Sustainability Finance
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- Sustainability Finance
Overview
Sustainability 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 with which the Investment Corporation entrusts the management of its assets, has established a policy for sustainability and will facilitate its implementation. The Asset Management Company has recently decided to formulate the Sustainability Finance Framework to realize this philosophy and these objectives, and to in turn use them to enhance financing methods and the development of sustainability finance, etc. through the expansion of the base of investors with a strong interest in ESG investment.
Use of funds
The Investment Corporation will appropriate the full amount of funds to be raised by Green bond, Green loan (including Green derivatives, the Interest rate derivatives accompanying to the said loan), Sustainability bond or Sustainability loan (including Sustainability derivatives, the Interest rate derivatives accompanying to the said loan) for funds to acquire Green Qualified Assets or Sustainability Qualified Assets, or funds to refinance borrowings, to repay borrowings or to redeem the investment corporation bonds already issued, which were appropriated to acquire Green Qualified Assets or Sustainability Qualified Assets.
Green Qualification criteria 1 Sustainability Qualification criteria 1 |
Any of the effective certifications listed in a through e below has already been or will be acquired.
|
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Green Qualification criteria 2 | Repair work of equipment, etc. that aim for effective environmental improvement in terms of energy efficiency and water consumption, etc. at real estate operated |
Sustainability Qualification criteria 2* | Social Projects that contribute to either (1) or (2) below. (1) Socioeconomic improvement and empowerment (2) Access to essential services |
Criteria to determine adherence to qualification criteria
Criteria for selection
The Finance and Planning Department of the Asset Management Company assesses and examines whether properties for which funds procured through Sustainability Finance or Green Finance are used meet the qualification criteria.
Process
Proposals for sustainability projects or green projects, for which funds procured through Sustainability Finance or 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.
Status of fund procurement and acquisition of third-party certification
Amount of procured funds and allocation
Funds | Date of procurement | Date of repayment/ redemption | Allocation | Use of initial funds | ||
---|---|---|---|---|---|---|
Green loan | (1) | ¥3.3bn | Oct. 21, 2019 | Oct. 20, 2022 | Allocated | Acquisition of AEON MALL Kofu Showa (existing building) Acquisition of AEON MALL Kagoshima |
(2) | ¥5.3bn | Oct. 20, 2023 | Oct. 21, 2030 | Allocated | Acquisition of AEON MALL Wakayama | |
(3) | ¥4.0bn | Oct. 20, 2023 | Oct. 20, 2031 | Allocated | Acquisition of AEON MALL Wakayama | |
Total | ¥12.6bn | |||||
Green bond | (1) | ¥12.0bn | Dec. 6, 2019 | Dec. 6, 2029 | Allocated | Acquisition of AEON MALL Kofu Showa (existing building) Acquisition of AEON MALL Kagoshima |
Total | ¥12.0bn | |||||
Green Finance | Total | ¥24.6bn | ||||
Sustainability loan (including Sustainability Derivatives) |
(1) | ¥5.1bn | Mar. 22, 2022 | Oct. 22, 2039 | Allocated | Acquisition of AEON MALL Shinkomatsu |
Total | ¥5.1bn | |||||
Sustainability bond | (1) | ¥18.0bn | Dec. 4, 2020 | Dec. 4, 2030 | Allocated | Acquisition of AEON MALL Mitouchihara Acquisition of AEON MALL Ishinomaki |
Total | ¥18.0bn | |||||
Sustainability Finance | Total | ¥23.1bn | ||||
- | Grand total | ¥47.7bn |
Upper limit of Procurement
Item | Number of properties | Latest fiscal year | |
---|---|---|---|
Total properties | 49 | 468.3bn | |
Sustainability Qualified Asset | 36 | 404.5bn | |
Green Qualified Asset | 36 | 404.5bn | |
DBJ Green Building | 31 | 341.7bn | |
CASBEE | 4 | 53.0bn | |
Building-Housing Energy-efficiency Labelling System (BELS) Certification | 1 | 9.8bn | |
Sustainability Finance Upper Limit of Procurement | ー | 181.2bn | |
Green Finance Upper Limit of Procurement | ー | 181.2bn |
List of properties certified by third-party certification body
https://www.aeon-jreit.co.jp/en/sustainability/external.html
Renovations selected in Green qualification criteria 2 and expected reduction rate
No funds have been procured for properties that meet Green qualification criterion 2.
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.).
Handling method when projects applicable for fuds are sold
In principle, procured funds are used for project that is not assumed to be sold or etc.
If the Sustainability Qualified Asset or the Green Qualified Asset of the project, to which procured funds are allocated is sold or ceases to be Sustainability Qualified Asset or Green Qualified Asset under the qualification criteria, the procurement is deemed to remain Sustainability Finance or Green Finance in our fund management, if the balance of Sustainability Finance or Green Finance, is within the Upper Limit of Sustainability Finance Procurement or Green Finance Procurement calculated using the calculation logic below. The Sustainability Qualified Assets or the Green Qualified Assets are managed regularly until the due date for the related loans (or the date for the redemption of the related bonds).
