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Materiality determination process

Materiality determination process

Process of Determining the Four Key Themes as of March 31, 2022.

In fiscal 2015, the Group's four key themes were determined through the following process.

STEP 1 Examine social issues extensively

STEP 2 Identify key themes for the Group

STEP 3 Identify key themes for stakeholders

STEP 4 Finalize four key themes

Step 1. Examine social issues extensively

Social issues were broadly identified using international frameworks such as ISO 26000 and the GRI G4 Guidelines as references.
Candidate key themes were selected from among those social issues that are closely related to the Group’s business.

Step 2. Identify key themes for the Group

The CSR Committee (current Sustainability Committee) discussed the degree of impact of the candidate themes mentioned above on the Group's business (relevancy and magnitude of risk) and provisionally determined the key themes.

Step 3. Identify key themes for stakeholders

Questionnaire surveys and interviews were conducted to ask major stakeholders which social issues the Group needs to address.
Themes believed to be important to stakeholders were identified.

Major Stakeholders	Reasons for Selection	Opportunities for Dialogue	Main Topics
Customers	The trust of customers is essential for the Group to promote sustainable business activities. The Group is committed to listening to customers and meeting their expectations.	・Explanation of products and services ・Opinion exchange ・Questionnaires ・Installation of special counters	・Safety/Security ・Quality enhancement ・Community revitalization ・Universal design
Employees	Employees are the basis of all business activities. The Group recognizes that having employees engage I their work with enthusiasm and in good physical and mental health is a source of growth for the Group’s business activities and for the employees themselves.	・Interview with the Human Resources Division and supervisors ・Labor-management talks ・Group/Company newsletters	・Diversity ・Work style reform ・Mi- to long-term careers
Local Communities	The Group believes that working with local communities is important for promoting sustainable business. It also recognizes he importance of confronting the issues faced by local communities and engaging in dialogue with them to encourage community revitalization.	・Opinion exchange ・Questionnaires	・Community revitalization ・Environmental conservation
Government	Being engaged in the development business, it is essential for the Group to have partnerships with the government, including in the area of permits and approvals. To build urban areas for the future (tomorrow), the Group will promote its business activities while maintaining communication with the government.	・Opinion exchange	・Community revitalization ・Environmental conservation ・Compliance
Suppliers	All of the Group’s business activities are supported by suppliers. The Group recognizes its mission as creating healthy and pleasant working environments for all suppliers.	・Opinion-sharing on the Procurement Guidelines ・Safety Conference	・Planning and design of products and services ・Quality control ・Compliance
Shareholders and Investors	The Group recognizes that the understanding and trust of its shareholders and investors is essential for conducting sustainable business activities. It will promote appropriate information disclosure and communication.	・General shareholder meeting ・IR meeting ・Reports	・Settlement and financial status ・Mid- to long-term business strategies

Step 4. Finalize four key themes

Based on the perspectives of both stakeholders and the Group, candidate themes were mapped according to their importance and the four key themes were selected.

In regard to the four key themes, social issues, primary reasons, the Group’s approach, and related strategies and so on were clarified.

Safety/Security
Stakeholders	Employees, suppliers, customers, local communities
Major Social Issues	Obsolescence and aging of buildings and infrastructure, deterioration of urban functions, increase in natural disasters
Primary Reasons	■The Group's business significantly requires natural resources and energy, and environmental issues have an impact on business continuity ■In addition to improving the aging and obsolescence of buildings, it is necessary to increase life spans and enhance durability into the future
The Group's Approach	■Contribute to the realization of safety and security for customers and local communities through the provision of products and services based on appropriate quality control and sustainable community development. ■Promote the development of work and living environments that allow for business continuity and normal life activities during emergencies.
Environment
Stakeholders	Employees, suppliers, customers, local communities
Major Social Issues	Global warming, climate change, depletion of natural resources, degradation of ecosystems
Primary Reasons	■As the Group’s business uses large amounts of natural resources and energy, environmental issues significantly impact business continuity ■Environmental problems are major issues that affect not only the Group's business, but also the livelihoods and businesses of stakeholders
The Group's Approach	■Contribute to the realization of sustainable societies through urban development with environmental care such as initiatives toward energy efficient and low carbon society, renewable energy use, and appropriate use of resources. ■Comply with environmental laws and regulations and promote the implementation of appropriate environmental management.
Community
Stakeholders	Employees, suppliers, customers, local communities
Major Social Issues	Community failure, decline in dynamism, and weakening of ties due to declining birth rate, aging population, or increasing number of vacant homes
Primary Reasons	■Sound functions of and independent actions by communities are essential for sustainable urban development ■Developing sound communities requires support in the form of design and services
The Group's Approach	■Support community development by encouraging connections between customers and local society through our building design measures and operation services. ■Contribute to the creation of harmonious societies by promoting effective mutual assistance in emergencies as well as neighborhood and community revitalization.
Health and Well- being
Stakeholders	Employees, suppliers, customers, local communities
Major Social Issues	Declining birth rate, aging population, globalization, diversification of individual values and lifestyles
Primary Reasons	■The health and comfort of each individual is important for cities and communities to be sustainable ■Support in the form of design and services is necessary for individuals with various attributes to live independently and comfortably
The Group's Approach	■Leverage communication with stakeholders to provide products and services that enable people to live healthy and comfortable lives regardless of their diverse attributes. ■Contribute to the realization of a healthy and vibrant society with mutual respect for diversity.

