Process of formulation

Step1

Considered a wide range of long-term social issues linked to Our business and activities.

We examined the long-term outlook, including global environmental and social issues, using international guidelines such as the GRI Standards, SASB Standards, and ISO 26000, as well as information from external consulting firms, to identify social issues that are highly relevant to our business.

Step2

Identified factors that are important to us and our stakeholders.

Based on the social issues identified in STEP 1, ESG Committee members and others identified important factors based on two criteria: importance to the company and importance to stakeholders.

Step3

Identified Materiality, set goals and KPIs

The results of STEP 1 and 2 are discussed by the ESG Committee (Chairman: President & CEO), and targets and KPIs are determined, and submitted to and reported by the Board of Directors.

Materiality

Materiality	Opportunities and Risks （ ● Opportunity　〇 Risk ）	Actions
Create and provide safe real estate financial products	Improve reputation and expand recognition of JINUSHI business Further expansion of the leased land market Decrease in purchases due to reduced willingness of tenants to open new stores and soaring land prices, etc. Decline in investor demand for JINUSHI REIT	Expand JINUSHI business Tenant business sector diversification, Expansion to more areas, Off-balance-sheet schemes for land Expansion of The JINUSHI CLUB (Real Estate Financial Product for Retail Investors) Growth of the JINUSHI Business Increase in institutional investors such as pension funds and life and non-life insurance companies Increased stability through expansion of asset size and portfolio diversification
Working with tenants to address environmental issues	Steadily promote JINUSHI business with low environmental impact Decrease in business sites due to river flooding caused by climate change and increase in landslides, etc. Decrease in tenants' ability to bear rents due to higher construction costs associated with environmental measures such as the installation of solar power generation equipment	Including ESG clause in land lease agreements with tenants Continue to be carbon neutral (JINUSHI emissions)
Be an adult	Hiring people who share our management philosophy and code of conduct Promoting excellent human resources regardless of age or gender and fostering an open and flat corporate culture Difficulty in hiring due to intensifying competition for human resources	Implementation of activities to disseminate management philosophy and code of conduct Conduct engagement survey Paying a wide range of expenses for acquiring qualifications to improve skills, etc. Establish a system that enables diverse work styles

Opportunities and Risks

（ ● Opportunity　〇 Risk ）

Actions

Create and provide safe real estate financial products

Improve reputation and expand recognition of JINUSHI business
Further expansion of the leased land market
Decrease in purchases due to reduced willingness of tenants to open new stores and soaring land prices, etc.
Decline in investor demand for JINUSHI REIT

Expand JINUSHI business
- Tenant business sector diversification, Expansion to more areas, Off-balance-sheet schemes for land
- Expansion of The JINUSHI CLUB (Real Estate Financial Product for Retail Investors)

Growth of the JINUSHI Business
- Increase in institutional investors such as pension funds and life and non-life insurance companies
- Increased stability through expansion of asset size and portfolio diversification

Working with tenants to address environmental issues

Steadily promote JINUSHI business with low environmental impact
Decrease in business sites due to river flooding caused by climate change and increase in landslides, etc.
Decrease in tenants' ability to bear rents due to higher construction costs associated with environmental measures such as the installation of solar power generation equipment

Including ESG clause in land lease agreements with tenants
Continue to be carbon neutral (JINUSHI emissions)

Be an adult

Hiring people who share our management philosophy and code of conduct
Promoting excellent human resources regardless of age or gender and fostering an open and flat corporate culture
Difficulty in hiring due to intensifying competition for human resources

Implementation of activities to disseminate management philosophy and code of conduct
Conduct engagement survey
Paying a wide range of expenses for acquiring qualifications to improve skills, etc.
Establish a system that enables diverse work styles

Indicators and Targets

	Targets (FY12/26)	Recent results (FY12/23)
Managed assets of JINUSHI REIT	300 billion yen	221.6 billion yen※1
Continued to achieve 100% incorporation of ESG clauses into land lease agreements with tenants.※2	100%	100%
CO2 emissions (JINUSHI emissions)	Continued to be carbon neutral	Achieved carbon neutralit※3
Sympathy for Management Philosophy	4 or more/5 points	4.06/5 points※4

※1. Figures after the 8th capital increase by JINUSHI REIT in January 2024.

※2. ESG clauses are incorporated into the template for lease land agreements and apply to contracts signed on or after June 9, 2022 (applicable only to our new development projects and domestic contracts).

※3. CO2 emissions (JINUSHI emissions) for the year ending December 31, 2022

※4. Score from an engagement survey conducted in December 2023 among employees of the JINUSHI group (excluding some subsidiaries) (response rate of 97.7%) (average of 3.56 points for other companies)