Product name: Japan Logistics Fund, Inc.
Legal entity identifier: 3538004KZWISCQO70151
The following is the adverse sustainability impact statement of Japan Logistics Fund, Inc. ("JLF") pursuant to Regulation (EU) 2019/2088 ("SFDR"). JLF has no employees in accordance with the prohibition on having employees under the Act on Investment Trusts and Investment Corporations of Japan and relies on Mitsui & Co., Logistics Partners Ltd. (the "Asset Manager"), to manage and operate the properties in JLF's portfolio. JLF and the Asset Manager are hereinafter referred to collectively as "we", "us" or "our". References to "fiscal year" or "FY" are to the 12 months began or beginning April 1 of the year specified in line with the fiscal year of the Asset Manager, unless noted otherwise.
Please note that SFDR requirements, including the scope of their application to issuers outside the European Economic Area, continue to evolve. We are therefore taking a principles-based approach to compliance with the SFDR disclosure standards, which are subject to change.
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Summary
Pursuant to Article 4 of the Delegated Regulation C(2022)1931 supplementing SFDR (the "SFDR Delegated Regulation"), JLF is required to publish on its website the information referred to therein covering the period of one calendar year. JLF is a Japanese real estate investment trust, commonly known as J-REIT, and has no employees, relying on the Asset Manager for the management and operation of its properties. The Asset Manager does not operate based on a calendar year, but operates based on fiscal year ending in March of ever year. A recalculation and translation of the data into the reference period of one calendar year would most likely lead to inaccuracies and would therefore provide a potentially less accurate overview of the required information than using the approved and validated data for the period from April 1, 2024 to March 31, 2025. This reference period is sufficiently compatible with, and shows results that do not materially differ from, those that would be produced using the calendar year-based reference period noted in the SFDR Delegated Regulation.
We consider principal adverse impacts of our investment decisions on sustainability factors. The present statement is our consolidated statement on the principal adverse impacts on sustainability factors ("PAI"). This statement on PAI covers the reference period from April 1, 2024 to March 31, 2025. The statement will be reviewed at least once during every twelve-month period ending on March 31 of each year.
We believe that our sustainability initiatives are essential for our sustainable growth. We improve long-term returns of investors and contribute to the realization of sustainable society and urban development by implementing initiatives that address social issues. Under our sustainability policies and framework, we, in collaboration with the Asset Manager, take actions on climate change, including energy conservation, use of renewable energy, and being resilient in times of disasters.
We use the definition of PAI as described in Recital 20 of SFDR being "those impacts of investment decisions and advice that result in negative effects on sustainability factors", with sustainability factors referring to environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters as defined in Article 2(24) of SFDR.
We believe that investment decisions that negatively affect climate or other environment-related resources, or have negative implications for society, can have a significant impact to risk and value creation for JLF's unitholders. To this end, we consider PAI of our investment decisions throughout all major steps of the investment decision and property management process throughout the lifecycle of the properties in JLF's portfolio.
- Description of principal adverse sustainability impacts
Nearly all types of economic activity have the potential to impact various PAI indicators, both positively and adversely. We aim to manage the risk connected to PAI from our investment decisions in several ways, including general screening criteria, due diligence and our ESG initiatives. Some of the PAI indicators listed below are currently already being monitored and reported. As the availability of data improves, it is our intention that more indicators will be added.
Table 1
Principal adverse sustainability impacts statement
JLF does not invest in investee companies, but invests in real estate. As adverse sustainability indicators 1-16 as contained in Table 1 of Annex 1 of the SFDR Delegated Regulation pertain to investee companies, these are not included in this PAI statement, which pertains to real estate investments.
Indicators applicable to investments in real estate assets | ||||||||
Adverse sustainability indicator | Metric | Impact in FY2024 | Impact in FY2023 | Impact in FY2022 | Impact in FY2021 | Explanation | Actions taken, and actions planned and targets set for the next reference period | |
Fossil fuels | 17. Exposure to fossil fuels through real estate assets | Share of investments in real estate assets involved in the extraction, storage, transport or manufacture of fossil fuels | N/A | N/A | N/A | N/A | JLF does not invest in real estate assets involved in the extraction, storage, transport or manufacture of fossil fuels. | N/A |
Energy | 18. | Share of | As of March 31, | As of March 31, | As of March 31, | As of March 31, | To track the | We adopt environmental |
efficiency | Exposure | investments in | 2025, 1.1% of | 2024, 11.7% of | 2023, 21.3% of | 2022, 31.1% of | environmental | measures such as LED |
to energy- | energy- | JLF's properties | JLF's properties | JLF's properties | JLF's properties | performance of | installation and solar panel | |
inefficient | inefficient real | did not qualify | did not qualify | did not qualify | did not qualify | JLF's | installation, and aim to | |
real estate | estate assets | as Eligible | as Eligible | as Eligible | as Eligible | properties, we | acquire more certifications | |
assets | Green Assets | Green Assets | Green Assets | Green Assets | use | accordingly. We aim to | ||
(as defined to | (as defined to | (as defined to | (as defined to | certifications | increase the percentage of | |||
the right) based | the right) based | the right) based | the right) based | issued by third- | JLF's properties with | |||
on leasable area. | on leasable area. | on leasable area. | on leasable area. | party | environmental certifications | |||
We consider | We consider | We consider | We consider | organizations | based on leasable area to | |||
properties other | properties other | properties other | properties other | such as the | 90% by the end of FY2025. | |||
than Green | than Green | than Green | than Green | Development | ||||
Eligible Assets to be "energy- | Eligible Assets to be "energy- | Eligible Assets to be "energy- | Eligible Assets to be "energy- | Bank of Japan's Green Building | ||||
inefficient real estate assets". | inefficient real estate assets". | inefficient real estate assets". | inefficient real estate assets". | Certification ("DBJ Certification"), | ||||
Building | ||||||||
Energy- | ||||||||
efficiency | ||||||||
Labeling | ||||||||
System | ||||||||
certification ("BELS Certification"), | ||||||||
SMBC | ||||||||
Sustainable | ||||||||
Building | ||||||||
Assessment | ||||||||
Loan Program, | ||||||||
Certification for | ||||||||
Comprehensive | ||||||||
Assessment | ||||||||
System for Built | ||||||||
Environment | ||||||||
Efficiency ("CASBEE") | ||||||||
for Real Estate | ||||||||
and | ||||||||
Certification for | ||||||||
CASBEE for | ||||||||
New | ||||||||
Construction. | ||||||||
With respect to | ||||||||
DBJ | ||||||||
Certification, | ||||||||
we consider a | ||||||||
property to have | ||||||||
sufficient | ||||||||
environmental | ||||||||
certification if it |
received a 3-star ranking or higher out of DBJ certification's 5-star ranking system. With respect to BELS Certification, we consider a property to have sufficient environmental certification if it received a 3-star ranking or higher out of BELS Certification's 5-star ranking system and after April 2024, Levels 4 or higher out of BELS Certification' seven levels (levels 0-6) system. With respect to CASBEE, we consider a property to have sufficient environmental certification if it received a Rank B+ or higher out of the CASBEE |