TSE:8985
  1. Home
  2. ESG
  3. Initiatives for Environment

Initiatives for Environment

In response to effective usage of limited resources and aggravation of climate change issue, JHR and JHRA work on monitoring environmental performance, such as energy consumption, CO2 emissions, water consumption and amount of waste generated, etc. and strive to improve them continuously.

We have set targets to reduce GHG emissions intensity (*1) for long term until 2050.

(*1) The GHG emissions of JHR fall under Scope 3 emissions, Category 13: leased assets (downstream) because the hotels in our portfolio are managed by lessees of hotels, etc.
(*2) The GHG emissions intensity for the baseline year, FY2017 (April 2017 – March 2018) was 0.135 (t-CO2/m2).

Environmental Performance data of HMJ Group Hotels as of the end of each fiscal year is as follows.

Unit April 2018
to March 2019
April 2019
to March 2020
April 2020
to March 2021
April 2021
to March 2022
Number of properties 13 14 14 16
Total floor area 372,607.95 437,515.71 437,515.71 463,368.64
Energy Usage MWh 139,056 163,812 110,837 129,780
Emissions intensity MWh/㎡ 0.3732 0.3744 0.2533 0.2801
CO2 Emissions tCO2 47,633 51,547 36,187 41,219
Emissions intensity tCO2/㎡ 0.1278 0.1178 0.0827 0.0890
Water Usage thousand ㎥ 1,476 1,509 770 877
Emissions intensity thousand ㎥/㎥ 0.0040 0.0034 0.0018 0.0019
Waste Emissions t 3,458 4,879 2,898 2,825
Emissions intensity t/㎡ 0.0093 0.0112 0.0066 0.0061
Recycled Amount t 876 1,689 1,125 1,035
Recycle Ratio % 25% 35% 39% 37%
(*1) Stating numbers for hotels leased to Hotel Management Japan Co., Ltd. and its subsidiaries (hereinafter called "HMJ Group Hotels") owned by JHR at end of each period.
(*2) Amount of CO2 emissions are calculated based on "Institution of calculation, reporting and disclosure of amount of emissions by greenhouse effect gas" established by Ministry of the Environment.
(*3) Numbers may change due to revision of aggregation method.

●Switching to LED Lighting

We are striving to reduce electricity consumption by switching from conventional lighting to LED lighting at some of the hotels in our portfolio.

●Introduction of water-saving devices

We strive to reduce water consumption through installing water-saving devices for a restroom, a tap in the kitchen, etc. to adjust water use amount properly.

●Renewal of air conditioners

We reduce electricity consumption by installing inverter control devices on air conditioners for better operational efficiency.

●Reuse of water

Several of our hotels reduce clean water consumption by using well water instead. Some of our hotels in Okinawa are working on to reduce clean water consumption by reusing gray water as recycled water.

●Green Leases

In order to promote environmentally friendly initiatives in our portfolio, we have signed green leases provisions such as providing energy data with the lessees of HMJ Group hotels, which is one of our major hotel groups. JHR analyzes data of energy, etc. provided by hotels and considers renovation to improve environmental performance and works to optimize operation of facilities management. In case of HMJ Group hotels, they can reduce utility expenses through improvement of environmental performance.

Achievement of green lease provision (end of FY2022)

No. of Properties Proportion of Total Floor Area
16 60.5%

●Green Building Certifications by third party institutions

In order to confirm the credibility and objectivity of our initiatives aimed at reducing our environmental impact, we have obtained green building certifications from third party institutions.

Achievement of certification from third party institutions

Fiscal Year FY2019 FY2020 FY2021 FY2022
No. of properties newly
acquired certifications
1 1
Cumulative ratio in portfolio
(based on total floor area)
6.3% 14.7% 17.2% 17.2%

■CASBEE Certification for Buildings

"Comprehensive Assessment System for Built Environment Efficiency (CASBEE)" is a method for evaluating and rating the environmental performance of buildings. It is a system to comprehensively evaluate the quality of buildings, including interior comfort and landscape considerations, as well as environmental considerations such as energy conservation and the use of materials and equipment with low environmental loads.
CASBEE for Buildings (Existing Buildings) is an evaluation method which targets buildings with an operational record of at least one year after completion, and assesses buildings based on annual performance of operations, deterioration of buildings and interior environments. Assessment results by CASBEE are indicated in a scale with the following five ranks: "S: Superior," "A: Very Good," "B+: Good," "B-: Slightly Poor," and "C: Poor."

