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Green Bonds

JRE issues the Green Bonds in order to further promote our sustainability initiatives. We will promote energy conservation, improve customer satisfaction and encourage acquiring green building certifications, through various measures such as ESG investments giving consideration to environment, which includes refurbishment work etc.
Thereby realize Positive Impact (Note 1).

(Note 1) “Positive Impact” is defined as “that which produces a positive impact on society or the environment and simultaneously ensures the market-level return”. It is advocated by the United Nations Environment Programme–Finance Initiative (UNEP FI).
For more detailed information, please refer to the following UNEP FI’s website.
http://www.unepfi.org/positive-impact/positive-impact/

Green Bond Framework

■Use of Proceeds from Green Bond Issuance

The net proceeds of the green bonds will be used to refinance and/or finance the refurbishments to or the acquisition of assets that meet the eligibility criteria (“Eligible Green Projects”) outlined below.

■Eligible Green Projects

Eligible Green Projects must meet one or more of the following eligibility criteria. (Note 2)

(i) Refurbishments
Refurbishments with a primary purpose of achieving one of the following criteria which have been completed within 36 months prior to the date of green bond issuance and/or will be completed in the near future;

a. Refurbishments with more than 10% reduction in CO2 emissions or energy consumption
b. Refurbishments with more than 10% reduction in water consumption
c. More than one level of star/rank improvement in the green building certifications listed in (ii)
d. Refurbishment that contributes to the conservation and recovery of biodiversity, including of diversity of outdoor plants will also be considered if one or more of “a” through “c” criteria in (i) are met.
e. Refurbishment that contributes to the local community by improving public open space connected to the buildings and renovating for accepting people who are temporarily unable to return home will also be considered if one or more of “a” through “c” criteria in (i) are met.
f. Either one of the certifications/recertification listed in (ii)

(ii) Acquisition
Buildings that have achieved the following top three levels of third-party green building certification/recertification within 36 months prior to the date of green bond issuance and/or will achieve:

(Note 2) Eligible Green Projects are managed by the Sustainability Committee, which is composed of JRE-AM’s President and CEO (Chief Sustainability Officer), Planning Division’s Head of ESG Office (Sustainability Officer), and the chiefs and practitioners of other departments. The Eligible Green Projects are evaluated and selected based on sustainability policies and relevant criteria and determined by the President, based on JRE-AM’s job responsibilities and authority.

■Management of Proceeds

JRE internally tracks and manages the allocated and unallocated amounts of the proceeds using an internal management system. If the proceeds through green bonds are temporarily not allocated to Eligible Green Projects, JRE will manage the unallocated funds as cash or cash equivalents until they are allocated to Eligible Green Projects.

■Reporting

(i) Allocation Reporting
JRE will annually disclose the allocation information of the net proceeds of green bonds as of end of March on its website until the proceeds have been fully allocated to the Eligible Green Projects. When the proceeds are allocated toward refinancing Eligible Green Projects, the allocation information includes 1) completion dates of projects (dates of certification/recertification achieved, and dates of refurbishments completed) and 2) portion of refinanced and financed projects.
資金充当状況レポーティング  
(ii) Impact Reporting
As long as relevant green bonds are outstanding, JRE will annually disclose the progress and levels of certifications of Eligible Green Projects that have been funded by the green bonds. Additionally, JRE will also disclose the following indicators of Eligible Green Projects annually:
  • ・Energy consumption
  • ・Water usage
  • ・CO2 emissions
  • As for the Eligible Green Projects including refurbishments, as long as relevant green bonds are outstanding, the environmental impacts relevant to each project will be disclosed annually after the construction has been completed. In accordance with the criteria applied, JRE will indicate either an estimated % of reduction of energy consumption or water usage or CO2 emissions before and after refurbishment.

■Evaluation by External Organization

JRE has obtained a second-party opinion from Sustainalytics, an ESG rating agency, for the eligibility of
green bond framework (Note 3).
For the second-party opinion from Sustainalytics, please refer to the following website.
Second-party opinion from Sustainalytics

(Note 3) Green Bond eligibility means a Green Bond framework aligns with the four pillars (use of proceeds, project evaluation / selection, management of proceeds and reporting) of the Green Bond Principles 2018. The Green Bond Principles are guidelines regarding issuance of green bond established by International Capital Market Association (ICMA). For detailed information on the Green Bond Principles, please see the ICMA’s website below.
https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/

(Example) Refurbishments of Shiba 2Choume Daimon Building

■Outline of refurbishments of Shiba 2Choume Daimon Building

Refurbishments of Shiba 2Chome Daimon Building which has already been started apply to the Eligible Green Projects. Among the above eligibility criteria, “refurbishments with more than 10% reduction in CO2 emissions or energy consumption” and “3 Stars under the DBJ Green Building Certification” are met by this project. Additionally, as for DBJ Green Building Certification, our efforts which contributes to disaster prevention and BCP, as well as installing highly efficient air conditioning and LED lighting inside the building were highly evaluated.
Outline of refurbishment of Shiba 2Chome Daimon Building is as follows.

daimon 3stars
Name of property Shiba 2Chome Daimon Building
Location 2-3-3 Shiba, Minato-ku, Tokyo
Area Land 2,820 m2 ( Total land area)
Building 16,235 m2 ( Total floor space)
Structure Steel-framed, Steel-framed reinforced concrete structure, flat roof
Above ground: 8 floors
Below ground: 2 floors
Time of completion March 1984
Type of ownership Land Ownership
Building Ownership
Time of acquisition September 2001
Acquisition price JPY 4,859 million

■Main contents of the refurbishments

This project was designed with reference to the idea of the UN Environment Finance Initiative’s Principles for Positive Impact Finance.

(i) Replacement of building equipment to reduce environmental impacts
Installing highly efficient air conditioning and LED lighting inside the building
(ii)Improvement of tenant satisfactory business environment
Develop and expand shared spaces including lounges, which many tenants requested on the tenant satisfaction surveys
(iii)Consideration for the health and well-beings of tenants’ employees
Provide a relaxation space with partial greening and natural materials, where they can feel relaxed and refreshed
(iv)Value Enhancement in terms of design
Study various designs giving consideration to ESG
Enhance the presence of the property through renewing the existing image of the property

<Energy reduction resulting from installing highly efficient air conditioning>

*Electricity consumption and gas consumption are the crude oil equivalent.
The above comparison is based on theoretical calculations.

  • Asset Managerジャパンリアルエステイト JRea

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