Environment
KPIs and Targets
Environmental Management
Related Material Issues
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Contributing to a safe and secure society
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Wellbeing
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Addressing the diverse needs of customers and society
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Social implementation of technology
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Promoting a decarbonized society
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Promoting a recycling-oriented society
Policy and Concept
Under the Tokyo Tatemono Group Environmental Policy, we will help build a sustainable society through environmentally conscious business activities. We have identified promoting both a decarbonized society and a recycling-oriented society as environmental material issues and, by working to resolve these issues through our business, aim to realize coexistence with the Earth and the environment, a value we share with society.
Group Environmental Policy Established January 2011
We will help build a sustainable society through environmentally-friendly business activities based on the following Group Environmental Policy.
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Creating a pleasant city and living with greenery
We will create a rich and comfortable environment for Earth and people by utilizing the strength of greenery as much as possible with consideration to biodiversity.
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Climate change prevention that leads the community
We will actively implement environmentally-friendly technologies and ideas into our products and services to lead the community in building a low-carbon city.
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Resource-saving activities that are kind to the Earth
We will strive to reduce the use of resources and environmental impact through all available opportunities and contribute to creating a recycling-oriented society.
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Developing employees with high environmental awareness
We will comply with laws related to the environment and educate and raise the awareness of our employees about the environment.
Environmental Management Framework
The Tokyo Tatemono Group promotes environmental measures across the entire Group under the Sustainability Committee, chaired by our President, and the Sustainability Promotion Committee, a subordinate organization of the Sustainability Committee.
We have also established an environmental management system for each of our businesses, tailored to their specific characteristics. Under these systems, we create PDCA cycles, formulate environmental measures, share information, support promotion and implementation, provide guidance, manage progress, and carry out improvements to initiatives.
Environmental Management Framework Chart
Actions
Promoting a Decarbonized Society
Related Material Issues
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Addressing the diverse needs of customers and society
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Social implementation of technology
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Promoting a decarbonized society
Policy and Concept
Realizing a decarbonized society is a social issue that calls for global solutions. The real estate industry must also strive to reduce greenhouse gas (GHG) emissions derived from real estate holdings and business activities. The Tokyo Tatemono Group further believes that the intensification of storms, flooding, and other natural disasters owing to GHG emissions could have a significant impact on the assets it owns. From this perspective as well, we recognize the need to prioritize this issue.
The Tokyo Tatemono Group Environmental Policy calls for us to lead the community in the prevention of global warming. In addition, we have identified the promotion of a decarbonized society as a material issue, and in order to address this issue through our business, we have set KPIs and targets related to the promotion of a decarbonized society. We are also accelerating our efforts to reduce GHG emissions, etc.
In October 2023, we raised our target for GHG emission reductions by FY2030 to the 1.5°C level. Based on these assumptions, we put in place a roadmap (action plan) for reducing GHG emissions in the Group toward FY2050.
Roadmap for Reducing Greenhouse Gas Emissions
Disclosure Based on TCFD Recommendations
Governance
The Tokyo Tatemono Group has established the Sustainability Committee, chaired by the President, and the Sustainability Promotion Committee as a subordinate organization to promote sustainability with regard to areas such as climate change.
The Sustainability Committee, like the Executive Committee, Risk Management Committee, and Internal Control Committee, is under the direct control of the President. It meets in principle at least twice a year to deliberate and discuss matters related to the formulation of the Group's sustainability policies, the development of systems, the setting of indicators and targets, and the monitoring and evaluation of progress. The Sustainability Committee deliberates and discusses important matters concerning climate change, such as the identification of risks and opportunities, greenhouse gas (GHG) emissions reduction targets and policies, and the status of initiatives to address climate change. Important matters discussed and deliberated by the Sustainability Committee are brought up for discussion by or are reported to the Board of Directors, which makes decisions on important sustainability-related matters and monitors and supervises the status of their promotion. The Sustainability Promotion Committee, which sits under the Sustainability Committee, is a cross-sectional organization composed of corporate departments and business divisions. It shares the decisions of the Sustainability Committee, conducts preliminary discussions for consideration, shares and considers the Group's sustainability measures, and reports on and discusses the progress of the Group's sustainability efforts.
