Sustainability Book 2020
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Sustainability Book 2020 7-3 Nihonbashi Odenmacho, Chuo-ku, Tokyo, Japan Phone: +81-3-5623-8101 URL: https://www.hulic.co.jp/en/ As a corporation with a social presence, we aim to Our Performance in FY2019 New Medium- and Long-term Management Plan (2020-2029) Our Approach to Our business performance for FY2019 saw record high income, and Sustainability Our Approach to Sustainability practice management that is linked to our business Sustainability with Operating Income of JPY88.3 billion, an increase of 16.9% The Group has formulated another Medium- and Long-term strategy and ESG* initiatives, and to contribute to the from the previous fiscal year, Ordinary Income of JPY84.6 billion, an Management Plan (2020–2029) upon achieving almost all goals in increase of 16.7% YoY, and Profit Attributable to Owners of Parent the previous Long-term Management Plan (2014–2023) four years realization of a sustainable society. of JPY58.8 billion, an increase of 18.7% YoY. We achieved most of ahead of the original target: FY2023. With this new plan, based on our targets under the Long-term Management Plan “Hulic 10 Years our motto “driving innovation and accelerating progress,” we will * ESG stands for Environment, Social and Governance from Now” four years ahead of schedule. ROE, an indicator of continue to steadily increase corporate value by flexibly evolving in capital efficiency, considerably exceeded the target level of 10% to response to changes in the macro-environment. reach 13.6%, an increase from 12.7% the previous year, while the As one of our basic strategies, we are implementing annual dividends, which has been increased in every fiscal year since management that emphasizes sustainable co-creation and Message from the Management our listing in 2008, was increased again FY2019 by JPY6.0 to co-existence with society. We aim to execute ESG-conscious business JPY31.5. The major factors driving increase in profits were the operations and to create value for solving social issues and for tackling The starting point of Hulic's ESG Management is "For the contributions of increased leasing revenue from completed initiatives that combine social value creation with corporate growth. developments and newly acquired properties in our focus areas of Social Initiatives realization of a society full of safety, peace of mind and trust, Ginza, Shinjuku East Side, Shibuya/Aoyama and Asakusa, as well as Sustainability Materiality and Our Progress and for the continuous improvement of corporate value". an increase in sales gains resulting from the active property sales to Following the adoption of the Sustainable Development Goals (SDGs) public and private REITs and rebalancing of leasing assets. by the UN General Assembly in 2015, Hulic has considered what it One of Hulic’s strengths is our corporate culture, allowing us to can do as a real estate company toward realizing a sustainable For more than half a century, Hulic has been operating a real estate leasing business focusing on a portfolio of constantly find challenges in progressive new business fields. For society. We have identified our Sustainability Materiality and are office buildings in central Tokyo. Our strength of having a solid business foundation, based on the prime locations example, in our 3K businesses (koreisha (seniors), kanko (tourism) carrying out various initiatives to address those issues. For the and kankyo (the environment)), we are moving ahead in these environment, we created a long-term vision for the environment that of properties, has allowed us to maintain continued growth of profits and dividends since our listing in 2008, growth fields that have rising social needs. We made steady recognizes our commitment to realizing a low-carbon, without being affected by market conditions even in the face of adversity, including difficulties associated with progress in 3K businesses in FY2019. material-recycling society by 2050. This is our ideal sustainable society the Financial Crisis and the Great East Japan Earthquake. Hulic’s sustainable growth is supported by ESG-conscious Related to senior citizens, in addition to owning nursing for meeting the goals set out in the Paris Agreement adopted by the Environmental Initiatives business operations and value creation to solve social issues and pursue initiatives that combine social value homes, we are promoting the smart senior housing project with our UN General Assembly in 2015. To achieve this vision, we have set the creation with corporate growth. In our corporate philosophy, we uphold the following values: “For the realization business partners. This project refers to state-of-the-art facilities goal of reducing CO2 emissions by 45% relative to the 2013 level by of a