See here for details of CASBEE
http://www.ibec.or.jp/CASBEE/english/index.htm

Oriental Hotel Fukuoka Hakata Station
Oriental Hotel Fukuoka Hakata Station

THIS TABLE CAN SCROLL TO THE LEFT OR RIGHT.

Location 4-23, Hakataeki Chuogai, Hakata-ku, Fukuoka-shi, Fukuoka CASBEE認証

CASBEE for Buildings
(Existing Buildings) Rank B+ (Good)

Acreage 2,163.42 sqm
Total Floor Space 18,105.42 sqm
Structures and Stories SRC/12 stories above ground with 3 stories below ground
Building Completion Jul. 1985
Details of Properties
Hilton Tokyo Odaiba
Hilton Tokyo Odaiba

THIS TABLE CAN SCROLL TO THE LEFT OR RIGHT.

Location 1-9-1, Daiba, Minato-ku, Tokyo CASBEE認証

CASBEE for Buildings
(Existing Buildings) Rank B+ (Good)

Acreage 18,825.30 sqm
Total Floor Space 64,907.76 sqm
Structures and Stories S/SRC with flat roof, 14 stories above ground and 1 story below ground
Building Completion Jan. 1996
Details of Properties

■BELS (Building-Housing Energy-efficiency Labeling System) Evaluation

"BELS" is a public valuation and display system under a guideline by the Ministry of Land, Infrastructure, Transport and Tourism to evaluate the energy conservation performance of each building, which was launched in April, 2014. A third party institution verifies the energy performance of a building by evaluating its primary energy consumption and labels the performance of both new and existing buildings. The evaluation result is graded on five scales based on energy performance (from one star "★" to five stars "★★★★★.")

See here for details of BELS (Japanese only)
https://www.hyoukakyoukai.or.jp/bels/info.html

Hotel Nikko Alivila
Hotel Nikko Alivila

THIS TABLE CAN SCROLL TO THE LEFT OR RIGHT.

Location Nakagami-gun Okinawa BELS認証

Evaluation Agent:
JAPAN ERI CO.,LTD.

Acreage 65,850.05 ㎡
Total Floor Space 38,024.98 ㎡
Structures and Stories SRC/10 stories above ground with 1 story below ground
Building Completion Apr. 1994
Details of Properties
Mercure Okinawa Naha
Mercure Okinawa Naha

THIS TABLE CAN SCROLL TO THE LEFT OR RIGHT.

Location Naha city Okinawa BELS認証

Evaluation Agent:
JAPAN ERI CO.,LTD.

Acreage 2,860.69 ㎡
Total Floor Space 10,884.25 ㎡
Structures and Stories RC/14 stories above ground
Building Completion Aug. 2009
Details of Properties
UAN kanazawa
UAN kanazawa

THIS TABLE CAN SCROLL TO THE LEFT OR RIGHT.

Location Kanazawa city, Ishikawa BELS

Evaluation Agent:
Center for Better Living

Acreage 729.91 ㎡
Total Floor Space 2,606.85 ㎡
Structures and Stories S with flat roof, 6 stories above ground
Building Completion Sep. 2017
Details of Properties

●Investing in Mixed-Use Buildings

We are investing in mixed-use facilities that fall within the scope of our asset management, as stipulated in the Articles of Incorporation.

Active Intercity Hiroshima (Sheraton Grand Hotel Hiroshima)
ACTIVE-INTER CITY HIROSHIMA
(Sheraton Grand Hiroshima Hotel)

High-rise hotel and office tower within ACTIVE-INTER CITY HIROSHIMA, a mixed-use facility comprised of hotels, offices, and commercial facilities located next to JR Hiroshima Station.

