Initiatives for Sustainability

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Basic Policies / Promotion System

KDO and Kenedix Real Estate Fund Management, Inc. (KFM), the asset management company for KDO, have positioned initiatives on ESG (Environmental, Social and Governance) awareness as an important business management issue and KFM has established the following Sustainability Policies to promote initiatives on ESG.
Under Sustainability Policies, KDO and KFM are aiming to contribute to sustainable environment through their business activities. We make positive contribution to sustainability by reducing the negative impact to the environment through continuously reducing energy and water consumption, GHG emission and waste; and by eliminating and managing of hazardous materials to carry out the social mission of improving the environmental performance of properties we manage.
KDO and KFM have established the following environmental policies and had environment-friendly investment management operations in accordance with the policies.
In addition, Kenedix, Inc., the parent company of KFM, became a signatory to the “Principles for Responsible Investment (PRI)” supported by the United Nations. KDO and KFM share Kenedix Groupʼs philosophy, promote sustainability initiatives and aim for compatibility between sustainable growth and social responsibility under the commitment to responsible investment.

Sustainability Policies

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Environmental Policies

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Promotion System of Sustainability, etc.

Sustainability Committee

The initiatives for sustainability are promoted under the leadership of the Sustainability Committee established in KFM.
The Sustainability Committee gathers, analyzes, and examines the policies and targets, activity plans and various initiatives, matters related to risk management, and other important matters related to sustainability or ESG for KDO and KFM, and shares them with related parties, with the aim of promoting initiatives for sustainability and ESG-related matters. The committee meets in principle, every 3 months, and the content reviewed is also reported to KFM’s Board of Directors with an independent external member, and to KDO’s Board of Directors with independent supervisory directors.
The Sustainability Committee is composed of the president & CEO (Chief Sustainability Officer), who is the chairperson of the Sustainability Committee, and as members, the committee is composed of full-time directors, the Head of Strategic Planning Department, the General Managers of Strategic Planning Department, who are in charge of each REIT division, the Head of Sustainability Office, the Head of Strategic Planning and the Head of Asset Management Division, who are in charge of each REIT division, and the Head of Finance & Accounting Division.
In addition, the Head of Sustainability Office also serves as the Public Relations and Sustainability Department of Kenedix, Inc., the parent company of KFM. Under the unified policy of the entire Kenedix Group, a system has been established to promote initiatives related to sustainability and ESG across the board.

Energy Conservation Measures Committee

Energy Conservation Measures Committee considers policies, targets, approaches on energy conservation and monitoring of the progress, and especially takes care of initiatives to reduce energy consumption among sustainability issues. It is held regularly and is comprised by the Head of Asset Management Division, Office REIT Department as the chairperson of the Committee, and as members, the Director & COO, Head of Office REIT Department, the Head of Asset Investment Division and the Head of Strategic Planning Division. Additionally, a third party expert attends the Committee as an observer to advise and cooperate in promoting measures.

Signing on to the Principles for Responsible Investment (PRI) by the Sponsor

Kenedix, Inc., the parent company of KFM, became a signatory to the Principles for Responsible Investment (“PRI”) supported by the United Nations.
PRI is a set of principles established for the financial industry in 2006 under the leadership of the United Nations Secretary-General of the time, Kofi Annan. PRI encourages the incorporation of ESG issues (Environment, Social and Governance) into investment decision-making processes, with the aim to help companies enhance long-term investment performance and better fulfill their fiduciary duty. Kenedix Group promote sustainability initiatives together and aim for reinforcing its management base toward compatibility between sustainable growth and social responsibility under the commitment to responsible investment.

Expressed support for the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”) by the Asset Management Company

Kenedix Real Estate Fund Management, Inc., the asset management company for the Investment Corporation (“the Asset Management Company”) expressed support for the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”) and also joined the TCFD consortium, a group of domestic companies that support TCFD recommendations.
TCFD is an international initiative established by the Financial Stability Board (“FSB”) at the request of the G20 for the purpose of discussing the disclosures of climate-related financial information and the responses by financial institutions. TCFD publishes recommendations for companies to disclose their governance, strategy, risk management, and metrics and targets for climate-related risk and opportunities. Also, TCFD Consortium is a group of companies and financial institutions that support the TCFD recommendations. The consortium was established with a view to further discussion on effective corporate disclosures of climate-related information and initiatives to link disclosed information to appropriate investment decisions on the part of financial institutions and other organizations.
The Investment Corporation and the Asset Management Company will work to expand information disclosure based on TCFD and continue to actively promote ESG (Environment, Social and Governance) initiatives based on “Sustainability Policies” established by the Asset Management Company.

Signing on to the Principles for Financial Action for the 21st Century by the Asset Management Company

The Asset Management Company became a signatory to the Principles for Financial Action towards a Sustainable Society (Principles for Financial Action for the 21st Century (“the PFA21”)). The PFA21 has been established by drafting committee with participation of various financial institutions in October 2011 as the action guidelines of financial institutions who seek to fulfill their responsibilities and roles required for the formation of a sustainable society. Signing financial institutions will implement initiatives based on the seven principles below as much as possible based on their own businesses. It has been positioned as a starting point to collaborate without being restricted by business categories, scale or region. The Asset Management Company is ambitious to become a real estate asset management company that commits to responsible investment management through the practice of the PFA21.

Material issues of the Kenedix Group

Kenedix, Inc., the parent company of KFM has established material issues in order to identify subjects that are critical for achieving sustained growth of the Kenedix Group along with stakeholders and society. We will make commitment to find solutions to these issues both in business and society by making the initiatives associated with each issue. Furthermore, we intend to contribute to achieving the SDGs by carrying measures for our materiality.

Key areas and applicable SDGs Material issues
Contribution to a sustainable environment

Reduction of energy consumption and GHG emissions
Reduction of water consumption and waste materials
Collaboration with tenants for environmental initiatives
Commitment to a diverse society

Providing properties with environmental and social considerations
Improving resilience/climate adaptation
Initiatives for an aging society
Stakeholder engagement

Continuous improvement of customer satisfaction
Community engagement
Managing conflicts of interests
Attractive working environment

Recruiting, employee retention and career advancement
Health and wellbeing of employees
Diversity and equal opportunities
Responsible organization

Compliance
Risk management
Commitment to responsible investments