Mitsui Fudosan Logistics Park : ESG Report 2021

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Top Message

As society becomes increasingly concerned about sustainability, companies are required to take various actions to resolve issues related to environmental, social, and governance (ESG). Regarding our business initiatives for addressing issues related to the environment, such as climate change, conserving water resources, preventing environmental pollution, conserving resources and reducing waste, issues facing society, such as those related to human rights and revitalization of communities, and issues related to governance, such as compliance with laws and regulations and risk management are the main issues. While we recognize these as medium to long term risk factors, we also believe that they will lead to improved corporate value and unitholder value, including the creation of new value and new business opportunities. In addition, the spread of COVID-19 has been the catalyst for a further emphasis on ensuring the health and safe living of the working people.

In the asset management business as well, it is extremely important to address environmental, social, and governance (ESG) issues in all aspects of our operations. We believe that logistics facilities are social infrastructure, which are the main investment target for Mitsui Fudosan Logistics Park Inc. ("MFLP-REIT"), can especially contribute to resolving environmental and social issues.

Mitsui Fudosan Co., Ltd., the sponsor of MFLP-REIT, has established a Group Environmental Policy and a Policy for Social Contribution Initiatives in relation to activities that contribute to society and the environment, in accordance with its corporate statement of "Bringing affluence and comfort to urban living."

Mitsui Fudosan Logistics REIT Management Co., Ltd., the asset management company of MFLP-REIT, also established basic guidelines in the form of its ESG (Environment, Society, Governance) Policy in November 2017, and is forging ahead with ESG initiatives for the reduction of the environmental impact and for its stakeholders such as local communities and employees through the operation of logistics facilities and so forth.

Message Top

ESG on Views

Environmental Initiatives

ESG Report 2021

We aim to maximize unitholder value and contribute to our stakeholders by leveraging a strategic partnership with Mitsui Fudosan.

The objective of this ESG report is to provide a wide range of information to enhance stakeholder understanding of the ESG initiatives taken by MFLP-REIT and the Asset Management Company. Going forward, we will contribute to achieving a more sustainable society by promoting our ESG initiatives. We ask our unitholders for their continued support and unreserved advice.

Mitsui Fudosan Logistics Park Inc.

Hiroshi Asai, Executive Director

Index

Views on ESG			Environmental			Social Responsibility		Governance		ESG Finance
		Initiatives
03 Policy for ESG	07	Climate Change	19	Basic Approach	31 Governance	37 Initiatives for
Initiatives			Initiatives			Regarding Social		Framework		ESG Finance
05 Sustainability	11	Environmental KPIs			Considerations	33 Internal Control
Promotion	13	Environmental	23	Initiatives for
Structure			Employees of the
		Performance Results
					Asset Management
06 Supported			and Initiatives
				Company
Initiatives,
17 Initiatives to Obtain
External
		Green Building
Evaluation, Etc.
		Certification

Overview of the

Investment Corporation

Overview of the Asset

Management Company

40 Overview of the

Investment

Corporation and

the Asset

Management

Company

Governance Responsibility Social

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Corporation Investment

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The objective of this ESG report is to provide a wide range of information to enhance stakeholder understanding of the views on ESG and ESG Editorial Policy initiatives taken by MFLP-REIT and the Asset Management Company. The content of this report is current as of January 31, 2022, but contains

statements that refer to other periods of time.

This report has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated version and the Japanese original, the original shall prevail.

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Policy for ESG Initiatives

Mitsui Fudosan Group's ESG Principles

The Mitsui Fudosan Group is committed to social and economic development as well as global environmental preservation under the principles of harmony and coexistence, while working to link diverse values and achieve a

sustainable society as represented by its " " corporate logo. Under Mitsui Fudosan Group's "	" principle,
we recognize the need to create neighborhoods that remain in tune with global environmental concerns. "	"

therefore reflects Mitsui Fudosan Group's aim to help establish a society that enriches both people and the planet.

ESG (Environment, Society, Governance) Policy

The Asset Management Company regards the ESG initiatives as a management issue of utmost importance, and established the "ESG (Environment, Society, Governance) Policy" in November 2017. The Asset Management Company believes that the ESG initiatives are essential for ensuring the sustainability and long-term, stable profits of MFLP-REIT, and for contributing to the benefit of all our stakeholders. We are steadily promoting ESG initiatives, including initiatives through collaboration with Mitsui Fudosan.

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Mitsui Fudosan Group's environmental and social initiatives

In VISION 2025, Mitsui Fudosan Group's long-term management vision, Mitsui Fudosan Group's objective is to achieve a sustainable society and drive continual profit growth by addressing ESG issues based on the philosophy of the Mitsui Fudosan " " logo. As part of these efforts, we will focus on the following six priority goals.

