• Message from Top Management
• Materialiy
• ESG Policy
• ESG Promotion Structure
• Basic Approach

Message from Top Management

• Sumisho Realty Management Co., Ltd.
  Yukinari Shiraishi, President & CEO
• SOSiLA Logistics REIT, Inc. (SLR)
  Tomoaki Sato, Executive Director

SOSiLA Logistics REIT, Inc. ("SLR") and Sumisho Realty Management Co., Ltd. ("SRM"), the asset management company of SLR, believe that incorporating environmental, social and governance (ESG) factors into the investment decision making and investment management processes is essential for the maximization of unitholder value in the medium to long term.
SLR and SRM established their ESG policy in April 2020 and have been undertaking a series of ESG initiatives, particularly initiatives to reduce environmental impact, in the real estate investment management business.
We believe that appropriately disclosing these initiatives to unitholders and other stakeholders and thereby building a long-term, trust-based relationship with stakeholders will contribute to SLR's medium- to long-term growth.

Materialiy

SLR and SRM have identified materiality (material issues) in order to adapt to changing global trends, meet stakeholder expectations, and contribute to achieving a sustainable society.

Identification process of materiality

Step 1: Identify and categorize social issues
SRM identified a wide range of issues covered by the sustainability disclosure frameworks, rating agencies, etc., and identified items of interest to its stakeholders. We checked whether the issues we identified were consistent with the Sumitomo Corporation Group’s material issues and key social issues.

Step 2: Gather opinions of officers and employees
Through the ESG task force, SRM gathered the opinions of each department’s officers and employees and discussed them at the management level. External specialists also conducted a review.

Step 3: Submit to and gain approval of ESG Promotion Committee
The ESG Promotion Committee, the decision-making body for ESG promotion, deliberated on the issue and made a decision upon approval by the chairperson, the final decision-making authority.

Seven Material Issues & Initiatives

	Material Issues	Initiatives
E	Climate change mitigation	Consideration for reduction of energy consumption, CO2 emissions, etc.
	Portfolio greening	Promote acquisition of green building certifications such as GRESB, CASBEE, DBJ Green Building Certification, BELS, etc.
S	Human resource development	Provide ample training programs Support acquiring professional accreditations Develop real estate professionals with an emphasis on teamwork
	Diversity, Equity & Inclusion	Create a working environment in which diverse human resources can flourish over the medium to long term Respect human rights Provide ongoing employment support to achieve work-life balance
	Tenant satisfaction improvement & contribution to local communities	Provide/operate facilities with high tenant satisfaction Consideration for environment/society by collaborating with tenants, PMs, BMs, etc. Contribute to and consider local community
G	Engagement with investors and trustworthy governance	Disclose information to investors and promote constructive dialogue Develop a governance structure trusted by investors
	Thorough compliance & risk management	Monitor and respond to risks Appropriately operate an internal control system for compliance with laws and regulations

ESG Policy

1.Climate Change Measures

SRM shall aim for realization of carbon neutrality through efforts on efficient use and reduction of energy and minimization of greenhouse gas emissions to as close to zero as possible at real estate under management. Furthermore, recognizing the importance of renewable energies, SRM shall consider possible utilization of such.

2.Efforts on Reducing Environmental Burden

Recognizing environmental burden at real estate under management, including water consumption and waste discharge, SRM shall continuously make efforts to reduce such.

3.Consideration for Natural Environment

With sufficient consideration for protection of natural ecosystem and other natural environment as well as for maintenance/conservation of biodiversity, SRM shall promote greener buildings and communities.

4.Efforts on Improving Health and Comfort

SRM shall strive to improve real estate value by raising tenant satisfaction through assessment of needs and appropriate implementation of measures for enhancing health/comfort of tenants and local communities.

5.Efforts on Enhancing Resilience

SRM shall strive to improve real estate value by retaining and gaining good tenants through enhancement of resilience of real estate under management against climate change and disasters. In addition, SRM aims for real estate management that can respond flexibly to changes in social structure such as urbanization and work sharing.

6.Collaboration with Stakeholders

SRM shall establish a good relationship with tenants, property management companies, local communities and other stakeholders involved in real estate under management and collaborate to promote ESG.

7.Efforts for SRM’s Employees

SRM shall strive to develop employees’ skills by providing specialized training, support for acquisition of qualifications and such based on its human resources strategy. In addition, SRM shall work to create a favorable working environment to allow diverse employees to work comfortably in good health.

8.Compliance and Strengthening of Governance

In order to protect investors and ensure SRM’s proper operations, SRM shall not only abide by laws and regulations, but also strive to prevent corruption, prevent conflicts of interest, manage information properly, and value human rights and diversity.

9.Disclosure of ESG Information and Utilization of Outside Evaluation

SRM shall make efforts to implement appropriate and transparent disclosure of ESG-related information for its stakeholders, and consider utilization of outside evaluation and third-party certification.

ESG Promotion Structure

SRM has established the following structure to continuously and methodically promote initiatives based on the ESG Policy (including initiatives to address climate change).

ESG Promotion Committee

The ESG Promotion Committee shall consider and report on various initiatives based on the ESG Policy. The committee shall meet once every quarter, in principle, to propose targets and measures related to ESG, report on the implementation status of measures, and evaluate them.
Under the framework, specific ESG targets and measures determined by the ESG Promotion Committee, the progress made towards them, and other relevant information will be reported to the Board of Directors of SRM and the Board of Directors of SLR.

Structure

Number of ESG Promotion Committee meetings

Basic Approach

The Investment Corporation will strengthen relationships through two-way communication with each stakeholder, provide environmental, social and economic value, and contribute to the formation of a sustainable society.