Strategy (Scenario Analysis)
The Tokyo Tatemono Group identifies risks and opportunities related to climate change, assesses their significance, and conducts analyses of the impact different scenarios could have on the Group's business profit using scenarios it has set.
Risk Analysis Review Process
Setting Up the Scenarios
For our scenario analysis, we set up future worlds (scenarios). To create our scenarios, we made use of scenarios published by the IPCC*1 and the IEA*2. In our 4°C scenario, in which current policies are maintained, the average temperature rises by 4°C or more compared to pre-industrial levels by 2100. In our 2°C scenario, a delayed transition scenario, the average temperature increase is limited to less than 2°C. In our 1.5°C scenario, the average temperature increase is kept below 1.5°C.
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IPCC (Intergovernmental Panel on Climate Change): An institution that provides clear scientific opinions on the status of climate change and its socioeconomic impact.
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IEA (International Energy Agency): An independent body within the OECD that facilitates policy cooperation on energy security and energy.
The Scenarios Used in the Analysis
| Scenarios | Scenario Analysis | Reference Scenario |
|---|---|---|
| 4°C scenario | A scenario in which the average temperature rises by about 4°C compared to pre-industrial levels as a result of failure to introduce stricter government policies and strengthen regulations, such as regulations to curb GHG emissions, and of failure by businesses to take effective action in response to climate change. Acute effects include more frequent extreme weather events and more intense heavy rainfall, while chronic effects include rising sea levels. | IPCC SSP5-8.5 (RCP 8.5) IEA STEPS |
| Scenarios | Scenario Analysis | Reference Scenario |
|---|---|---|
| 1.5C/2°C scenario | A scenario in which the average temperature rise compared to pre-industrial levels is kept below 1.5°C or 2°C by improving low-carbon technologies, expanding renewable energy, and promoting energy conservation. In this scenario, companies around the world are strongly required to respond to climate change by introducing carbon taxes and strengthening policies to regulate emissions in order to curb GHG emissions. | IPCC SSP1-1.9 （RCP 2.6） IEA NZE IEA SDS |
Identifying Risks and Opportunities/Assessing Materiality
Looking at the Tokyo Tatemono Group's core businesses-the Commercial Properties Business and Residential Business-and based on the areas where we develop and own buildings as well as the conditions of each business phase (development, operation and management, and sale), we identified the main risks and opportunities concerning climate change for each and assessed their materiality in terms of their expected degree of impact on the Group's finances and likelihood of occurrence. The period of impact was categorized into short-term (1-5 years), medium-term (5-10 years), and long-term (>10 years).
Identified Risks, Opportunities, and Materiality Concerning Climate Change
| Category | Item | Impact on the Tokyo Tatemono Group's business | Period of impact | Materiality | ||
|---|---|---|---|---|---|---|
| 4°C scenario | 1.5°C/2°C scenario | |||||
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Transition risks |
Policies |
Adoption of carbon pricing |
Imposition of carbon tax on own emissions (Scope 1 and 2) |
Medium-term |
ー |
Medium |
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Price hikes for construction materials, construction costs, etc. |
Medium-term |
ー |
Medium |
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Regulations |
Stricter standards for GHG emissions and energy saving |
Higher costs of converting new buildings to ZEB/ZEH |
Medium-term |
Low |
Low |
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Higher costs of introducing decarbonized building materials |
Medium-term |
Medium |
Medium |
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Increase in cost of energy-saving renovation of existing buildings |
Medium-term |
Low |
Low |
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Technology and Markets |
Higher unit cost of grid electricity |
Higher utility costs due to change in energy mix |
Short- to medium-term |
ー |
Low |
|
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Higher utility costs due to higher demand for fossil fuels |
Short- to medium-term |
Low |
ー |
|||
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Burden from renewable energy procurement |
Higher renewable energy procurement costs |
Short- to medium-term |
Low |
Low |
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|
Reputation |
Ensuring disaster preparedness and resilience |
Higher costs of ensuring disaster preparedness and resilience |
Short-term |
Low |
Low |
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Physical risks |
Acute |
Frequent and severe extreme weather caused by extratropical and tropical cyclones, etc. |
