NOMURA REAL ESTATE MASTER FUND, INC.

TSE code :3462

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Materiality

ESG Materiality Issues Identified by NMF

Based on the idea that it is essential for our sustainable growth to realize sustainable society, we also believe our contribution to solving social issues through our business is in line with our fundamental philosophy of “securing stable profit over the medium to long term” and “steadily achieving growth in assets under management. Consequently, it would contribute to improve our unitholder value. In order to take specific sustainable initiatives, we have identified ESG materiality issues in consideration of expectations from our stakeholders as well as the impact on our business and performance.

Materiality, Policy and Target Supporting SDGs
Enviroment
E
Raising the proportion of “green” properties in our investment portfolio
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Target ・Raise the ratio of properties acquiring green certification to 70% by 2030
KPI ・Ratio of Green Certification
Reported Location International Initiatives and Certifications/
Raising the Proportion of “Green” Properties
in Our Portfolio
Countering climate change
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Target ・Achieve a 25% reduction in overall greenhouse gas (GHG) emissions from our portfolio by 2030 (compared with the 2016 level)
KPI ・GHG emission volume
Reported Location Environmental Measures/Counting Climate Change
Society
S
Ensuring the safety and security of tenants and improving user comfort
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Target ・Improve tenant satisfaction by carrying out property renewal and renovation aimed at accommodating diversifying social needs and by enhancing the content of tenant assistance services
Reported Location Social Responsibility/Ensuring the Safety and
Security of Tenants and
Improving User Comfort
Creating a workplace environment in which everyone is treated fairly and empowered to find his/her job rewarding
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Target ・Enhance employee satisfaction via the creation of a sound working environment that ensures impartial evaluation, provides fair compensation and allows everyone to find his/her job rewarding
Reported Location ESG Management (Asset Management Company website)
Human resource development and talent management
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Target ・Help our human resources improve their capabilities by providing them with periodic training and by encouraging them to engage in self-directed studies and acquire job-related certification
Reported Location ESG Management (Asset Management Company website)
Governance
G
Strengthening corporate governance
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Target ・Develop a highly effective and transparent governance structure capable of securing an independent perspective and ensuring customer-centric business management
・ Establish an investment management structure that prioritizes the unitholder’s standpoint and unites the interests of unitholders, NMF and the asset management company by determining asset management fees based on net income.
Reported Location Governance/Governance of the Investment Corporation
Securing an Investment Management Structure
That Prioritizes Unitholders’ Interest
Ensuring compliance and risk management
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Target ・Maintain appropriate risk management and secure the soundness of operations by implementing robust countermeasures, including regularly confirming the status of legal compliance and eradicating the conflict of interest associated with transactions with interested parties
Reported Location Governance/Compliance
Governance/Risk Management
Stakeholder engagement and timely and appropriate information disclosure
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Target ・Build solid relationships with and win the trust of all stakeholders by engaging in the timely, appropriate and proactive disclosure of financial/non-financial information and by maintaining constructive dialogue
Reported Location Stakeholder Engagement

Identifying Process on Materiality Issues

Process 1:Selection of Issues to Be Considered
We have selected issues of particular concern in terms of securing NMF’s sustainable growth from among a broad range of environmental, social and governance (ESG) issues. This selection was made in reference to various guidelines, such as SASB(Note1) Standards and GRI Guidelines (Note 2), United Nations SDGs(Note 3), and evaluation criteria specified by ESG rating agencies, including MSCI and Sustainalytics, as well as the status of initiatives undertaken by our peers in the same industry.

(Note 1) The Sustainability Accounting Standards Board:
A U.S.-based non-profit organization aimed at helping businesses identify industry-specific materiality issues that could affect the judgment of rational investors and engaging in the development of standards for sustainability-related information disclosure
(Note 2) The GRI Guidelines:
International guidelines concerning sustainability reporting formulated by GRI (Global Reporting Initiative) which is an official body of the UNEP as well as a non-profit organization whose mission is to create and disseminate a sustainability report.
(Note 3) Sustainable Development Goals:
Adopted at a United Nations Summit in September 2015, SDGs comprise 17 goals and 169 targets for international initiatives to be undertaken to achieve United Nations’ 2030 agenda for sustainable development.

<SDGs 17 Goals>
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Process 2:Determining Priorities and Preparing a Materiality Matrix
We have determined priorities among the selected issues in line with their materiality by assessing their impact on NMF’s business and performance on various fronts, including its corporate philosophies, financial results and business plans. In the course of this process, we have also examined the issues from the perspectives of a variety of stakeholders within and outside the Nomura Real Estate Group. Each issue has thus been prioritized in light of its materiality to NMF’s sustainable growth from two aspects—the opportunity arising from it and the risk associated with it—with its positioning being indicated in NMF’s materiality matrix.

Process 3:Discussion for Approval on Identifying NMF’s Materiality Issues in the Investment Committee
Having determined their priorities, we have discussed these issues at the Sustainability Promotion Committee and officially positioned them as NMF’s materiality issues associated with sustainability after obtaining the approval of the Investment Committee, which serves as the highest decision making body.

<Materiality Matrix>

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