1. Establish ultra-smart societies by creating neighborhoods 2. Achieve a society where a diverse workforce can thrive

3. Achieve health, safety and security in people's daily lives 4. Create new industries through open innovation

5. Reduce environmental impact and generate energy

6. Continuously improve compliance and governance

Sharing of the ESG Principles with Mitsui Fudosan Group

As a member of the Mitsui Fudosan Group, Mitsui Fudosan Logistics REIT Management Co., Ltd. (the "Asset Management Company") shares the Mitsui Fudosan Group's ESG Principles, and while building a highly energy- efficient portfolio centered on MFLP facilities (leading-edge logistics facilities with Mitsui Fudosan quality), will contribute to our stakeholders in order to achieve a sustainable society.

ESG (Environment, Society, Governance) Policy

Environment

	(1) Energy saving and the reduction of CO2 emissions
1. Consideration and response
(2)	Conservation of the water resources and
to the environment		promotion of resource saving and waste reduction
	(3)	Utilization of green building certification systems

Society

	(1) Respect for human rights
2. Consideration and response	(2)	Initiatives to enhance comfort, safety and security
(3)	Consideration for local communities

to society

(4) Initiatives for officers and employees

(5) Sustainable procurement

ESG on Views

Environmental Responsibility SocialInitiatives

Share Mitsui Fudosan

Group's ESG Principles

Develop a highly	Consideration for
energy-efficient
stakeholders to build
portfolio focused
a sustainable society
on MFLP

Governance

3. Consideration and response to governance

1. Compliance with laws and regulations
2. Information disclosure to unitholders, etc.
3. Building of appropriate relations with interested parties, including the sponsor

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Sustainability Promotion Structure	Supported Initiatives, External Evaluation, Etc.

Sustainability Promotion Committee and subcommittees

In order to oversee and promote ESG initiatives undertaken by the Asset Management Company in accordance with its ESG (Environment, Society, Governance) Policy, a Sustainability Promotion Committee ("the Committee") has been established with the President & CEO of the Asset Management Company acting as chairperson who bears ultimate responsibility. This incorporates a secretariat and four subcommittees to execute the matters deliberated by the Committee. The Committee meetings are held at least once every three months, and the Committee deliberates and decides on policies, strategies, and systems related to sustainability considering ESG-related risks and opportunities. Each subcommittee will formulate and implement specific action plans based on the decisions made by the Committee. In addition, the subcommittees report on the progress of the action plan to the Committee at least once a year through the secretariat.

The secretariat will inform the officers and employees of the activities and share the details with them.

Initiatives

Support for the Task Force on Climate-related Financial Disclosures (TCFD)

The Asset Management Company has endorsed the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which works to promote disclosure of risks and opportunities faced by companies in relation to climate change. And the Asset Management Company is also active in the TCFD Consortium, which brings together Japanese companies who have endorsed the TCFD recommendations.

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ESG on Views

Organizational chart

Board of Directors of the		Board of Directors of
Asset Management Company		MFLP-REIT

Report

Sustainability Promotion Committee

[Members]

• Chairperson: President & CEO (chief sustainability officer)
• Standing member: Chief Investment Officer (sustainability executive officer)
• Standing member: Chief Finance Officer
• Secretariat

Main agenda items:

Sustainability vision, strategies and organization, various policies and targets related to sustainability, participation in and endorsement of environmental organizations, etc., content of sustainability disclosures, and execution of ESG financings, etc.

Instruct

Presentation

Sustainability Promotion Subcommittees

Investment Criteria Scrutiny Subcommittee

[Major activities]

Measures aimed at improving the environmental performance of the portfolio

LM Cooperation Subcommittee

[Major activities]

Cooperation, etc. between LM* and tenants for promotion of ESG initiatives

* LM: Logistics Manager

Disclosure Subcommittee

[Major activities]

Broadening disclosure of ESG-related information, etc.

Human Capital Subcommittee

[Major activities]

Initiatives for employees of the Asset Management Company

External evaluation

Participation in GRESB Real Estate Assessment

GRESB

The Global Real Estate Sustainability Benchmark (GRESB), the establishment of which was primarily driven by European pensions groups, is a benchmark for assessing the degree of environmental and social awareness shown by real estate companies and real estate asset management organizations. Major institutional investors in Europe, the United States and Asia use it to select investments. MFLP-REIT began participating in these assessments in 2021.

Environmental Responsibility SocialInitiatives

ESG-related policies and rules

Relationship chart

ESG (Environment, Society, Governance) Policy

Climate Change and Resilience Policy		Sustainability Promotion Structure Rules

Sustainability Promotion Committee Rules

Greenhouse Gas Emissions Reduction Policy

MFLP-REIT was awarded a GRESB 4-star rating (on 5-star scale) in the 2021 "Green Star" GRESB Real Estate Assessment.

Initiatives for ESG finance

In addition to further promoting ESG initiatives by procuring funds through ESG finance, MFLP-REIT intends to strengthen the funding base by expanding our sources of funding through approaching the group of investors interested in ESG investment and financing.

