Mitsui Fudosan｜Sustainability/ESG

Policy

Understanding that considering its impact on biodiversity on a global scale is a key management issue, the Group engages in efforts to protect biodiversity throughout its business activities while also considering the impact that its supply chains have on biodiversity.

As part of our business activities, based on our Group Environmental Policy, we strive to protect precious natural environments in urban areas and preserve the trees and forests that pass on the memories and history of the land. We also work to create new green spaces in urban areas. Further, recognizing the maturity that comes with age, we are also working to create and restore greenery and biotopes that are in harmony with the surrounding environment and that protect biodiversity.

Moving forward, we will proactively disclose information on initiatives such as these while referring to the Taskforce on Nature-related Financial Disclosures (TNFD) framework, a tool for the disclosure of information on nature-related risks and opportunities.

Mitsui Fudosan Group Biodiversity Policy
(Established March 31, 2023)

In the Mitsui Fudosan Group's urban development business, ecosystems are something that must be protected at all costs. In addition, natural environments that are home to diverse living organisms provide places for enjoyment and relaxation in the city, and as such they also add significant value to urban spaces. However, the Group's development of real estate and extraction of natural resources for use as building materials in the supply chain can alter ecosystems and in turn negatively impact biodiversity. As such, we have positioned our impact on biodiversity as a key management issue, and as part of the Group Environmental Policy we are committed to a broad and comprehensive range of environmental initiatives, including the protection of biodiversity.

In light of the above, we have established the Mitsui Fudosan Group Biodiversity Policy.

1. Commitment

In addition to making every effort to avoid any negative impact on biodiversity caused by our businesses or supply chains, we will strive to keep any unavoidable impact to a minimum.
To increase our positive impact on biodiversity, we will engage in initiatives to restore and regenerate biodiversity and nature, and aim to eliminate any new net negative impacts caused by our business activities (no net loss).
When conducting business in locations that are near important biodiversity areas, we will apply the mitigation hierarchy by first working to avoid any negative impact, then minimizing any unavoidable impact, before finally offsetting any remaining impact through restoration and regeneration activities.
We will fully support the "living in harmony with nature" vision of the Kunming-Montreal Global Biodiversity Framework, a global target to achieve the goals of the UN Convention on Biological Diversity, as well as the global Nature Positive goal.

2. Assessment and Monitoring of Risks and Opportunities

We will assess the impacts and dependencies on nature, including biodiversity, that our businesses and supply chains have, and also assess and appropriately respond to those risks and opportunities.
Further, to accurately manage these risks and opportunities, we will establish indicators and targets as necessary and monitor the results.

3. Stakeholder Engagement and Information Disclosure

We will work with our suppliers, experts, NGOs, and other external stakeholders as necessary.
We will proactively disclose information on our initiatives in line with this policy.

4. Education and Training

To ensure effective implementation of this policy, we will implement appropriate education and training to further understanding of the relationship between our businesses and nature/biodiversity among our executives and employees.

Implementation of Biodiversity Risk Assessments

The Group interacts with ecosystems in various ways due to the wide-ranging nature of its business activities. As such, we believe it is essential to assess our impact on biodiversity alongside the associated risks.

When carrying out new development projects, we check for the presence of trees, forests, and other elements of the natural environment on the development site, and protect, transplant, or conserve them as necessary. For development projects in regions with an abundance of nature, we assess the impact our activities have on plants, animals, and ecosystems based on laws, regulations, and ordinances concerning environmental impact assessments and protection of the natural environment.

In fiscal 2022, we conducted on-site investigations at our Group-owned forests to identify any negative impacts our business activities have on ecosystems and biodiversity. In addition to creating a Biodiversity Conservation Basic Plan for the future, we also used the results of the survey to identify relevant risks and opportunities.

Moving forward, we will continue to assess the risks and opportunities related to biodiversity in our business activities, as well as in resource extraction and other supply chain activities.

Major Initiatives

Member of the Keidanren Committee on Nature Conservation

The Company joined the Keidanren Committee on Nature Conservation. The committee administers a fund that supports nature preservation activities in developing countries as well as Japan. It also encourages such activities on the part of enterprises, and engages in a wide range of related activities.

Participation in the 30by30 Alliance for Biodiversity

In April 2022, the Group joined the 30by30 Alliance for Biodiversity, operated by an executive office of the Ministry of the Environment. This alliance aims to conserve and protect at least 30% of Japan's terrestrial and marine areas with the goal of halting and restoring biodiversity loss by 2030 (Nature Positive).

