Climate Change Initiatives

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Views and Policies on Climate Change

Climate change is an important issue that brings about dramatic changes to the natural environment and social structures and has a serious impact on MORI TRUST Hotel Reit's and the Asset Management Company's operations as well as businesses overall. The background to taking on climate change as an important issue is global trends in greenhouse gas emissions regulations, such as the Paris Agreement adopted in 2015, and the progress of climate change as a scientific fact presented in reports such as the IPCC Special Report (in 2018) (Note). The Paris Agreement aims to limit global average temperature increase to below 2°C compared with pre-industrial levels and below 1.5°C as an effort target. International frameworks and domestic regulations to reduce greenhouse gas emissions are expected to be toughened in the future as a result of this. The Asset Management Company also recognizes climate change as a scientific fact and believes that measures to address the spread of natural disaster damage caused by climate change, such as intensifying typhoon damage, frequent heat waves, and a rise in global sea levels, are essential.
MORI TRUST Hotel Reit and the Asset Management Company are promoting initiatives to address climate change issues, with "Addressing climate change and improving resilience" as one of the Asset Management Company's Sustainability Policies and the MORI TRUST Hotel Reit's materiality.

(Note) The IPCC Special Report on Global Warming of 1.5 ºC published in 2018 by the Intergovernmental Panel on Climate Change (IPCC).

Declaration of Support for the TCFD Recommendations

Based on the recognition that climate change is a serious risk that threatens financial stability, the Asset Management Company expressed its support for the Task Force on Climate-related Financial Disclosures (TCFD) recommendations in March 2022, and discloses information on climate change-related risks and opportunities in the four areas of "Governance," "Strategy," "Risk Management," and "Metrics and Targets," in line with the TCFD recommendations.
MORI TRUST Hotel Reit believes that in order to secure its sustainable and stable profitability in the medium to long term, it is essential to enhance the resilience of its businesses in line with TCFD recommendations by identifying, assessing and managing risks and opportunities that may be brought about by climate change.

Governance on Climate Change

The Asset Management Company has established the following organizational governance system to respond to climate change-related risks and opportunities and promote and supervise initiatives related to climate change.

Chief Executive Responsible for Response to Climate Change

President & Director (Chief Officer with the authority to make final decisions on matters related to promotion of sustainability)

Executive Officer Responsible for Response to Climate Change

General Managers of the Strategic Management Department and Investment Management Department of Hotel REIT Management Division and General Manager of Planning & Finance Department (Operating Officers of matters related to promotion of sustainability)

Matters for Discussion and Reporting at the Meetings for Promotion of Sustainability

- Identification and assessment of impacts of climate change
- Managing risks and opportunities
- Progress of adaptation and mitigation initiatives
- Climate change responses such as setting metrics and targets

For more information about the Meetings for Promotion of Sustainability, please refer to the link below.

Policies and Management Structure > Meeting for Promotion of Sustainability

Strategies

The Asset Management Company conducted a scenario analysis of climate change for MORI TRUST Hotel Reit's portfolio to determine which climate-related risks and opportunities could have material financial impacts and to assess the financial impacts.

Reference Scenarios Used in the Scenario Analysis

(Note) IEA: International Energy Agency, IPCC: Intergovernmental Panel on Climate Change

Determined Climate-related Risks/Opportunities and Assessment of the Financial Impacts

(Note) Timeline: medium term (–2030), long term (–2050)

The Asset Management Company believes that climate change, while carrying medium- to long-term risks, can also be viewed as a chance to create new business opportunities.
Based on this scenario analysis, MORI TRUST Hotel Reit will continue its efforts to improve its resilience.

For more information on each individual case study of climate change initiatives, please refer to the link below.

Environmental Initiatives > Examples of Environmental Initiatives

Climate Change Risk Management

The Asset Management Company identifies, assesses, and manages climate-related risks under the following framework to reduce climate-related risks.

Process for Identifying and Assessing Climate-Related Risks

The Asset Management Company will conduct a scenario analysis of climate change for MORI TRUST Hotel Reit's portfolio to determine which climate-related risks could have material financial impacts, and to assess the financial impacts. The contents of these analyses will be finalized after discussion at the Meetings for Promotion of Sustainability.

Processes for Managing Climate-Related Risks

Progress on initiatives related to identified risks is regularly reported at the Meetings for Promotion of Sustainability.

Integration into Company-Wide Risk Management Processes

Based on the matters related to climate change discussed or reported at the Meeting for Promotion of Sustainability and in accordance with the "Risk Management Regulations" of the Asset Management Company, a company-wide risk assessment including risk items other than climate change is conducted every year, and a "Risk Management Plan" is formulated. The "Risk Management Plan" is formulated by resolution of the Board of Directors, and its progress is regularly reported to the Board of Directors. Through this process, climate change risk management is integrated into the company-wide risk management process.

For more information on company-wide risk management at the Asset Management Company, please refer to the link below.

Governance Initiatives > Risk Management

Metrics and Targets

The Asset Management Company sets metrics and targets to monitor its efforts to reduce the impact of climate-related risks and actualize opportunities to create new business chances.

For information on the goals and performance currently set by the Asset Management Company in relation to climate change issues, please refer to the link below.

Environmental Initiatives > Environmental Performance Data

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