Higher costs due to construction delays caused by supply chain paralysis or disruption |
Short-term |
ー |
ー |
|
Decrease in work efficiency at construction sites and delays in construction schedules due to frequent heat waves, high temperatures, etc. |
Short-term |
ー |
ー |
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Decreased rental income in the event of flooding due to heavy rains or river flooding |
Short-term |
Low |
Low |
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Increased restoration costs due to building damage from wind and flood damage |
Short-term |
Low |
Low |
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Higher insurance premiums |
Short-term |
Low |
Low |
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Chronic |
Rise in average temperature |
Higher utility costs |
Short-term |
Low |
Low |
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Opportunities |
Technology |
Efficiency improvements with ZEB and ZEH development |
Reduction of utility costs |
Short-term |
Low |
Low |
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Procurement of renewable energy through self-consignment |
Reduction in utility costs and renewable energy procurement costs |
Short-term |
Low |
Low |
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Consumer behavior |
Improved earnings from high environmental performance properties |
Higher sales due to higher evaluation of ZEB/ZEH |
Short- to medium-term |
ー |
Medium |
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Improvement of energy-saving effects |
Addition of energy-saving effects to rental income |
Short- to medium-term |
ー |
Low |
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Markets |
Expansion of ESG finance |
Reduction in financing costs |
Short-term |
ー |
Low |
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Countermeasures
The Tokyo Tatemono Group has identified the promotion of a decarbonized society as a material issue and is working to minimize climate change risks through its business. At the same time, the Group also views the situation as an opportunity and is working to solve the challenges involved. To promote a decarbonized society, we have established medium- and long-term targets for reducing greenhouse gas (GHG) emissions and, to achieve these targets, we are taking measures such as shifting to renewable energy and promoting the development of ZEB/ZEH and green buildings. We are also focusing on urban development and real estate development that take into account resilience to damage from storms, floods, and other natural disasters which are becoming more frequent with climate change. Specific measures are described in Initiatives to Achieve GHG Emission Reductions .
Estimating Business Impact
We quantitatively assess the identified climate change risks and opportunities for their impact on the Tokyo Tatemono Group's FY2030 financials.
For risks and opportunities for which quantitative data is not readily available, we carry out a qualitative analysis.
Impact on the Group's Business Profit
Risk Management
Tokyo Tatemono has established a Risk Management Committee chaired by the President to build a system to oversee risk management for the Tokyo Tatemono Group. The Risk Management Committee formulates an annual risk management plan, evaluates and analyzes key management risks for the Group (priority risks), formulates preventive measures and countermeasures, and periodically monitors the status thereof. For risks other than priority risks, the heads of departments, offices, and branches as well as various committees act as risk response organizations (risk owners) to prevent and manage such risks.
With regard to sustainability-related risks, the Sustainability Committee, as the risk response organization (risk owner), works with relevant departments, offices, and branches to prevent and manage such risks, and reports important matters on the status of implementation to the Risk Management Committee. Important matters from among those deliberated at Risk Management Committee meetings are brought up for discussion by or are reported to the Board of Directors, and the Board of Directors oversees the effectiveness of the Group's risk management, including risks concerning sustainability.
Indicators and Targets
The Tokyo Tatemono Group has set medium- and long-term targets for the promotion of a decarbonized society, identified as one of the Group's material issues. In 2021, we established net zero CO2 emissions by FY2050 as the goal for our greenhouse gas (GHG) emission reductions, and set a target of reducing our Scope 1, 2, and 3 CO2 emissions by 40% compared to FY2019 levels by FY2030.
Thereafter in 2023, in response to increasing societal demand for companies to address climate change, such as the COP26 Glasgow Climate Pact, we accelerated our efforts by raising the target to reduce Scope 1 and 2 emissions by 46.2% by FY2030 compared to FY2019 levels, which is the level required to limit the increase in global average temperature to 1.5°C compared to pre-industrial levels.