We will also protect healthy forests and practice sustainable use of trees in the forests owned by our group in Hokkaido by creating a "never-ending forest" cycle (planting, cultivating and using).

Group Forest in Rumoi, Hokkaido Certified As a Nature Harmony Site

The Yudoromap Forests (163.73 ha) in Rumoi, Hokkaido, a part of the Group's forestland, has been certified by the Ministry of the Environment as a "Nature Harmony Site" as of March 18, 2024. With a focus on this certification, in March 2023 the Group created a basic plan on considering biodiversity in Group-owned forestland, appropriately managing man-made forests by planned thinning, and maintaining biodiversity through natural forest, riparian trees and ponds. The Ministry of the Environment determined that the forest contributed to protection of rare plants and animals designated as vulnerable on the ministry's Red List.

A diverse environment of natural and planted trees form a mosaic landscape that nurtures biodiversity

The Yudoromap Forests forms a secondary, natural patchwork mosaic landscape with planted trees like Sakhalin fir, natural trees (secondary growth from around 80 years ago), riparian trees, grassland (logged-off land and prepared ground), and ponds (formerly reservoirs for agricultural use). The species found differ with each environment, and according to a June 2023 survey before applying for certification, ten rare species were found. Of those, four are on the Ministry of the Environment's Red List in the vulnerable species category, including the black woodpecker. There were five near-threatened species and one near-threatened species, that is on the Hokkaido-specific list. Rare species were found not only in natural forests but also in planted forests, grasslands (prepared ground), riparian forests, and ponds, and in each environment diverse plants and animals suited to the respective environment were thriving.

Planted Sakhalin firs

Inside a natural forest

Black woodpecker in dead tree still standing

Initiatives at Group-owned Forests

The Group owns roughly 5,000 hectares of forest in Hokkaido, and every year cuts down a certain amount of timber to use in building materials for its real estate business. Around 40% of this total is natural forest and generally this remains untouched, and as such we believe that here there is minimal impact on the forests' ecosystems through our business activities. However, the remaining 60% is artificial forest, and here we recognize that the varying ages and types of trees, as well as other factors, are impacting ecosystems and biodiversity.

In line with the above, in March 2023 we formulated a Biodiversity Conservation Basic Plan for our Group-owned forests and disclosed information on the relationships between our forests and biodiversity as per the LEAP approach of the TNFD framework.

Overview of the Mitsui Fudosan Group-owned Forests

Locations	The Group owns 70 forests in 31 municipalities in Hokkaido. The majority are at altitudes of less than 500 meters and originally deciduous broad-leaved forests or mixed coniferous and broad-leaved forests.
Area	The forests cover a total of 4,942.47 hectares. 63% is artificial, and the remaining 36% is natural.
Tree age	While in the natural forests the majority of the trees are over 70 years old, in the artificial forests the majority are Sakhalin fir that are between 40 to 55 years old.
Usage situation	Every year we cut down timber and thin trees across approx. 100 to 200 hectares of forest. This timber is used as building material for the Group's real estate business and in office furniture.
External certification	All Group-owned forests have received the Sustainable Green Ecosystem Council (SGEC) certification for sustainable forest management. The SGEC has joined and been endorsed by the Programme for the Endorsement of Forest Certification (PEFC). Moreover, our Group-owned forests have also received Forestock certification for their absorption of CO₂ and biodiversity conservation.

Biodiversity Consideration Basic Plan on Mitsui Fudosan Group' Forests

Purpose of this plan

This basic plan arranges the issues surrounding biodiversity at our Group-owned forests, setting goals and indicating matters to be addressed in our forest management.

Basic Policy

To ensure we can benefit from the diverse ecosystem services provided by forest ecosystems, we will engage in sustainable forest management with an emphasis on the following perspectives.

Long-term perspective: We will engage in forest development from a long-term perspective with the knowledge that today's forest management will create an environmental foundation for the next 50 to 100 years.
Integrated perspective: In addition to producing timber, we will move forward with forest development with the understanding that forest management is essential to ensuring we can benefit from diverse ecosystem services including carbon sequestration and soil protection.
Adaptive management: As nature is a complex system, even if our forest management and biodiversity conservation does not produce the expected results, we will adapt our forest management methods to get as close as possible to our goals.
Science-based approach: As we proceed with adaptive forest management, we will periodically monitor forest conditions, and use the data gained to conduct scientific assessments and reflect the results back into our business activities.
Community-based approach: Activities at our Group-owned forests are closely linked to the surrounding nature and the lives of local citizens. Further, as biodiversity issues are often region-specific, we will engage in business activities while listening to the opinions of regional stakeholders.

