Hankyu Hanshin REIT, Inc.

TSE Code:8977

Sustainability

Environmental Initiatives

Environmental Targets

The following environmental targets toward carbon neutrality and net-zero emissions by 2050 were established at the Sustainability Promotion Committee meeting held in December 2022.

  1. GHG emissions: To be reduced by 35% by fiscal 2030
  2. Energy consumption: To be reduced by 1% annually
  3. Water consumption: To be reduced by 10% by fiscal 2030
  • The intensity, and base year is fiscal 2018.

For the fiscal 2050 target (long-term target), we will accelerate various initiatives for carbon neutrality and net-zero emissions.

Energy Consumption and Intensity

Fiscal
2018
Fiscal
2019
Fiscal
2020
Fiscal
2021
Fiscal
2022
Energy consumption Consumption(MWh) 184,420 192,396 168,614 161,297 162,361
Intensity (kWh/㎡・year) 587 578 503 492 513
Intensity  YoY 98.5% 87.0% 97.9% 104.3%
Intensity compared with base year 98.5% 85.7% 83.9% 87.5%
Water consumption Consumption(㎥) 470,414 491,095 321,767 322,214 397,122
Intensity(㎥/㎡・year) 1.477 1.478 0.959 0.979 1.256
Intensity  YoY 100.1% 64.9% 102.0% 128.3%
Intensity compared with base year 100.1% 64.9% 66.3% 85.0%
Greenhouse gas emissions Emissions(t) 29,479 26,612 22,127 22,210 19,619
Intensity(t/㎡・year) 0.094 0.080 0.066 0.068 0.062
Intensity  YoY 85.4% 82.3% 103.0% 91.3%
Intensity compared with base year 85.4% 70.3% 72.4% 66.1%
  • As of October 1, 2023

  • Data retention rate: 100% (Fiscal 2022; excluding site properties;  figures for properties under co-ownership are derived by multiplying the ownership interest; data difficult to compile due to direct contracts with tenants or other reasons are partially excluded from gas consumption figures)
  • The figures after the conversion into primary energy are used for energy consumption
  • Greenhouse gas emissions include Scope 3 (Category 13: emissions coming from downstream leased assets)

Energy Management

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 improvement

    HHR promotes initiatives in collaboration with property management companies and tenants, such as inspection to ensure that electricity and gas are turned off after store hours, that lights at places such as corridors, warehouses, and meeting rooms, are turned off when nobody is there or the places are not in use, that appropriate temperatures are set for air-conditioners in common areas, that appropriate temperatures are set for hot water for hand-washing as well as toilet seat heaters in the summer season, and that appropriately reducing the number of lights that are on in common use areas (backyard).

Application of leading project to reduce carbon footprint in housing / buildings

A leading project to reduce carbon footprint in housing / buildings is a project that is selected after the government solicits entries of housing / building projects to become leading projects for carbon footprint reduction, and offers support for them from its budget by subsidizing part of the projects’ cost, such as maintenance costs. GRAND FRONT OSAKA was chosen as the leading project in 2009. Its "organizing an integrated water and green network over multiple city blocks", "adoption of highly effective carbon footprint reduction technology" and "building a sustainable management system" initiatives were adopted to realize its environment-friendly design such as extensive greenery on the rooftops and in the surrounding city blocks, natural ventilation system and adoption of a solar power system.

GRAND FRONT OSAKA

Utilization of renewable energies

Introducing electricity completely from renewable energies

All the electricity used at GRAND FRONT OSAKA, not only for common areas but also for exclusive areas for its tenants, is already generated from renewable energy sources, which are free of CO2.

GRAND FRONT OSAKA

Implementation of solar power generator facilities

Solar panels have been installed above the south parking lot of HANKYU NISHINOMIYA GARDENS (along Yamate Kansen), and the power generated is used to illuminate the lights. Solar panels have been also installed on the roof of HEP Five, and the clean natural energy is used to light up the Ferris wheel. A monitor indicating the quantity of energy generated by the sunlight has been set up in the atrium on the first floor. Furthermore, amount of energy generated and consumed are as follows.

Property name Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022
HEP Five 18,054kWh 18,197kWh 18,432kWh 17,473kWh 18,394kWh
  • As of October 1, 2023
Solar panels

Installation of wind turbine generator system

At HANKYU NISHINOMIYA GARDENS,  hybrid-type generators that combines savonius wind turbines with solar panels have been installed, and the power generated  is used to illuminate the rooftop lights.

Savonius wind turbines with solar panels

Switching to LED lighting

From the perspective of energy-saving measures, HHR promotes switching to LED lighting at each portfolio property. HHR has already almost upgraded all the common area lights excluding the lights in the backyard at HEP Five, Dew Hankyu Yamada, and Kitano Hankyu Building, and all the exclusive area lights at Shiodome East Side Building and Ueroku F Building to LED lighting, while sequentially upgrading mainly common area lights in other buildings.

Countermeasures against urban heat islands

As a countermeasure against urban heat islands that occur in the summer, we have installed a fountain and mist spraying system in the roof-top garden of HANKYU NISHINOMIYA GARDENS, water sprinklers on the roofs of cinema complexes, a mist spraying system at the main entrance of HEP Five, and water facilities such as cascades and a mist projection system at the Umekita Plaza of GRAND FRONT OSAKA. These have contributed to cutting CO2 emissions by reducing the load placed on air conditioners.