We have also set goals related to promoting the development of ZEB and ZEH, shifting to renewable energy, and acquiring green building certifications as process goals to achieve our medium-and long-term targets. In 2023, we brought forward our targets for the electricity consumed at the real estate holdings of our Commercial Properties Business by 20 years, setting a target of 100% procurement from renewable energy sources by FY2030 (and at least 50% by FY2024). We have also brought forward and strengthened other targets for promoting the development of ZEB and ZEH and acquiring green building certifications, such as including new for-rent condominiums in these targets.
| Item | Scope of Coverage | KPIs and Targets | |
|---|---|---|---|
| Reduction in greenhouse gas emissions | All businesses*1 | Scope 1, 2, and 3 | Net zero CO₂ emissions by FY2050 |
| Scope 1 and 2 | 46.2% reduction in CO₂ emissions compared to FY2019 levels by FY2030 | ||
| Scope 3 *2 | 40% reduction in CO₂ emissions compared to FY2019 levels by FY2030 | ||
| Promotion of development of ZEB and ZEH*3 | Commercial Properties Business | Develop ZEB for, in principle, all new office buildings and logistics facilities*4 | |
| Residential Business | Develop ZEH for, in principle, all new for-sale and for-rent condominiums*5 | ||
| Shift to renewable energy | All businesses*1 | By FY2050, procure 100% of electricity consumed in business activities from renewable energy sources | |
| Commercial Properties Business | By FY2030, procure 100% of electricity consumed at owned real estate from renewable energy sources | ||
| By FY2024, procure at least 50% of electricity consumed at owned properties from renewable energy sources | |||
| Acquisition of Green Building Certification*6 | Commercial Properties Business, Residential Business | Acquire green building certification for, in principle, all new office buildings, logistics properties, and condominiums*7 for rent, etc. | |
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Applies to the Tokyo Tatemono Group.
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Applies to Scope 3 categories 11 and 13.
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In addition to ZEB and ZEH-M, includes Nearly ZEB, ZEB Ready, ZEB Oriented, Nearly ZEH-M, ZEH-M Ready, and ZEH-M Oriented.
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Applies to new buildings for which design work began in January 2023 or later.
Excludes certain properties such as joint venture properties or properties with special uses. -
Applies to new buildings for which design work began in June 2021 or later.
Excludes certain properties such as joint venture properties or properties with special uses. -
Mainly refers to DBJ Green Building certification, CASBEE building certification and BELS (Building-housing Energy-efficiency Labeling System) certification.
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Applies to new buildings for which design work began in January 2023 or later.
Excludes certain properties such as joint venture properties or properties with special uses.
Transition risks analysis with CRREM
Analysis overview
CRREM (Carbon Risk Real Estate Monitor) calculates and publishes the greenhouse gas (GHG) emissions pathways (decarbonization pathways) to 2050 that are consistent with the 2℃ and 1.5℃ targets required by the Paris Agreement for each property type in Europe, North America and Asia-Pacific including Japan, and also publishes a tool to visualise some of the transition risks by comparing the GHG emissions pathways of the analysed buildings with the CRREM pathways. CRREM analysis using this tool is expected to be used for operational improvements, such as calculating when GHG emission pathway of the analysed buildings will exceed the CRREM pathways (becoming a stranded asset) and future carbon costs, and identifying the scale of retrofitting required to address these issues.
In order to analyse the risks in the transition to a decarbonized society consistent with the 1.5℃ targets required by the Paris Agreement, we conducted the CRREM analysis* of our long-term building holdings (as at end-December 2022, hereafter 'our portfolio').
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We used CRREM v2.03 in this analysis. It is based on the Asia-Pacific version, with some parameters (e.g. emission factors for grid electricity) adjusted to suit the actual situation in Japan.
In accordance with CRREM's analysis methodology, we compared the GHG emissions pathways of our portfolio with the CRREM pathways consistent with the 1.5℃ targets for the following two scenarios.
Scenario 1) is the case in which, in our portfolio, operations to promote energy savings, upgrades to high-efficiency equipment and the introduction of Raw Green Power, such as on-site power generation and self-consumption, self-consignment and corporate PPAs are taken into account.
Scenario 2) is the case in which, in addition to the initiatives in Scenario 1), the introduction of renewable energy through switching to electricity using Non-fossil Fuel Certificates with Tracking and purchasing non-fossil certificates is taken into account.
In addition, the Tokyo Tatemono Group has established medium- and long-term targets for reducing GHG emissions and, to achieve these targets, we are taking various initiatives towards decarbonization, including promoting the development of ZEB/ZEH, shifting to renewable energy and acquiring green building certification. The results of the analysis of scenario 2) of the above scenarios, which is close to our initiatives, are therefore discussed below.