Governance

Finance ESG

Energy Efficiency Policy		Operational Manual for EMS (Energy Management System)

Sustainable Procurement Policy

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Climate Change Initiatives

Awareness of climate change

The Paris Agreement adopted in 2015 clearly states a shared global goal of keeping the rise in average temperatures from pre-industrial revolution levels to well below 2°C. The Sixth IPCC Assessment Report (Working Group I Report), published in 2021, states that there is no longer any doubt that human activities have an impact on global warming; that unless significant reductions in greenhouse gas emissions are made over the next few decades the rise in temperature from pre-industrial revolution levels will exceed 1.5°C and 2°C during the 21st century; and that the climate system will undergo changes, including an increase in the intensity and frequency of natural disasters.

Strategy

In order to incorporate the uncertainties arising from the progression of climate change into the business strategy of the Asset Management Company, we have identified risks and opportunities, conducted scenario analyses based on a 1.5-2°C scenario and a 4°C scenario, and assessed the financial impact of climate-related risks and opportunities.

Scope of scenario analysis

Message Top

In November 2017, the Asset Management Company established the "ESG (Environment, Society, Governance) Policy" and is promoting ESG responses in order to maintain and improve the corporate value and the asset value of the properties under management over the medium to long term, and to contribute to all stakeholders. We recognize that addressing climate change is one of the most important issues.

Endorsement of the TCFD recommendations and participation in the TCFD Consortium

As noted above, in FY2021, the Asset Management Company endorsed the TCFD recommendations.

Identifying, assessing, and managing the risks and opportunities that climate change poses to MFLP-REIT's asset management business in line with the TCFD Final Recommendations and enhancing the resilience of the business, are essential to ensure the MFLP-REIT's sustainable and stable earnings over the long term. We will consider further enhancement of information disclosure in the future.

By endorsing the TCFD recommendations, the Asset Management Company joined the TCFD Consortium. Many Japanese companies and organizations that have endorsed the TCFD recommendations participate in this Consortium, where their approaches to promoting climate-related disclosure are discussed and shared. In addition to exchanging information with other participants through its activities in the Consortium, the Asset Management Company proactively disseminates information on its approach to climate-related disclosure.

In addition, as a member of the Association for Real Estate Securitization, the Asset Management Company regularly collects information on outstanding efforts by other member companies to reduce environmental burdens and build a sustainable society, which will be useful for further raising environmental awareness and expanding such efforts.

• TCFD is an abbreviation for Task Force on Climate-related Financial Disclosures. This organization was established by the Financial Stability Board at the request of the G20, and provides a framework for climate-related disclosure.

The scope of the analysis is the asset management business of MFLP-REIT.

Main scenarios referenced

	Publishing agency/organization	1.5-2°C scenario	4°C scenario
Transition risk	International Energy Agency	IEA World Energy	IEA World Energy
(IEA)	Outlook 2020 NZE2050	Outlook 2020 SPS
Physical risk	Intergovernmental Panel on Climate Change	Fifth IPCC Assessment Report	Fifth IPCC Assessment Report
(IPCC)	IPCC RCP2.6	IPCC RCP8.5

4°C scenario: Decarbonization and shift to low carbon fail to progress, leading to intensification of natural disasters

Government	LM, BM	Financial institutions	Natural environment
Carbon tax/energy-	Increase in measures	Withdrawal of financing	Increase in natural
related laws &	taken to address	for assets vulnerable to	disasters due to rising
regulations not enacted	natural disasters	natural disasters	temperatures

Tenants						Investors
Preference for				Rising concern about
properties with a		the effects of natural
high level of BCP		disasters on investments

1.5°C-2°Cscenario: Following decarbonization and shift to low carbon, related laws and regulations become increasingly stringent

ESG on Views

Environmental Governance Responsibility SocialInitiatives

Governance

In accordance with the Climate Change Resilience Policy, the Asset Management Company has designated the President & CEO as the responsible director for climate-related issues and the Chief Investment Officer as the responsible executive for climate-related issues.

The responsible executive regularly reports to the Sustainability Promotion Committee, which includes the responsible director, on matters related to the identification and evaluation of the impact arising from climate change, the management of risks and opportunities, progress of initiatives, and the setting of indicators and targets.

The Sustainability Promotion Committee deliberates and reviews each agenda item, and decisions are made by the responsible director.

Climate-related issues are promoted within a supervisory framework centered on the President & CEO, who is the responsible director.

Government	LM, BM	Financial institutions	Natural environment
Strengthening of emissions	Diversifying	Widespread use of screening	Temperature increase
regulations such as carbon taxes	tenant needs	that takes environmental	curbed as CO2 emissions
Strengthening of energy regulations		performance into account	enter a declining trend
		leads to increase in financing

Tenants						Investors
Preference for properties				Increase in requests
that have good				for disclosure of
environmental performance		climate change risks

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