AEON REIT Investment CorporationSecurities Code:3292

Green Finance

Content of report

Amount of funds procured through Green Finance

Funds Date of procurement Date of repayment/ redemption Allocation Use of initial funds
Green loan \3.3bn Oct. 21, 2019 Oct. 20, 2022 Allocated Acquisition of Aeon Mall Kofu Showa
(existing building)
Acquisition of Aeon Mall Kagoshima
Total \3.3bn
Green bond \12.0bn Dec. 6, 2022 Dec. 6, 2029 Allocated Acquisition of Aeon Mall Kofu Showa
(existing building)
Acquisition of Aeon Mall Kagoshima
Total \12.0bn
Green Finance Total \15.3bn

Upper Limit of Green Finance Procurement

Item Number of properties Latest fiscal year
Total properties 41 380.5 bn
Green Aualified Asset 19 227.4 bn
DBJ Green Building 16 184.0 bn
CASBEE 3 43.3 bn
Green Finance Upper Limit of Procurement(*) 102.1 bn
* The Upper Limit of the Green Finance Procurement = Total Acquisition Value of Green Qualified Assets × the total asset LTV

List of properties certified by third-party certification body

External certification : https://www.aeon-jreit.co.jp/en/sustainability/external.html

Reduction in energy consumption and CO2 emissions

Item Unit Latest fiscal year
Energy Electricity Consumption
Energy intensity
Gas Consumption
Energy intensity
Greenhouse gas Consumption
Energy intensity

Renovations selected in qualification criterion 2 and expected reduction rate

No funds have been procured for properties that meet qualification criterion 2.

Green Finance Framework

With the basic philosophy of contributing to the enhancement of people's lives and local communities through investment in retail facilities and related properties, AEON REIT Investment Corporation aims to ensure stable income in the medium to long term by investing in assets that form the backbone of local communities and their lifestyle infrastructure. To achieve this philosophy and goal, it is important to take ESG into consideration in all aspects of operations and collaborate with stakeholders who facilitate it. Based on this concept, AEON Reit Management Co., Ltd., with which the Investment Corporation entrusts the management of its assets, has established a policy for sustainability and will facilitate its implementation. The Investment Corporation has decided to establish its Green Finance Framework to enhance fund procurement means by attracting more investors who are ready to make ESG investments and contribute to the development of Green Finance Initiatives, involving the investment corporation bonds and green bonds markets, while simultaneously realizing this philosophy and goal.

Use of funds

Use of funds

The Investment Corporation will use funds procured through green bonds or green loans ("Green Bonds etc.") for the acquisition of green buildings and renovations that meet the qualification criteria below and the refinancing of the borrowings used for the acquisition and renovations.

Qualification criterion 1

Properties that have obtained or are expected to obtain any third-party certificate that falls under items (i) to (v):
(i) Three, four or five stars in DBJ Green Building Certification;
(ii) B+, A or S ranking in CASBEE Real Estate Certification;
(iii) Three, four or five stars in BELS Evaluation;
(iv) Silver, Gold or Platinum in LEED certification; and
(v) Any third-party certificate, other than the said certifications, whose ratings are equivalent to such respective ratings.

Qualification criterion 2

Real estate under management has undergone facility renovations aimed at making improvements that are beneficial from an environmental perspective, such as energy efficiency and water consumption performance (in principle, renovations shall be expected to reduce consumption by 10% or more).

Criteria to determine adherence to qualification criteria

Criteria to determine adherence

The Finance and Planning Department of the Asset Management Company assesses and examines whether properties for which funds procured through Green Finance are used meet the qualification criteria.

Process

Proposals for green projects, for which funds procured through Green Finance are used, are made by the Finance and Planning Department of the Asset Management Company, and decisions are made at meetings of the Investment Committee and board meetings of the Investment Corporation.

Management of procured funds

Plan and method of use

A plan for use is developed for each procurement plan.
Funds are allocated from the account of the Investment Corporation for the abovementioned uses of funds immediately after they are procured.

Tracing and management of procured funds

In principle, funds are allocated by the day immediately following the day when they are procured, except in cases where there is a long period of time between the date of procurement of funds and the due date for repayment, such as cases of investment corporation bonds. In these cases, we will make the period as short as possible and will trace and manage the procured funds to ensure that the funds are used for payment for the projects for which they are planned to be used.
Until the procured funds are allocated to the projects for which they are planned to be used, they will be accounted for as cash and cash equivalents (certificates of deposits, etc.).

How to handle the sale etc. of the project for which funds are planned to be used

In principle, procured funds are used for projects whose sale, etc. is not expected.
If the project, Green Qualified Assets, to which procured funds are allocated is sold or ceases to be Green Qualified Assets under the qualification criteria, the procurement is deemed to remain Green Finance in our fund management if the balance of Green Finance, including the funds procured through the green bonds or green loans, is within the Upper Limit of Green Finance Procurement calculated using the calculation logic below. The Green Qualified Assets are managed regularly until the due date for green loans (or the date for the redemption of green bonds).

Reporting system

Method and frequency of disclosure of information on the use of funds

In principle, funds are allocated by the day immediately following the day of procurement, and disclosure is not necessary.
However, funds that are not allocated for a long time and uses of funds in the past are disclosed to lenders (or investors) once a year.

Method and frequency of disclosure in impact reporting

Information is disclosed to lenders (or investors) at least once a year until the due date for the repayment of green loans (or the date for the redemption of green bonds).

KPIs in impact reporting

In accordance with the abovementioned method and frequency of disclosure, the following indicators are disclosed:
(i) A list of properties certified by a third-party certification body
(ii) Total energy consumption (electricity, gas) and greenhouse gas emissions or energy and emission intensities
(iii) The details of renovations selected under qualification criterion 2 and expected reduction rates (if funds procured through Green Finance are used for properties selected under qualification criterion 2)

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