Daiwa Office Investment : Sustainability Report 2022 has been published.

Sustainability Report 2022

Issued on July 21, 2022

Sustainability Report 2022

About this Sustainability Report

Contents

• Policy Regarding Sustainability
  and Sustainability Promotion System
  Policy Regarding Sustainability and Sustainability Promotion System ……………………………….……… 1

• Governance Initiatives
  Investment Corporation Institutions/
  Management Structure ……………….………............ 21 Compliance Structure ……………............................... 23

In recent years, interest in ESG (environment, social and governance) has been growing since then among companies and investors.

Daiwa Office Investment Corporation (the "Investment Corporation") has, together with Daiwa Real Estate Asset Management Co. Ltd. (the "Asset Manager") to which the Investment Corporation entrusts asset management, taken ESG into consideration through its business activities.

Through this Sustainability Report, we hope that you will deepen your understanding of the ideas and efforts of the Investment Corporation and the Asset Manager toward sustainability.

• Environmental Initiatives
  Climate Change Initiatives ..……………….………….…. 3 Environmental Targets and Performance .………….…. 9 Implementing Eco-Friendly Initiatives via Real Estate Investment ………………………………….……………. 10 Eco-Friendly Initiatives with Stakeholders ……………. 12
• Social Initiatives
  Efforts for Tenants ……………………………............... 13 Efforts for Community ………………………….…...… 14 Disaster Prevention Efforts ….…………………......... 16 Efforts for Employees ……………………………….... 17

• Acquisition of External Assessments/ Certifications

Participation in External Assessments ………............. 26
Acquired External Certifications ..................................	27

• Green Finance
  Green Finance ………………..………….................... 31

	Policy Regarding Sustainability	Environmental Initiatives	Social Initiatives	Governance Initiatives	Acquisition of External	Green Finance
	and Sustainability Promotion System	Assessments/Certifications

Policy Regarding Sustainability and Sustainability Promotion System

Top Message

	Daiwa Office		Daiwa Real Estate
	Investment Corporation		Asset Management Co. Ltd.
	Executive Director		President and Representative Director
	Seiya Miyamoto		Yoshiki Nishigaki

Recognizing that emphasizing ESG, which are environmental consideration, social contribution and stronger organizational governance, upon promoting asset management business contributes to the enhancement of investment corporations' corporate value over the medium to long term, the Asset Manager has established a system to promote ESG through company-wide efforts.

The Asset Manager established the "Sustainability Promotion Committee" in 2014 and the "Policy Regarding ESG" in March 2019. Furthermore, through establishment of the Sustainability Promotion Office at the Asset Manager in June 2021 for further strengthening of initiatives on sustainability, sustainability initiatives have been promoted on an organizational basis, including strengthening of the authority of the Sustainability Promotion Committee.

The Investment Corporation has continuously participated in GRESB Real Estate Assessment since 2011 and acquired several environmental certifications and ratings by external evaluation organizations. It has been working to lower the environmental burden at its portfolio properties through effective utilization of limited resources, including energy saving, reduction of greenhouse gas emissions, water saving and such. Furthermore, the Investment Corporation is determined to further enhance its corporate value while aiming to realize sustainable society by coordinating and working together with all stakeholders involved in the portfolio properties (investors, tenants, local communities, employee, etc.) by forming favorable relationships with them.

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	Policy Regarding Sustainability	Environmental Initiatives	Social Initiatives	Governance Initiatives	Acquisition of External	Green Finance
	and Sustainability Promotion System	Assessments/Certifications

Policy Regarding Sustainability and Sustainability Promotion System

Policy Regarding ESG

The Investment Corporation will focus on the following items in the asset management for the Investment Corporation judging that emphasizing ESG (Environment, Social and Governance) contributes to the enhancement of the Investment Corporation's medium-tolong-term corporate value.

• SFDR Principal Adverse Impact Statement
• Summary of SFDR Pre-Contractual Disclosure

1. Initiatives on Environmental Protection (Environment)

We will proactively promote initiatives on environmental protection including resource and energy-saving measures such as the introduction of facilities and equipment contributing to environmental protection at the properties owned.

2. Connection to Society (Social)

We will proactively disclose information and fulfill our accountability to all stakeholders through IR activities, etc. We will accomplish the social mission of an asset manager by providing high-quality and comfortable residential spaces for tenants.

Moreover, in order to contribute to society through superior asset management, we strive to create a comfortable work environment that respects the work-life balance of executives and employees and at the same time endeavor to develop human resources through internal and external training.