Fountains
Mist spraying system

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."

Row of ginkgo trees
Rooftop garden

Sky garden

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 May 2023, agreements with a green lease clause have been concluded with tenants, who have a strong interest in sustainability among  twelve properties owned by HHR. The provisions of the agreements for the main properties include the following:

  • 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;
  • 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;
  • 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

Established the Water Conservation Policy

Based on the "Water Conservation Policy" established in March 2019, HHR and HHRAM will 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
    Water conservation is strived for in collaboration with property management companies and tenants through measures such as saving water during cleaning and checking for water leaks in washrooms and toilets during patrol

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 preparing 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.

Waste Management

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 suppression 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 run by Hanshin Electric Railway, are used to collect garbage brought from common use areas. This activity contributes to HHR’s recycling-oriented efforts.

External Certifications

Acquisition of “2 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 2023 GRESB Real Estate Assessment, HHR received a “2 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 fifth 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 fourth consecutive year for the GRESB Public Disclosure, which assess the width of ESG disclosure.

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.

Properties with the best class environmental & social awareness

HANKYU NISHINOMIYA GARDENS
HANKYU NISHINOMIYA GARDENS

Properties with exceptionally high environmental & social awareness

HEP Five
HEP Five

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.

CASBEE 2022

A Rank(Very good)

Ratio of properties that have received environmental certifications

The percentage of properties that received green building certifications the entire portfolio is 60.0% (based on total floor area).

  • As of November 30, 2023

Green Finance

HHR has established Green Finance Framework (hereafter the “Green Finance Framework”) that complies with the Green Bond Principles 2018, the Green Bond Guidelines 2020, the Green Loan Principles, and the Green Loan and Sustainability Linked Loan Guidelines 2020 for the implementation of green finance.

Green Finance Framework

Use of Proceeds

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.

  • Assets that meet the following eligibility criteria

Eligibility Criteria

  1. Eligible Green Assets

The criteria apply to assets for which any of the following green building certifications was obtained or renewed within 36 months prior to the payment date of green bonds or the execution date of green loans or the reporting date based on the Green Finance Framework, or will be obtained or renewed in the future.

  • DBJ Green Building Certification: 3 Stars, 4 Stars or 5 Star
  • Certification for CASBEE for Real Estate: B+, A or S Rank
  • BELS Certification: 3 Stars, 4 Stars or 5 Stars
  • LEED Certification: Silver, Gold or Platinum
  1. Renovation Work

The criteria apply to renovation work aiming to meet any of the following standards which were completed within 36 months prior to 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 10% 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 10% or more in the volume of consumption or emissions is expected compared with conventional methods).
  • Introduction or acquisition of renewable energy-related facilities.

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 conduct manage so that the balance of the proceeds of green finance will not exceed the Eligible Green Debt Amount.

Total acquisition price of Eligible Green Assets (millions of yen) 87,916
Ratio of interest-bearing debt to total assets (%) 45.8
Eligible Green Debt Amount (millions of yen) 40,265
  • The figures are as of May 31, 2023

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/

Status of Finance

Balance of green bonds issued

The balance of green bond issued is 2,000 million yen (as of October 1,  2023).

Issue amount
(millions of yen)
Interest rate Issue date Redemption date Use of proceeds
Hankyu Hanshin REIT Fourth Series of Unsecured Investment Corporation Bonds 1,000 0.300%
Per annum
October 28, 2020 October 28, 2025 Repayment of the loans (including the loans from subsequent refinancing) that were required for acquisition of Shiodome East Side Building, an Eligible Green Asset under the Green Finance Framework.
Hankyu Hanshin REIT Fifth Series of Unsecured Investment Corporation Bonds 1,000 0.540%
Per annum
October 28, 2020 October 28, 2030 Repayment of the loans (including the loans from subsequent refinancing) that were required for acquisition of Shiodome East Side Building, an Eligible Green Asset under the Green Finance Framework.

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 October 1, 2023).

Property name Aquisition Price (millions of yen)
DBJ Green Building CASBEE BELS LEED
HANKYU NISHINOMIYA GARDENS 18,300 ★★★★★
HEP Five 6,468 ★★★★
Kitano Hankyu Building 7,740 ★★★
Dew Hankyu Yamada 6,930 ★★★
Shiodome East Side Building 19,025 ★★★
Hankyu Corporation Head Office Building 10,200 ★★★
SHIBAURA RENASITE TOWER 3,475 S

GRAND FRONT OSAKA
(North Building)

6,566 S
GRAND FRONT OSAKA
(South Building)
9,212   S
GRAND FRONT OSAKA
(Umekita Plaza)
A
Total Amount 87,916

Quantitative indicators of Eligible Green Assets

Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022
Energy consumption(MWh) 114,742 102,832 97,466 101,814
Water consumption(㎡) 279,260 195,083 181,232 219,486
Greenhouse gas emissions(t) 15,946 13,713 13,577 12,219
  • As of October 1, 2023

  • Each figure is disclosed to the extent possible, showing the total of all figures from target properties owned in each fiscal year.
  • The figures after the conversion into primary energy are used for energy consumption.