Reporting
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
- The Investment Corporation will make disclosure to the lenders (or the investors) at least once a year until the repayment date of green loans (or the redemption date of green bonds) or the repayment date of sustainability loans (or the redemption date of sustainability bonds) arrives.
- The disclosure of sustainability finance is also used as a substitute for the disclosure of green finance.
KPIs in impact reporting
In accordance with the abovementioned method and frequency of disclosure, the following indicators are disclosed;
- a.List of properties certified by a third-party certification organization
- b.Consumption, etc. of the items below
-Energy consumption (electricity, gas)
-Greenhouse gas emissions - c.Contents of construction work of projects selected based on the Green Qualification criteria 2 (green projects) and their assumed reduction rate
- d.Social projects which properties for the initial use of funds fall into based on the Sustainability Qualification criteria 2
- e.Total number of employees in properties subject to finance(in case of (1)(a) of Sustainability Qualification criteria 2)
- f.Of properties subject to finance, the percentage of facilities that conclude a disaster prevention agreement with a local government(in case of (2)(b) of Sustainability Qualification criteria 2)
- g.Of properties subject to finance, the total number of tenants with a childcare facility or medical or public function(in case of (2)(c),(d) of Sustainability Qualification criteria 2)
- h.Of properties subject to finance, the percentage of facilities that support barrier-free and gender-free(in case of (2)(e) of Sustainability Qualification crieria 2)
Impact reporting
- a.List of properties certified by a third-party certification organization
https://www.aeon-jreit.co.jp/en/sustainability/external.html - b.Consumption, etc. of the items below
-Energy consumption (electricity, gas)
-Greenhouse gas emissions
Qualified Assets | ||||||
---|---|---|---|---|---|---|
Electricity (kWh and kWh/m2) |
Gas (m3and m3/m2) |
Greenhouse gas (t-CO2and t-CO2/m2) |
||||
FY 2020 | Number of properties | 30 | total amount | 444,279,367 | 1,625,302 | 191,931 |
percentage | 73.1% | intensity | 147 | 0.5 | 0.0634 | |
FY 2021 | Number of properties | 33 | total amount | 487,399,867 | 1,836,834 | 213,054 |
percentage | 73.3% | intensity | 145 | 0.5 | 0.0635 | |
FY 2022 | Number of properties | 33 | total amount | 492,528,415 | 1,844,195 | 212,102 |
percentage | 70.2% | intensity | 147 | 0.5 | 0.0632 |
Nonqualified Assets | ||||||
---|---|---|---|---|---|---|
Electricity (kWh and kWh/m2) |
Gas (m3 and m3/m2) |
Greenhouse gas (t-CO2 and t-CO2/m2) |
||||
FY 2020 | Number of properties | 11 | total amount | 96,207,047 | 2,789,791 | 47,564 |
percentage | 26.9% | intensity | 182 | 5.3 | 0.0902 | |
FY 2021 | Number of properties | 12 | total amount | 106,296,637 | 2,774,993 | 51,268 |
percentage | 26.7% | intensity | 178 | 4.7 | 0.0860 | |
FY 2022 | Number of properties | 14 | total amount | 106,182,204 | 2,329,673 | 48,857 |
percentage | 29.8% | intensity | 136 | 3.0 | 0.0625 |
- c.Contents of construction work of projects selected based on the Green Qualification criteria 2 (green projects) and their assumed reduction rate
Not aplicable - d.Social projects which properties for the initial use of funds fall into based on the Sustainability Qualification criteria 2
Properties subject for the finance | Social project applicable for the finance |
---|---|
AEON MALL Ishinomaki | (1) (a)Facilities that are sufficiently creating local employment
(2) (b)Facilities that are able to supply necessary resources and evacuation space at the time of disaster by concluding a disaster prevention agreement with a local government |
AEON MALL Mitouchihara | (1) (a)Facilities that are sufficiently creating local employment
(2) (b)Facilities that are able to supply necessary resources and evacuation space at the time of disaster by concluding a disaster prevention agreement with a local government |
AEON MALL Shinkomatsu | (1) (a)Facilities that are sufficiently creating local employment
(2) (b)Facilities that are able to supply necessary resources and evacuation space at the time of disaster by concluding a disaster prevention agreement with a local government |
- e.Total number of employees in properties subject to finance(in case of (1)(a) of Sustainability Qualification criteria 2)
Applicable properties | Total number of employees |
---|---|
AEON MALL Ishinomaki | approx. 1,480 |
AEON MALL Mitouchihara | approx. 3,500 |
AEON MALL Shinkomatsu | approx. 2,550 |
- f.Of properties subject to finance, the percentage of facilities that conclude a disaster prevention agreement with a local government(in case of (2)(b) of Sustainability Qualification criteria 2)
The point in time | Percentage |
---|---|
As of the end of October 2023 | 100% |
- g.Of properties subject to finance, the total number of tenants with a childcare facility or medical or public function(in case of (2)(c),(d) of Sustainability Qualification criteria 2)
Not applicable
- h.Of properties subject to finance, the percentage of facilities that support barrier-free and gender-free(in case of (2)(e) of Sustainability Qualification criteria 2)
Not applicable