Mercure Yokosuka
Mercure Yokosuka

High-rise hotel within Bay Square Yokosuka Ichibankan in Yokosuka City. Bay Square Yokosuka Ichibankan is a landmark mixed-used facility consist of hotel, Yokosuka Arts Theatre, Yokosuka Industrial Community Plaza, etc.

●Investing in Urban Redevelopment

We are investing in urban redevelopment projects.

Oriental Hotel Fukuoka Hakata Station
Oriental Hotel Fukuoka Hakata Station

Hotel located next to the JR Hakata Station Chikushi Exit rotary and connected to the Hakata Station subway station via an underground passage. In the vicinity of Hakata Station, a station-front plaza redevelopment project is under way, for which we carried out renovation work including for a corridor extending from the underground passage to the aboveground entrance/exit.

Our (JHR) awareness of climate change

In 1992, "United Nations Framework Convention on Climate Change (hereinafter called "Convention")," with the ultimate goal of stabilizing the concentration of greenhouse gases in the atmosphere was adopted, and it was agreed to take action against climate change worldwide. Based on the Convention, the Conference of the Parties to the United Nations Framework Convention on Climate Change (hereinafter called "COP"), was held every year since 1995. At COP 21 in 2015, all 196 countries, including developed and developing countries, which are members of the Convention, adopted the "Paris Agreement", which sets a common reduction target (strive to limit global warming to well below 2℃ and make additional effort to limit it to 1.5℃). As a result, recognition and initiatives of tasks for climate change became more concrete.
Japan has also been actively working on climate change issues and announced in 2020 that Japan will reduce greenhouse gas emissions to virtually zero by 2050 (hereinafter called "Carbon Neutral Declaration") based on the Paris Agreement. Carbon neutrality is also positioned as a basic principle in "Act on Promotion of Global Warming Countermeasures," and it is expected to accelerate decarbonization initiatives, investments, and innovation as well as to further promote decarbonization initiatives utilizing renewable energy in local areas and decarbonization management by companies.
JHR believes that the climate change action, which are being discussed as a global initiative, are not restrictions on economic growth but are key to generate a major shift in industrial structure and strong growth through drastically transforming the economy and society, encouraging investment and improving productivity. Therefore, JHR recognizes that properly identifying, assessing, and managing the "risks" and "opportunities" caused by climate change is essential to enhancing business resilience and ensuring our sustainability, and has positioned action to climate change as one of our materialities (key issues).

Expression of Support for the TCFD recommendations by the Asset Management Company

TCFD is the "Task Force on Climate-related Financial Disclosures" established by the Financial Stability Board (FSB) in 2015 to encourage companies to disclose appropriate information and to encourage investors and others to make appropriate investment decisions, and recommended disclosure themes within the framework in its final report in 2017.
Based on the recognition that "climate change will cause dramatic changes in the natural environment and social structure and is important issue that will have a significant impact on the management of investment corporations," JHRA, which is asset management company of JHR, judged that it is important to promote disclosure based on the TCFD recommendations and expressed its support for the TCFD recommendations in November 2021.
At the same time, JHRA joined the TCFD Consortium, an organization of Japanese companies that support the TCFD recommendations.
Through the activities of the TCFD Consortium, JHRA promotes the study of effective information disclosure and initiatives to link the disclosed information to appropriate investment decisions by financial institutions, etc., while striving to expand appropriate information disclosure of JHR.

<Disclosure framework of TCFD>

Recommended disclosure themes Governance Strategy Risk management Metrics and Targets
Description
(Summary)
The organization's governance around climate-related risks and opportunities The actual and potential impacts of climate-related risks and opportunities on the organization's businesses, strategy, and financial planning The processes used by the organization to identify, assess, and manage climate-related risks The metrics and targets used to assess and manage relevant climate-related risks and opportunities

Initiatives for Four Disclosure themes recommended by TCFD

Governance

JHR has established the following governance structure to address climate-related risks and opportunities.

For an overview of the responsible persons and the ESG Promotion Committee above, please refer to "Sustainability Promotion System" within ESG Initiatives.