We sorted the relevance of four key themes for sustainability with four value creation initiatives, which have been determined by the Mid- to Long-term Business Plan (from the fiscal year ended March 31, 2020 to the fiscal year ending March 31, 2028)

	Safety and Security	Environment	Community	Health and Well- being
(1) Realization of enriched lifestyles and workstyles	Develop new asset brands (shared offices, hotels, etc.) that ensure high quality.	Achieve both environmental friendliness and spatial warmth by promoting switch to timber for buildings with use of domestic materials.	Realize a community that accepts diverse lifestyles and workstyles.	Provide products and services designed to increase healthy lifespan and urban development with consideration given to diversity.
(2) Multifunctional urban development aiming for exceptional convenience, comfort, and safety	Improve the safety and security of buildings including disaster responses and thoroughly implement quality control.	Provide comfortable spaces that can adapt to changes in the environment such as global warming and respond to natural disasters.	Multifunctional urban development providing convenience such as urban compact towns.	Urban development that allows diverse people including seniors to lead healthy and comfortable lives.
(3) Urban development and community building concerning the future of the global environment and local communities	Enhance repair construction and maintenance to extend building lifespans and durability.	Enhance the environmental performance, acquire green building certification, and improve environmental consciousness and customer services through energy-related businesses.	Build systems and expand products and services to create sustainable communities.	Provide various programs to local residents by creating an open community based on the BE UNITED concept.
(4) Global expansion of high-quality products and services	Globally expand high- quality products and services that realize safety/security.	Globally expand buildings with high environmental value and operation business.	Globally expand urban development with consideration to communities and leveraging knowledge related to community revitalization.	Globally expand urban development that allows diverse people to lead healthy and comfortable lives.
Corresponding GRI Standards	Effluents and waste, customer health and safety	Energy, water, biodiversity, emissions, effluents and waste, supplier environmental assessment	Indirect economic impact, local communities, supplier social assessment	Diversity and equal opportunity
Main Related SDGs
Main Related SDGs

Process of Determining the Sustainability Policies and Objectives(Based on the Four Key Themes for Sustainability as of March 31 2022)

STEP 5 Identify activities and business related to each key theme

STEP 6 Evaluate and discuss issues

STEP 7 Determine and approve policies and materiality

Step 5. Identify activities and business related to each key theme

Following interviews with business divisions, business and operations related to the Four Key Themes were identified and investigated with the business units.

Step 6. Evaluate and discuss issues

Issues relating to the environment, society, and governance within international frameworks and responsible investment were clarified.

Step 7. Determine and approve policies and materiality

Following deliberation by the CSR Committee (current Sustainability Committee), the Group-wide Sustainability Objectives were determined. The Sustainabiliy Objectives were approved by the Nomura Real Estate Holdings Board of Directors.

Nomura Real Estate Group’s Policy on Sustainability

Results of The Sustainability Policies and Objectives(Based on the Four Key Themes for Sustainability as of March 31 2022)

Sustainability Theme	Material Issues	Group Targets / Indicators
Four Key Themes
Environment	Enhancement of environmental management	Acquiring of advanced environmental management certification (DBJ Green Building, LEED, CASBEE, etc.) Enhancement of environmental management
	Responding to climate change	Reducing CO₂ emissions Responding to climate change
		Promoting solar power generation Responding to climate change
		Reducing energy use Responding to climate change
	Effective utilization of water resources	Reducing water usage Effective utilization of water resources
	Consideration for biodiversity	Acquiring biodiversity certification (ABINC / JHEP / SEGES) Consideration for biodiversity
	Appropriate utilization of resources and pollution control	Reducing waste discharge Appropriate utilization of resources and pollution control
	Appropriate utilization of resources and pollution control	Promoting use of domestic/certified timber Appropriate utilization of resources and pollution control
Safety/Security	Improved safety/security in design and construction	Complying with design and construction standards and quality manuals Improved safety/security in design and construction
	Improved quality of safety/security in operation and management	Improved management quality and expanding after-sales service Improved quality of safety/security in operation and management
	Initiatives for longer life and increased durability	Proving of long life and high durability products and services Initiatives for longer life and increased durability
	Safety and security in disasters	Expanding of disaster preparedness Safety and security in disasters
Community	Care for and activation of communities	Expanding of planning and design for revitalization of communities Care for and activation of communities
Community	Care for and activation of communities	Supporting revitalization of communities in operations and management Care for and activation of communities
Health and Well-being	Response to aging population and diversity, and health support	Promoting universal design Response to aging population and diversity, and health support
		Supporting health and increasing healthy life expectancy Response to aging population and diversity, and health support
	Improved customer satisfaction and comfort	Promoting communication to improve customer satisfaction Improved customer satisfaction and comfort
	Improved customer satisfaction and comfort	Improving comfort Improved customer satisfaction and comfort
Two promotion foundations
Human Resources	Health and safety of employees	Preventing work-related accidents Health and safety of employees
		Promoting thorough physical and mental health management Health and safety of employees
		Promoting taking of paid leave Health and safety of employees
		Preventing overwork Health and safety of employees
	Promotion of diversity	Promoting active participation by women Promotion of diversity
		Supporting childcare and nursing care Promotion of diversity
		Promoting hiring of seniors and people with disabilities Promotion of diversity
	Creation of fair and rewarding workplaces	Improving employee satisfaction Creation of fair and rewarding workplaces
	Improvements to human capital	Enhancing cultivation of human capital Improvements to human capital
	Supplier safety	Ensuring supplier safety Supplier safety
Management Structure	Improved supplier management	Compliance with CSR procurement guidelines Improved supplier management