Analysis results
Although GHG emissions from electricity will be reduced through the shifting to renewable energy, and GHG emissions from various energy sources will be reduced through operations to promote energy saving and upgrades to high-efficiency equipment, some GHG emissions from fuels such as gas and heat such as district heating and cooling will remain, which means that before 2040 the our portfolio pathways is expected to exceed the CRREM pathways.
In this analysis, it was assumed that our portfolio as of the end of FY2022 will not be replaced in the future, however in reality, GHG emissions from our long-term buildings are expected to be further reduced by reconstructing to energy-efficient buildings and replacing buildings to energy-efficient buildings.
Strategies based on the results of the analysis
We will continue to operate to promote energy saving, upgrade to high-efficiency equipment and shift to renewable energy, as well as reconstruct to energy-efficient buildings and replace buildings to energy-efficient. In addition, for new buildings to be developed in the future, we will develop ZEB/ZEH and green buildings and work on the introduction of renewable energy to increase the proportion of buildings with low GHG emissions in our long-term holdings and reduce GHG emissions in the future.
Actions
Responding to Natural Disasters
Related Material Issues
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Strengthening Tokyo's competitiveness as an international city
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Contributing to a safe and secure society
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Community building and revitalization
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Wellbeing
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Social implementation of technology
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Promoting a decarbonized society
Policy and Concept
Natural disasters such as major earthquakes and typhoons threaten our way of life. Climate change has resulted in frequent destructive typhoons and extreme weather in recent years. As a result, interest is rising faster than ever in the safety of real estate, which is a foundation of our lives.
As a real estate services provider, the Tokyo Tatemono Group believes that improving resilience against disasters in ordinary times and providing safety and security to our customers and other stakeholders are important responsibilities.
We have identified contributing to a safe and secure society as a material issue for the Group. To address this issue through our business operations, we will continue to further strengthen our measures against natural disasters.
Actions
Biodiversity
Related Material Issues
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Promoting a decarbonized society
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Promoting a recycling-oriented society
Policy and Concept
The Tokyo Tatemono Group is working toward a vision of creating a pleasant city and living with greenery, a commitment that is included in our Group Environmental Policy. We endeavor to understand the direct and indirect impacts we have on the local ecosystems and natural environments that are intrinsically linked to our real estate development projects, and to give appropriate consideration to these issues. We are striving to create a rich and comfortable environment that takes biodiversity into consideration, and our efforts include maximizing the power of greenery by transplanting trees on our properties in line with their development plans, surveying local vegetation and the distribution of organisms, and selecting tree species to plant.
We have established environmental guidelines for both our Commercial Properties Business and Residential Business. Both sets of guidelines establish policies for greening buildings and sites, using greening to mitigate the heat island effect, preserving biodiversity and ecosystems including links to the surrounding greenery, and using greenery for communication with tenants and residents as well as the surrounding area. In addition, we have acquired third-party certifications for the preservation of existing trees and the conservation of ecosystems such as ABINC*1 and SEGES*2 for our properties that are capable of implementing initiatives of a certain scale.
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A system for evaluating and certifying biodiversity conservation efforts in the use of land for office buildings and housing complexes. It is based on the Association for Business Innovation in harmony with Nature and Community® Promotion Guidelines and the Land Use Score Card® , evaluation standards created by the Japan Business Initiative for Biodiversity (JBIB).
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An evaluation system for green spaces that contribute to society and the environment by the Urban Greenery Research Institute, which visualizes the social and environmental value of green spaces.
Actions
Water Resources
Related Material Issues
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Contributing to a safe and secure society
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Promoting a recycling-oriented society
Policy and Concept
As water shortages become even more severe worldwide, developed nations and the rest of the world face demands to continuously improve the efficiency of water use.
The Tokyo Tatemono Group Environmental Policy includes a call for resource-saving activities that are kind to the Earth. In addition, we have identified the promotion of a recycling-oriented society as one of our material issues and have also established KPIs and targets concerning water resources in order to address the resolution of this issue through our business activities. With the aim of conserving water resources, we are striving to reduce our environmental impact and engage in resource-saving activities such as taking every opportunity to conserve water and reusing rain water and miscellaneous wastewater.
