Samty Residential aim to further promote sustainability initiatives and contribute to the realization of a sustainable environment and society through financing investments that contribute to solving environmental issues (green finance), as well as to strengthen its financing base by expanding a base of investors who are interested in ESG investment.
Green Finance Framework
Green Finance Framework has been established for the implementation of green finance, including the issuance of green bonds.
Use of Procured Funds
The funds procured through green finance (the “Procured Funds”) will be used to acquire assets that meet the green eligibility criteria listed in ➀ below (“Green Buildings”), conduct renovation work, etc. that meets the green eligibility criteria listed in ② below (“Renovation Work, etc."), or refinancing of borrowings or investment corporation bonds required for such acquisition or renovation ("Refinancing of Borrowings, etc.").
Green Eligibility Criteria
① Green Buildings
Buildings that have acquired or are scheduled to acquire any of the following environmental certifications by the respective third-party certification bodies (i) through (iii), that are valid as of the payment date of green bonds or as of the drawdown date of green loans
(i) DBJ Green Building Certification: 3 Stars, 4 Stars or 5 Stars
(ii) CASBEE Evaluation Certification: Rank S, Rank A, or Rank B+
(iii) BELS Certification: 3 Stars, 4 Stars or 5 Stars
② Renovation Work, Etc.
Renovation Work, etc. that fulfills any of the following conditions (i) through (iii)
(i) Renovation work intended to improve the number of stars or ranks by one or more for any of the certifications listed in ➀ in the green eligibility criteria
(ii) Renovation work with the potential of reducing either energy use or greenhouse gas emissions by 30% or more
(iii) Installation or acquisition of equipment related to renewable energy
Evaluation and Selection Process of Projects
The Sustainability Promotion Office of the Asset Management Company will verify and evaluate the compliance with the green eligibility criteria for the projects for which the Procured Funds will be used, in accordance with the Sustainability Policy and the rules on the Sustainability Promotion System. Based on such verification and evaluation, the Asset Management Company’s Board of Directors and other appropriate bodies will resolve to implement green finance pursuant to the Asset Management Company’s internal rules.
Management of Procured Funds
The Procured Funds will be allocated promptly after the Asset Management Company confirms that they are linked to the acquisition of a Green Building, conducting of Renovation Work, etc., or Refinancing of Borrowings, etc. required for such.
Any unallocated Procured Funds will be managed by the Asset Management Company in cash or cash equivalents. In the event that, even after full allocation, the asset for which the funds were intended to be used becomes no longer the subject of the funds due to sale, damage, etc. before the redemption of the subject investment corporation bonds or repayment of the borrowings, the temporary unallocated funds will be managed through portfolio management(Note).
(Note) “Portfolio management” is a management method to ensure that the total amount of green finance outstanding does not exceed the upper limit amount of green eligible debt (total acquisition price of Green Buildings x total-asset based LTV (as of the end of the fiscal period) + the total amount allocated for Renovation Work, etc.) for each fiscal period.
Reporting
① Reporting of Funds Allocation Status
(*) For details of green bonds, please see “Corporate Bonds” page.
② Reporting on Environmental Improvement Effects, Etc.
As long as there is an outstanding green finance balance, and to the extent reasonably practicable, Samty Residential will disclose on its website on an annual basis environmental improvement effects for the following.
(i) Green Building Reporting
(*) For details of Green Buildings, please see “External Evaluation and Certifications” page.
(*) For details of Sustainability Performance, please see “Environmental” page.
(ii) Reporting on Renovation Work, Etc.
There are no renovation works that meets Eligibility Criteria②.
Assessment by External Institutions
In a third-party assessment of the Framework, Samty Residential obtained a Green 1 (F) rating, the highest rating in the JCR Green Finance Framework Evaluation from Japan Credit Rating Agency, Ltd. (JCR). Please refer to the following website for details regarding the JCR Green Finance Framework Evaluation.
JCR Green Finance Framework Evaluation: https://www.jcr.co.jp/en/greenfinance/green/