society full of safety, peace of mind and trust, and for the continuous improvement of corporate value”. As using AI (artificial intelligence) and IoT (the Internet of things) to 2030, and we are moving forward with energy conservation and meet the challenges in nursing settings. In tourism, we are working using renewable energy. Also, we have mapped out issues that are part of our management strategy, we consider that taking initiatives to address social issues will create business on diversifying risk by separating the operation of our own brand of important to Hulic and our stakeholders, and we have identified opportunities. We will further increase Hulic’s purpose in society by implementing management that emphasizes hotels and ryokans (Japanese style luxury inns) from other those issues with the highest priority as materiality. Every material sustainability. properties that we own and rent. issue (materiality) is analyzed from the perspectives of opportunity For the environment, we are developing Japan’s first 12-story and risk, enabling us to take steps to capture opportunity and fire-resistant wooden hybrid commercial building in Ginza 8-chome, respond to risk. To advance this initiative, we set quantitative KPIs and Tokyo. Additionally, we are developing ways to achieve 100% targets for each material issue as we evaluate our progress every year. renewable electricity with 100% inhouse non-FIT (non-feed-in tariff) Corporate Governance solar power generation plants. To Our Stakeholders * RE100: We are aiming to use 100% renewable energy (the goal of RE100) by We fulfill the tasks and responsibilities demanded of us through developing solar power generation facilities for the entire Group by corporate activities in the real estate business, aspiring to further 2025. grow as we create value to share with society, customers, local communities, shareholders, employees, and all other stakeholders. In these activities, we look forward to enjoying the continued support of our shareholders. Saburo Nishiura Manabu Yoshidome CONTENTS Chairman, Representative Director President, Representative Director Our Approach to Sustainability Social Initiatives Corporate Governance External Evaluation Message from the Management Initiatives for Customers ·························· 48 Corporate Governance ····························· 80 Corporate Philosophy and Sustainability ·············· 2 Initiatives for Business Partners ··············· 52 External Directors and External Auditors ···· 86 Value Creation Story ·············································· 8 Initiatives for Employees ·························· 57 Auditing Mechanism ································ 89 Initiatives for Local Communities ············ 70 Internal Control System ··························· 91 Environmental Initiatives Initiatives for Shareholders and Investors ··· 77 Risk Management ···································· 92 Saburo Manabu Basic Policy for Environment ··················· 18 Compliance················································ 95 Nishiura Yoshidome Initiatives for Climate Change ················· 25 External Evaluation Chairman, President, Building a Material-Recycling Society ····· 36 Third-party Assurance ······························ 98 Representative Director Representative Director Initiatives for Biodiversity ························ 45 External Evaluations ································· 98 Hulic Sustainability Book2020 1 Corporate Philosophy and Sustainability Our Code of Conduct Our Approach to Sustainability Our Code of Conduct, which concretely describes our Basic Stance in an easy-to-understand manner from the viewpoint of each employee, underlies actions our directors and employees should take. 1. Respect for human rights, prohibition of discrimination 7. Concern for environmental conservation and sexual harassment 8. Maintenance and stimulation of optimal communication 2. Compliance with laws, regulations, and rules 9. Respect for intellectual property rights Corporate Philosophy and Basic Stance 3. Sincere and fair execution of business 10. Prohibition of bribery, rules regarding entertainment 4. Appropriate management of information and gift-giving Corporate Philosophy 5. Regulations of insider training 11. Transparency of transactions, rules to ensure rational 6. Insulation from anti-social forces transactions For the realization of a society full of safety, Sustainability Vision Social Initiatives peace of mind and trust, We newly established “Sustainability Vision” in April 2020 replacing “CSR Vision” which was the bases for our CSR related activities. The new Sustainability Vision embodies our simultaneous pursuit for the realization of a sustainable and for the continuous improvement of corporate value society and achievement of continuous corporate