Vision

To protect and develop the natural environments in our forests and contribute to the Nature Positive goal while using them as sites for timber production.

Initiatives to Achieve Vision

The two central pillars to achieving this vision are: (1) Reducing our negative impact on nature; and (2) Increasing our positive impact on nature. We have therefore put together several matters to be addressed for each pillar.

(1) Reducing our negative impact on nature (avoidance, reduction)

Avoid cutting down trees in natural forests and forests near mountain streams
Avoid planting non-native species
Reduce landscape homogenization (standardization of tree ages)
Reduce impact from tree-cutting (reduce scale)
Prevent simplification of forest structure (leave natural trees, withered trees, and tree hollows untouched)
Reduce ground surface disturbance from forestry operation
Prevent ruin from lack of management
Reduce chemical contamination

(2) Increasing our positive impact on nature (regenerate, restore)

Regenerate natural forests
Improve habitats for plant and animal life
Protect endangered species

Mission

Even if the types and structures of trees in a small section of artificial forest are limited, broader sections of natural forest contain a variety of tree types (environments), from those that have just been cut down to mature stands. We will therefore aim to carefully protect and maintain natural forests.
We will aim to create forests that have minimal negative impact on biodiversity, such as by reducing clearcutting and leaving withering/dead trees and tree hollows untouched.

Promotion Framework

The department in charge of sustainability at Mitsui Fudosan will be responsible for administrative supervision.

Specific activities at each Group-owned forest will be outsourced to local forestry cooperatives by the Group company in charge of forest management (Minato Estate Co., Ltd.).

The challenges to tackle at each forest will be prioritized based on the forest's characteristics, and action plans for biodiversity conservation will be formulated and implemented for each.

Forests where biodiversity conservation requires particular attention will be designated as priority areas.

The status of biodiversity conservation at each forest will be monitored (audited) by experts and experienced academics.

Details on the timing and method of the above audits will be determined separately.

For information related to natural capital and biodiversity, refer to our TNFD report, which is based on the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD)*1.

*1: TNFD is an international organization set up to develop a natural capital and other nature-related risk management and disclosure framework for companies. TNFD published version 1.0 of its final recommendations on the disclosure framework in September 2023, presenting a set of recommended disclosures structured around four pillars: governance, strategy, risk and impact management, and metrics and targets.

Preserving and Creating Greenery in Urban Settings

At TOKYO MIDTOWN HIBIYA (Chiyoda-ku, Tokyo), the planted foliage incorporates the same local varieties of trees as the adjacent Hibiya Park located across the road, to ensure harmony with the park's lush greenery. The Parkview Garden (sixth floor), Sky Garden (ninth floor) and other amenities provide approximately 2,000 m² of green space (greening rate* 40%).

*Greening rate: Green area is calculated based on the method outlined in the greenery program of the Tokyo Nature Conservation Ordinance.

Greening rate (%) = (Rooftop green area + Ground green area) / (Site area - Building area + Usable rooftop area) x 100

Greenery plan for TOKYO MIDTOWN HIBIYA

Parkview Garden

Sky Garden

Otemachi One Garden is a large-scale, 6,000 m² green space, which controls heat rises on its surface. We estimate the garden will fix around 11 tonnes of CO₂ a year. We have considered the biota of the imperial palace and the region's potential vegetation, while also considering biodiversity to create a space that combines water and greenery such as bamboo-leaved oak and Japanese maples. We also plan to hold environmental education events throughout the year, including eco tours based in the green space in Otemachi, in order to raise awareness of the environment in the Otemachi-Marunouchi-Yurakucho (OMY) district.

Otemachi One Garden has been positioned as an element of the area's green infrastructure in the Basic Policy for the Promotion of Green Infrastructure in the Otemachi-Marunouchi-Yurakucho District formulated by the Council for Area Development and Management of Otemachi, Marunouchi, and Yurakucho-of which both Mitsui & Co. and Mitsui Fudosan are members.

■Basic Policy for the Promotion of Green Infrastructure in the Otemachi-Marunouchi-Yurakucho District
⇒ https://www.tokyo-omy-council.jp/wp/wp-content/uploads/2022/05/omy-greeninfra.pdf
(Japanese version only)

Preserving and Creating Wildlife Habitats

The neighborhood of Tokyo Midtown (Minato-ku, Tokyo) is a redevelopment of a former Japan Defense Agency (JDA) site in Roppongi. Approximately 140 trees remaining on the former JDA site were preserved and transplanted, and in combination with the adjacent Hinokicho Park (Minato-ku) approximately 40% of the development area (roughly 4 hectares) forms a richly green open space, for a green area about 2.7 times that during the JDA era. In Tokyo Midtown, birds of 6 orders, 18 families and 25 species, which are listed on the Red List of Important Wildlife Species for Protection by the Tokyo Metropolitan Government, have been confirmed. Moreover, within the premises, a handbook introducing the wild birds discovered in the survey is available for visitors to look at.

