu Hanshin REIT, Inc. (hereafter "HHR") and Hankyu Hanshin REIT Asset Management, Inc. (hereafter "HHRAM") recognize that it is essential for their medium-to-long-term competitiveness and the continued growth of the investor value of HHR to act with consideration of environmental, social and governance (hereafter "ESG") issues, and aim to practice them through real estate investment management by establishing the "Sustainability Policy" that conforms to the management philosophy and the concept of social contribution and environmental conservation of the Hankyu Hanshin Holdings Group.

1. Realization of "a city in which we want to live now and in the future" that can contribute to the sustainable development

We aim to contribute to the sustainable development of society and towns through business activities that take environmental and social issues into consideration through dialogue and collaboration with tenants and local communities.

2. Conservation of the global environment

We aim to conserve the global environment such as a shift to a decarbonized society by initiatives for energy conservation and renewable energy, and realization of a recycling-based society by initiatives for water saving, waste reduction and such through our real estate investment management business.

3. Environmental and social considerations in collaboration with stakeholders

We seek the cooperation of suppliers involved in the management and renovation of real estate, and collaborate and strengthen engagement with tenants to reduce the environmental burden of our properties and promote social considerations.

4. Respect and development of human resources

Each and every executive and employee involved in our business is our irreplaceable asset. We strive to create a healthy working environment that can maximize the diversity of personality and ability of our employees, and aim to improve our business competitiveness through proactive talent development.

5. Enlightenment on ESG

Our executives and employees deepen their understanding and ability to practice ESG consideration through our continuous implementation of education and enlightenment activities.

6. Compliance with integrity

We promote compliance not only to observe the minimum required legal compliance but also to maintain our integrity with the aim to meet the expectations of all our stakeholders such as investors, tenants, local communities, suppliers, executives and employees.

7. Ensure ESG information disclosure and transparency

We strive to disclose information on ESG to our stakeholders in a timely and appropriate manner, and to ensure transparency through acquiring external evaluations such as environmental certifications.

Conceptual Diagram of the Environmental Management System (EMS) based on the PDCA cycle

HHR and HHRAM have established and operate an EMS (Environmental Management System) based on the PDCA cycle, aiming to achieve sustainability goals and continuously improve environmental performance. Through the EMS, we strive to further reduce environmental impact and achieve environmental targets.

Sustainability Promotion System and the Role of Management

Role of Executive Meeting

Receive reports on sustainability from the Sustainability Promotion Committee as appropriate, and oversee and monitor them.

Role of President and Representative Director

As the Committee Head, establishes the framework for promoting sustainability and oversee the planning and execution of various initiatives, including policies, goals, climate change response, and DEI initiatives.

Sustainability Promotion Committee

• Has been set up the Committee by HHRAM.
• Consider and draft various policies, targets concerning sustainability.
• Consider and draft various measures, response to climate change, and DEI*.
• Reports appropriate information to the Executive Meeting of HHR.

• *DEI stands for diversity, equity and inclusion.

Composition of Sustainability Promotion Committee

Committee Head：President and Representative Director
Committee's Operating Officer：Director in charge of sustainability
Member：Full-time Directors, Department or Office General Managers
Frequency of holding：At least every three months

Number of times held

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Frequency of reporting on sustainability matters

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Main agenda items

Report / Approval

• Development and revision of regulations, manuals, and various policies related to sustainability
• Management of sustainability promotion status using environmental activity plans
• Progress review of KPIs for Materiality (material issues)
• GRESB Real Estate Assessment progress and results
• Consideration of new acquisition and renewal of environmental sustainability certifications
• Green finance verification
• Implementation of the annual review (PDCA Cycle) based on the EMS operational manual
• Consideration of other new initiatives

Numerical Report

• Progress report on actual energy consumption (intensity) and environmental targets
• Energy consumption
• Clean water consumption
• Greenhouse gas emissions

Materiality (material issues) Identification Process

HHR and HHRAM will contribute to the achievement of the SDGs (Sustainable Development Goals)　and the achievement of medium-to-long-term growth of HHR through initiatives for the following　Materiality (material issues) and key performance indicators (KPIs).

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Stakeholder Engagement

We aim to achieve sustainable growth and create social value through building relationships with diverse stakeholders. We introduce our specific initiatives and their achievements for each stakeholder.

Value Creation Process