3. Corporate Governance (Governance)

We will make highly transparent and reasonable decisions under laws and regulations and various rules while being aware of the importance of corporate ethics and compliance. In addition, the Asset Manager will work to strengthen internal control systems including avoidance of conflicts of interest and risk management and to train officers and employees in order to fulfill the duty of care and fiduciary duty.

Sustainability Promotion System

The Asset Manager has established the following organizational structure in order to implement the Policy Regarding ESG and continuously promote initiatives on sustainability.

Sustainability Promotion Committee

(Members)

• President and Representative Director (Chief Executive Officer for Sustainability Promotion)
• Executive Managing Director
• General Managers of DOI Investment Management Dept., DLI Investment Management Dept., Private REIT Investment Management Dept., and Private Fund Management Dept. (Chief Sustainability Officers)
• Head of Sustainable Promotion Office
• Compliance Officer
• Others who are appointed by the Chief Executive Officer

(Contents of deliberation/reports, frequency, consideration process)

The Sustainability Promotion Committee is held regularly (once a month, in principle) in order to realize the policy and targets for sustainability. The committee deliberates matters such as management policies on sustainability, target setting, and their revision and abolition, and reports on the progress of the targets, etc.

Establishment of Sustainable Promotion Office

The Sustainable Promotion Office was newly established at the Asset Manager on June 1, 2021, to further strengthen initiatives on sustainability. Matters concerning ESG and SDGs of all investment corporations whose assets are managed by the Asset Manager and of the Asset Manager will be planned, drafted and executed organizationally by the office.

Establishment of Sustainability Promotion Policy

To enhance the effectiveness of our sustainability activities, we have established (1) Energy Conservation Policy, (2) Greenhouse Gas Emissions Reduction Policy, (3) Water Saving Policy, and (4) Sustainable Procurement Policy, and a cooperative framework with each of

our stakeholders.	Sustainability Report 2022	2

Policy Regarding Sustainability	Environmental Initiatives	Social Initiatives	Governance Initiatives	Acquisition of External	Green Finance
and Sustainability Promotion System	Assessments/Certifications

Climate Change Initiatives
Our Approach to Climate Change	Support for TCFD Recommendations	Governance Related to Climate Change

The world has been accelerating the transition to a carbon- neutral society. This trend is found in the global long-term goal set in the Paris Agreement, an international framework since 2020 to address global warming. The goal in the agreement is to hold the increase in the global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels, and Japan has declared its intention to achieve carbon neutrality by 2050.

The Investment Corporation and the Asset Manager view climate change as an important issue that changes the natural environment and social structures dramatically and has a significant impact on real estate management. Contribution to the achievement of a carbon-neutral society is considered as a social mission.

In accordance with the TCFD recommendations, we will identify and analyze risks and opportunities related to climate change and proceed with step-by-step disclosure of information related to climate change. We will continuously work to reduce the environmental impact of business activities as we understand social needs and expectations for us through active dialogue with external stakeholders.

The Task Force on Climate-related Financial Disclosures (TCFD) is an international initiative established by the Financial Stability Board (FSB), at the request of the G20. The purpose of the TCFD is to discuss disclosure of climate- related financial information and the responses by financial institutions. The TCFD Consortium is a group of companies, financial institutions, and other organizations that support the TCFD recommendations. The consortium was established with a view to further discussing effective corporate disclosure of climate-related information and initiatives to link disclosed information to appropriate investment decisions on the part of financial institutions and other organizations.

To clarify the policy and system for addressing climate- related issues and expand the disclosure of information about relevant initiatives, the Asset Manager established the Climate Change and Resilience Policy and announced its support for the TCFD recommendations in December 2021. In January 2022, the Asset Manager joined the TCFD Consortium, a group of domestic companies that support the TCFD recommendations.

Click here for TCFD.

Click here for TCFD Consortium.

The Asset Manager has established the Climate Change and Resilience Policy, the policy for responding to risks and opportunities related to climate change and working to make business and strategy resilient to climate-related issues.

In accordance with the policy, Chief Climate-Related Issues Officers (general managers of departments engaged in sustainability promotion) make regular reports to the Chief Executive Officer for Climate-Related Issues (President and Representative Director) at Sustainability Promotion Committee meetings. The reports cover matters related to responses to climate change, including identification and evaluation of impacts of climate change, management of risks and opportunities, progress of initiatives for adaptation and mitigation, and indicator and target setting. The Sustainability Promotion Committee deliberates and discusses issues related to climate change, after which the Chief Executive Officer for Climate-Related Issues makes final decisions. Under this system, climate-related issues are supervised by the President and Representative Director.

Click here for Sustainability Promotion System.

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