Strategy

In order to examine the impact of climate-related risks and opportunities on the JHR's business, strategy and financial plan, we conducted scenario analysis using the 4℃ and 1.5℃ scenarios. In the scenario analysis, we refer to the Fifth Assessment Report published by the IPCC (Intergovernmental Panel on Climate Change of the United Nations) and World Energy Outlook 2020 published by the IEA (International Energy Agency) to analyze the impact on JHR's business by measures such as Japanese government's "Carbon Neutral Declaration" in mind for the transition of the social economy to decarbonization and the increasingly serious and frequent occurrence of natural disasters due to the progress of climate change.

Reference Scenarios

Scenario Transition risk Physical risk
4℃ Scenarios STEPS (IEA WEO2020) RCP8.5 (IPCC Fifth Assessment Report)
1.5℃ Scenarios NZE2050 (IEA WEO2020) RCP2.6 (IPCC Fifth Assessment Report)
Global Outlook based on Scenario Analysis
4℃ Scenarios:
Enforcement of various laws and regulations to achieve a decarbonized society to be stagnant, and there is no significant change from the present state. The scenarios with high physical risk due to no reduction in greenhouse gas emissions compared to 1.5℃ scenarios, but low risk of transition toward a decarbonized society.

1.5℃ Scenarios:
Various laws and regulations will be enforced to achieve a decarbonized society. Scenario with lower physical risks due to reduced greenhouse gas emissions compared to 4℃ scenarios, but higher transition risks toward a decarbonized society.

Climate-related risks and opportunities (short-, medium- and long-term climate-related risks and opportunities and financial impacts)

For each of the above 4℃ and 1.5℃ scenarios, we have evaluated the magnitude of the financial impacts on JHR which will be caused by the identified risks and opportunities. For each scenario, we evaluated the impact in the years 2025 (short-term), 2030 (medium-term) and 2050 (long-term) on a scale of large, medium and small.
The accuracy of this assessment is not guaranteed, as it is a relative impact assessed based on a qualitative analysis and includes various factors such as uncertain assumptions and unknown risks over the medium to long term. A summary of the results is shown in the table below.

<Financial Impact Based on Scenario Analysis>

Category Risk and Opportunity
Factors
Financial Impact Initiatives
and
Countermeasures
Changes Classifi-
cation
4℃ 1.5℃
Short-
Term
Mid-
Term
Long-
Term
Short-
Term
Mid-
Term
Long-
Term
Transition Risks
Policy and
Legal
Strengthening taxation on GHG emissions through the introduction of a carbon tax Increase in tax burden on GHG emissions from properties under management Risks Minor Minor Minor Minor Mode-
rate
Major
  • Switch to equipment with superior environmental performance
  • Consider introduction of renewable energy
  • Third-party verification of aggregated environment data (energy, GHG, water and waste)
Expansion and mandate of labeling systems related to energy efficiency and sustainability initiatives for buildings Rise in expense of acquiring environmental certification Risks Minor Minor Minor Minor Mode-
rate
Mode-
rate
Technology Evolution and diffusion of renewable energy and energy-saving technologies Increase in expenses for introducing new technology for equipment in properties under management Risks Minor Minor Minor Minor Minor Mode-
rate
  • Survey the latest technology and estimate the effect by introducing equipment with the latest technology
  • Introduce water-saving devices, reduce sewage and wastewater by introducing ECO-cleaning, and use LED lights
Reduction of utility costs through the introduction and replacement of equipment with high energy-saving performance Oppor-
tunities
Minor Minor Minor Minor Mode-
rate
Mode-
rate
Market
and
Reputation
Changes in the investment attitude and investment and financing decisions of market participants Deterioration of financing conditions and increase in financing costs due to delay in response to climate change Risks Minor Minor Minor Minor Minor Mode-
rate
  • Disclose information with ESG disclosure framework (TCFD, etc.). Set targets and implement initiatives in line with government policies
  • Consider introduction of renewable energy
  • Promote energy saving through periodic facility renovations and conduct tenant satisfaction surveys
  • Obtain environmental certifications (SMBC eco-certification, BELS and CASBEE)
  • Issue green bonds, etc.
Increase funding volume and lower funding costs by responding to and appealing to investors who are concerned about environmental issues Oppor-
tunities
Minor Minor Minor Minor Mode-
rate
Mode-
rate
Change in demand from hotel lessees and hotel guests (avoiding properties that are less climate-responsive) Decrease in rents due to increased costs for responding to the demands of hotel lessees, etc. and hotel users (guests) and deterioration of reputations due to non-response Risks Minor Minor Minor Minor Minor Mode-
rate
Increase market recognition and market competitiveness as an eco-friendly property Oppor-
tunities
Minor Minor Minor Minor Mode-
rate
Mode-
rate
Physical Risks
Acute Damage to property caused by typhoons and other wind damage Increase in repair and insurance costs, loss of sales opportunities and lower occupancy rates Risks Minor Minor Mode-
rate
Minor Minor Minor
  • Check hazard maps
  • Mitigate damage by strengthening facilities, prepare BCP manuals, and conduct disaster training
  • Mitigate damage by strengthening facilities
Floods of nearby rivers and rainfall inundation caused by torrential rains, etc. Increase in repair and insurance costs, loss of sales opportunities and lower occupancy rates Risks Minor Minor Mode-
rate
Minor Minor Minor
Chronic Increase in demand for air conditioning due to increase in extreme weather conditions such as extremely hot and cold weather Increase in utility costs, as well as maintenance and repair costs Risks Minor Minor Mode-
rate
Minor Minor Minor
  • Promote energy savings through facility renovation
(※)