Actions
Promoting a Recycling-oriented Society
Related Material Issues
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Contributing to a safe and secure society
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Promoting a decarbonized society
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Promoting a recycling-oriented society
Policy and Concept
Pollution of the air, soil, and water caused by waste and hazardous substances and the depletion of natural resources are issues shared by all of society. Businesses have an obligation to reduce the waste and hazardous substances generated by their activities and use natural resources effectively.
The Tokyo Tatemono Group Environmental Policy includes a call for resource-saving activities that are kind to the Earth. In addition, we have identified the promotion of a recycling-oriented society as one of our material issues, and have also established KPIs and targets related to waste in order to address the resolution of this issue through our business activities. We are striving to reduce our environmental impact through our businesses and contribute to creating a recycling-oriented society. In the development of buildings, we engage in planning, designing, and construction plan formulation in a way that considers environmental and life-cycle assessments. In operation and management, we reduce waste while curbing and properly managing hazardous substances.
Actions
External Evaluation and Certification for Green Buildings
Related Material Issues
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Strengthening Tokyo's competitiveness as an international city
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Addressing the diverse needs of customers and society
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Revitalizing and utilizing real estate stock
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Promoting a decarbonized society
Policy and Concept
The Tokyo Tatemono Group recognizes that, to meet the expectations and demands of our tenants, investors, and other stakeholders, it is essential that we develop and operate real estate while taking into consideration the reduction of our environmental impact as well as the comfort and diversity of our users. It is also key that we provide open disclosure of our performance and initiatives related to such real estate.
The Tokyo Tatemono Group has identified the promotion of a decarbonized society as one of its material issues, and has established KPIs and targets for promoting the development of ZEB and ZEH as well as acquiring green building certifications in order to address this issue through its business activities. In addition to new buildings, we are actively obtaining external green building evaluations and certifications for our existing office buildings and for-rent condominiums.
Actions
Sustainability Finance
Related Material Issues
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Strengthening Tokyo's competitiveness as an international city
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Contributing to a safe and secure society
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Community building and revitalization
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Addressing the diverse needs of customers and society
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Value co-creation and innovation
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Promoting a decarbonized society
Policy and Concept
Sustainability finance refers to bonds and loans to raise funds specifically for the purpose of promoting sustainability by addressing environmental issues such as climate change or social issues such as poverty, health, and economic disparity.
The Tokyo Tatemono Group promotes urban development that contributes to solving social issues. We strive to improve the attractiveness of the areas in which we develop and to increase the value of our entire asset portfolio. We aim to channel these efforts toward our sustainable growth as a company.
We will accelerate the cycle of allocating the funds we raise to projects that help bring about a sustainable society. We will help promote a decarbonized, sustainable society by balancing, at a high level across our operations, the need to address social issues with the need for business growth.
Sustainability Finance Framework
Tokyo Tatemono has put in place several finance frameworks to guide its financing. These frameworks apply the four requirements defined in the Green Bond Principles, Social Bond Principles, Green Loan Principles, and Social Loan Principles referred to by the International Capital Markets Association: Use of Proceeds, Process for Project Evaluation and Selection, Management of Proceeds, and Reporting.
Use of Proceeds
Proceeds will be allocated to projects that meet eligibility criteria such as the acquisition or construction of green buildings and social projects addressing social problems, or will be used for refinancing such projects.
Process for Project Evaluation and Selection
The Finance and Sustainability Management Departments select projects that meet the eligibility criteria. The final decision is made by the President or the Chief Financial Officer.
Management of Proceeds
The status of the allocation of proceeds is tracked and managed by the Finance Department using an internal control system. The results are confirmed by the officer in charge of the Finance Department or the general manager of the Finance Department on a quarterly basis. The proceeds are managed as cash or cash equivalents until they are allocated. For unallocated proceeds, should they arise, projects will be selected from among projects that meet the eligibility criteria. The unallocated proceeds will be managed in cash or cash equivalents until their reallocation is decided.
Reporting
We disclose the allocation status of proceeds, environmental improvement impacts, and social benefits on our website once yearly until all proceeds classified for allocation reporting are fully allocated.