Materiality

Our Intent Behind Our Materiality Priorities

Ensuring Strong Governance — Strengthening Long-Term Trust

Through the reinforcement of compliance awareness and risk management systems, we align the direction of the entire organization, reduce the risk of misconduct and operational issues, and foster a sound and trustworthy corporate culture.
We prevent governance failures and organizational rigidity, enhance trust from society and investors, and establish a foundation for sustainable growth.
We ensure effective board oversight with a high level of independence, expertise, and diversity, and provide timely and appropriate information disclosure while promoting sound and flexible decision-making.

Addressing Climate Change — Achieving Cost Reduction and Enhanced Competitiveness

By promoting environmentally responsible operations—such as reducing GHG emissions, lowering water consumption, and advancing resource circularity—we will reduce property operating costs and deliver performance that exceeds the expectations of investors and tenants who prioritize environmental performance.
Furthermore, by mitigating disaster and regulatory risks and enhancing property value, we strengthen competitiveness and achieve property management that continues to be chosen by investors and tenants.

Human Capital Development and Well-being — Strengthening the Driving Force for Sustainable Growth

We will enhance productivity and strengthen business quality by developing professional talent and promoting health and well-being in the workplace.
By improving talent retention and fostering successors, we will build a sustainable, attractive corporate brand and a resilient earnings base.

Co-creation with Stakeholders — Enhancing Corporate Value through building trust

Through dialogue and collaboration with investors, tenants, local communities, and suppliers, we will improve efficiency and drive growth across the entire supply chain.
We will link these efforts to increased earnings and the acquisition of new investments, thereby sustainably enhancing corporate value (investor value).

Materiality

As a member of the Tokyu Fudosan Holdings Group (the “Group”), the Company recognizes the materiality established by the Group and identified its materiality by extracting significant medium- to long-term societal issues based on environmental efforts by each REIT. This materiality has been shared with each REIT.

SDGs strongly linked to our Materiality

Materiality	Action Items		Opportunities (Business opportunities expected by addressing materiality)	Risks （Impact of not addressing materiality）
Ensuring Strong Governance	Embedding Our Corporate Philosophy	Ensuring strong compliance	・Improving operational efficiency & decision-making quality	・Damage to credibility ・Going concern uncertainty ・Business suspension order
		Ensuring robust risk management	・Improving operational efficiency & decision-making quality
		Promoting board independence, expertise, and diversity	・Enhancing transparency & reliability	・Decision-making bias and inflexibility ・Governance failure
		Timely and appropriate disclosure	・Building stakeholder trust	・Reputation risk
Addressing Climate Change		GHG emissions reduction & management	・Climate risk mitigation ・Growing ESG investor capital	・Climate change & intensification of disasters ・Increased costs due to stricter regulatory compliance
		Energy consumption reduction & management	・Climate risk mitigation ・Growing ESG investor capital
		Environmental sustainability in properties	・Lower costs through advanced equipment ・Rising demand for high-performance properties	・Decline in competitiveness
Human Capital Development and Well-being		Developing and securing professional talent	・Securing a competitive edge	・Decline in operational quality
		Health management & employee engagement	・Boosting productivity	・Increase in resignations and employee leave ・Rising hiring costs
		Human rights & diversity promotion	・Fostering psychological safety	・Reputation risk ・Withdrawal from investment
Co-creation with Stakeholders		Deepening trust with investors	・Ensuring a stable investor base	・Decline in investment unit price
		Delivering value to tenants & facility users	・Securing Facility Competitiveness ・Renewals & rent uplift negotiation opportunities	・Rising vacancy rate
		Stronger partnerships with local communities	・Enhancing property & area value ・Enhancing corporate image	・Reputation risk
		Stronger partnerships with suppliers	・Cutting GHG emissions ・Boosting supply chain performance and efficiency	・Operational disruption ・Lower resilience to risks

We will address each materiality item in line with the asset management company’s management philosophy.

Sustainable Development Goals (SDGs)
The United National Sustainable Development Summit was held from 25 to 27 September 2015 at the United Nations headquarters in New York with participation by leaders from more than 150 member countries, and adopted the resolution, “Transforming our world: the 2030 Agenda for Sustainable Development.” At the same time, a declaration and goals were announced as an action plan for people, planet and prosperity. They were the Sustainable Development Goals (SDGs) comprising of 17 goals and 169 targets.

Identification process

Materiality was identified by select cross-divisional members of the Asset Management Company.

Awareness and organization of societal issues

In preparing discussions for Materiality, societal issues related to CRR and the Asset Management Company were extracted by referencing the Group Integrated Report; materiality; GRI Standards; relevant SDGs; ESG assessments for the real estate sector; and issues recognized by the industry association.

Integration and consolidation of issues

With respect to the above stated societal issues, a materiality short list was created after summarizing the tasks which CRR and the Asset Management Company has been working on, and discussing topics that should be given higher significance, with additional consideration to risks and opportunities regarding each issue.

Reflection of opinions from officers and employees

All officers and employees were asked to offer opinions as stakeholders of the Asset Management Company, and preliminary interview was conducted with executive officers and supervising directors of CRR.

Identification of materiality

Based on the interview results, significance of each issue to be addressed by CRR and the Asset Management Company was reviewed for appropriateness.
Materiality was identified by the Sustainability Promotion Council and reported to the board of directors of the Asset Management Company and CRR.