"Transition risk" and "physical risk" are as follows.

"Transition risk": Business impacts arising from the social economy's transition to a low-carbon, decarbonized economy

- Policy and Legal Risks : Risks arising from tightening of regulations to promote decarbonization through policies and regulations
- Technology risks : Risks associated with the development of new low-carbon and decarbonization technologies and their mainstreaming
- Market risks : Risks related to markets, such as energy price volatility and changes in demand for services
- Reputational risks : Risks associated with a deterioration of reputation among stakeholders, including customers, the public, employees, and investors

"Physical risks": Business impacts resulting from progress of climate change and shifts from traditional climate patterns and phenomena

- Acute physical risks : Risks arising from sudden weather phenomena such as typhoons and floods
- Chronic physical risks : Risks arising from long-term changes in climate patterns that may cause rising sea level or chronic heat waves

Risk Management

Premise of Risk Management (Identification and Assessment of Risks)

At JHRA, which is entrusted with asset management of JHR's assets, ESG Promotion Committee mainly plays a central role. ESG Promotion Committee identifies and assess climate-related risks as well as consider and decide business strategies to manage risks and countermeasures as one of the ESG issues. The processes of identification and assessment are as follows.

For an overview of ESG Promotion Committee and ESG Team, please refer to "Sustainability Promotion System" within ESG Initiatives.

Management of climate-related risks

The processes for managing the assessed climate-related risks are as follows.

For an overview of Risk management, please refer to "Governance" within ESG Initiatives.

Metrics and Targets

Based on the recognition that solving environmental issues represented by climate change is one of the most important management issues for stable medium- and long-term growth of the JHR, we are promoting low carbonization of our portfolio and energy use efficiency through environmental and energy-saving measures.

Greenhouse Gas (GHG) emissions

JHR has set a target to reduce GHG emissions intensity by 30% until 2050 (compared to FY2017) as a long-term goal.
Since the properties owned by JHR are managed by hotel lessees, etc. and their GHG emissions fall under Scope 3, Category 13, Leased Assets (downstream), the sum of direct emissions from fuel consumption (Scope 1) at the properties and indirect emissions from consumption of purchased electricity, etc., which converted final energy consumption into annual CO2 emissions (Scope 2) reported by the hotel lessees, etc. are used as GHG emissions for JHR.

The GHG emissions are calculated as follows.

Others

JHR is striving to reduce GHG emissions and take the following environmental measures and others at the properties it owns, aiming to build a portfolio that make reduction of environmental impact compatible with consideration of all stakeholders, including hotel guests.