Wild Bird Handbook for Tokyo Midtown

Green space in Tokyo Midtown (Midtown Garden)

Japanese Pied Wagtail (lawn)

Japanese Pygmy Woodpecker (tree)

Barn Swallow (sky)

Eastern Spot-Billed Duck (water)

Wild birds living in Tokyo Midtown

Restoring Wildlife Habitats

Among the regions where the Group is engaged in business activities, the resort hotel HAIMURUBUSHI (Yaeyama District, Okinawa) is in an ordinary zone of Iriomote-Ishigaki National Park, Toba Hotel International (Toba City, Mie) in an ordinary zone of Ise-Shima National Park, and NEMU RESORT and AMANEMU (both in Shima City, Mie) in an ordinary zone and a special zone respectively in Ise-Shima National Park. In these regions, we are working to create and restore wildlife habitats lost due to development, and to minimize the impact of business activities on wildlife habitats. Using these rich natural surroundings, we also strive to provide platforms and opportunities for people to interact with nature.

NEMU RESORT (Shima City, Mie) is in Ise-Shima National Park, which overlooks Ago Bay. Large parts of the tidal wetlands and seaweed beds in Ago Bay have been lost, and efforts to restore them and in turn revitalize the ocean environment are moving forward through a joint project by industry, government, academia, and the local community. At NEMU RESORT, a project has been underway since fiscal 2012 to convert a roughly two-hectare coastal plot of open land in the park (abandoned agricultural land) as a tidal wetland, and after restoration we are checking habitation by wildlife such as flathead grey mullet, Japanese black seabream, and Japanese intertidal crab.

At AMANEMU (Shima City, Mie), an on-site vegetation survey was carried out prior to the facility's development based on the REFOREST development concept (reclaiming nature on land damaged in the past by repeated development and deforestation). Based on the results, we selected the principal trees of existing forests on the site, and carried out priority planting starting from locations artificially developed with no trees, such as lawns. In this way, we worked to restore the forest in harmony with the natural environment of the region.

The resort hotel, Halekulani Okinawa (Kunigami District, Okinawa), meanwhile, has cooperated and teamed up with Onna Village-which has announced its Village of Coral Declaration and been selected as an SDGs Future City-the Onna Village Fisheries Cooperative, and the Tropical Biosphere Research Center at the University of the Ryukyus to launch the Coral Nurturing Program. Recently, climate change, pest damage, and other factors have caused coral in waters around the hotel to die, and so the program's goal is to restore the area by planting new coral in these areas. It is an activity that guests at the hotel can participate in.

Provision of Venues and Opportunities for Activities in Touch with Nature

At the resort hotel NEMU RESORT (Shima City, Mie), we offer programs to experience nature such as Bird Watching Strolls and Satoyama Nature Tours, led by dedicated nature specialists and guides. We also offer programs to experience nature at HAIMURUBUSHI (Yaeyama District, Okinawa) such as Nighttime Park Tours, scuba diving, and snorkeling.

River and Waterside Regeneration

In Nihonbashi, which the Mitsui Fudosan Group has positioned as an important redevelopment area, we are planning five redevelopment projects with a total area of 6.7 hectares (approx. 20,000 tsubo) and total floor space of approx. 370,000 tsubo along the Nihonbashi River. River and waterside regeneration is one of the priority initiatives of this plan. We will create a water area and pedestrian network as well as contribute to viable biodiversity.

Certification System for Biodiversity

Harumi 5-chome West District Type 1 Urban Redevelopment Project (HARUMI FLAG, one of the largest comprehensive development projects in Tokyo) has acquired four environmental certifications including ABINC, a certification related to biodiversity.
⇒ https://www.mitsuifudosan.co.jp/corporate/news/2018/1129/download/sumami/20181129.pdf
(Japanese version only)

About the ABINC certification

The ABINC certification system aims to promote coexistence between nature and people in corporate activities. Based on guidelines created by Japan Business Initiative for Biodiversity, ABINC (Association for Business Innovation in harmony with Nature and Community) evaluates and certifies corporate initiatives to preserve biodiversity, such as the creation, management, and use of green spaces.
⇒ https://www3.abinc.or.jp/ (Japanese version only)
⇒ https://en.jbib.org/