Initiatives for Sustainability

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Green Bond

KDO has positioned sustainability improvement initiatives aimed at realizing a sustainable society as an important business management issue to fulfill its corporate social responsibility, and promoted efforts on the green bonds from the thought that the issuance of investment corporation bonds as green bonds enables more committed efforts to improve sustainability and further contribution to development of the domestic green bond market by offering opportunities to the universe of investors who take active stance towards ESG investment.

What is Green Bond?

Bonds issued by companies, local governments, or other organizations to raise funds for domestic and overseas green projects, which is a project contributing to environmental solution, are called green bonds. As main characteristics of green bonds, proceeds are allocated exclusively to green projects, and are tracked and managed in a reliable manner, ensuring transparency by reporting after the issuance of the bonds.

Green Bond Framework

KDO has established “the Green Bond Framework”, which specifies a basic policy on green bonds as follows and shall issue green bonds according to that.

1. Use of Proceeds
Use of net proceeds from green bonds is limited to finance the acquisition of assets that meet Eligibility Criteria 1 stated below, the repayment of borrowings, and the redemption of investment corporation bonds, and construction and/or facility refurbishments for energy saving that meet Eligibility Criteria 2.

2. Project Evaluation and Selection Process
When selecting a green project to be allocated as a green project (“Eligible Green Projects”), a Sustainability Committee meeting at Kenedix Real Estate Fund Management, Inc. (“KFM”) is convened to assess candidate projects and examine the alignment of the use of proceeds with Eligibility Criteria and decide the selection.
In addition, the prospect of the allocation of net proceeds after allocating proceeds to Eligible Green Projects, etc. is also examined there. The details of deliberations and examinations by the Sustainability Committee are reported to KDO’s Board of Directors and KFM’s Asset Management Committee.

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3. Management of Proceeds
KDO properly implements an internal management system of net proceeds and unallocated proceeds. In the presence of unallocated proceeds, the proceeds are separately recorded in internal control on transfer of funds and maintained in cash and cash equivalents pending full allocation of net proceeds.

4. Reporting
・Allocation Reporting (Balance of Green Bonds and Allocation Status of Proceeds)
KDO annually discloses a confirmation that its balance of green bonds does not exceed the Issuable Amount of Green Bonds, which is equal to the aggregate amount of acquisition price of Eligible Green Assets and expenditures for the construction and/or refurbishments of properties under management that meet Eligibility Criteria 2, until the proceeds have been fully allocated to Projects that meet Eligibility Criteria 1 and/or 2, or throughout the life of green bond.

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・Impact Reporting (Reporting on Energy Consumption, etc. Indicators)
KDO discloses the following indicators throughout the life of the green bond.

- Number of Eligible Green Assets and certifications, aggregate amount of total floor area of Eligible Green Assets
- Energy consumption, etc. of Eligible Green Assets (where KDO has energy control authority) and properties that implemented construction or facility refurbishments contributing to positive environmental benefits that meet Eligibility Criteria 2.


KDO acquires an external review for management of proceeds and reporting.

Third-party evaluation of the Green Bond Framework

Reporting based on Green Bond Framework

Allocation Reporting (Balance of Green Bonds and Allocation Status of Proceeds)

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Note: It is the total amount of tenth and twelfth Series Unsecured Investment Corporation Bonds.
For outlines of the each bond, please refer to “Issue Status of Green Bonds”.

Impact Reporting (Reporting on Energy Consumption, etc. Indicators)

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Issue Status of Green Bonds

Name Tenth Series Unsecured Investment Corporation Bonds
Issue amount 2.0 billion yen
Issue date February 15, 2019
Redemption date February 15, 2024
Interest rate 0.390% per annum
Use of proceeds Repayment of borrowigs for acquisition of KDX Kobayashi-Doshomachi Building (1.5 billion yen) on February 28, 2019
Repayment of borrowigs for acquisition of KDX Toranomon 1chome Building (0.5 billion yen) on March 31, 2019
External evaluation
upon issuance
PDF  Japan Credit Rating Agency, Ltd. (JCR), Green Bond Evaluation “Green 1”
Annual external evaluation PDF  Japan Credit Rating Agency, Ltd. (JCR), Green Bond Evaluation “Green 1”
Name Twelfth Series Unsecured Investment Corporation Bonds
Issue amount 1.0 billion yen
Issue date October 20, 2020
Redemption date October 18, 2030
Interest rate 0.610% per annum
Use of proceeds Repayment of borrowigs for acquisition of KDX Musashi-Kosugi Building (1.0 billion yen) on October 30, 2020