Introduction-Nature Positive as a Global Goal-

Amid increasing international recognition of how important it is to halt and recover natural loss ^{(See *1)}, at the 15th Meeting of the Conference of the Parties to the UN Convention on Biological Diversity (COP15) that convened in December 2022, the “Kunming-Montreal Global Biodiversity Framework” (GBF) was adopted as the first international targets for biodiversity since the Aichi Biodiversity Targets of 2010.
Under the GBF, based on the 2050 vision of “Living in harmony with nature,” the mission of striving for “nature positive”^*2 as defined by “taking urgent action to halt and reverse biodiversity loss to put nature on a path to recovery” by the year 2030 was set forth along with 23 concrete targets. Those targets include the assessment and disclosure of risks, dependencies and impacts on biodiversity by corporations in their operations in order to reduce negative impact on biodiversity and expand positive impact.
Based on this, we have begun to identify nature-related issues related to our business and our contribution to nature positive.

• The group has established materialities based on social challenges and has set forth a long-term management policy with environmental management as one of its group policies. We will promote this long-term management policy and realize our ideal vision.

  

• In our long-term vision and our Medium-Term Management Plan 2025, having positioned environmental management as a group policy, we will strive to expand business opportunities with the environment as the starting point through our efforts in tackling the priority challenges of a Decarbonized society, Recycling-based society, and Biodiversity. With regard to biodiversity in particular, having adopted the goal of contributing to nature positive based on regional characteristics, we currently developing, operating and managing real estate with the objectives of promoting people-and nature-conscious greening that connects the green dotting the cities in urban areas and coexisting with ecosystem services in countryside areas.
• This TNFD Report (“Report” below) discloses dependencies, impacts, risks and opportunities pertaining to the natural capital of the Group using the “Recommendations of the Taskforce on Nature-related Financial Disclosures” by the Taskforce on Nature-related Financial Disclosures (“TNFD” below) as a reference. Note that the Company, working with MS&AD InterRisk Research & Consulting, Inc. and Think Nature Inc., has examined, analyzed and organized nature-related information within the Group’s businesses.

The TNFD Framework consists of 14 disclosure recommendations organized into four pillars and six "general requirements," which are basic concepts that apply across the four pillars, and recommends disclosure on these items.

Overview of TNFD Disclosure Framework

The table below summarizes which of the 14 disclosure recommendations shown on the previous page corresponds to each of the LEAP phases of the TNFD. In this report, the results of our review with reference to the LEAP approach are disclosed in accordance with the General Requirements and the TNFD Disclosure Recommendations. The corresponding disclosure pillar and each phase of the LEAP are indicated by icons in the upper right-hand corner of each slide.

Overview of the LEAP Approach and its relationship to disclosure recommendations

As the Group’s businesses are founded on the premise of depending on and impacting nature in a variety of aspects, over time, the Group has continuously implemented initiatives to limit its negative impact on and exert a positive impact on nature.

In preparing this report, we followed the four pillars of the TNFD Recommended Disclosure as well as conducted examinations for each pillar in line with the LEAP approach provided by the TNFD,

*: The greater Shibuya area refers to the area within a 2.5-km radius from Shibuya Station as set forth in the Group’s community development strategy.
In the Report, the greater Shibuya area has been set forth as a priority area.

Nature-related dependencies and impacts in greater SHIBUYA

As a result of performing quantitative analysis using Think Nature’s analysis tools, we found that biodiversity regenerative effects before and after the building of Group properties in the greater Shibuya area turned positive starting with properties from FY2012 and beyond. At properties completed in recent years, initiatives aimed at ensuring the quantity and quality of greening, such as securing green space area largely through urban redevelopment systems and selecting native species of trees for planting, have shown positive effects, and the community planning efforts of the Group have been recognized as contributing to nature positive.

In particular, the quantity and quality of greening at target properties under our Redevelopment Business have been trending highly relative to facilities up to this point. Going forward, we will continue to promote the planning of communities that coexist with nature.

Nature-related risks and opportunities based on dependencies and impacts

Based on the dependency/impact analysis of our urban development business centered on the Greater Shibuya Area and other business, we have summarized the nature-related physical and transition risks and opportunities that we currently consider to be particularly important for our business. We found that while various nature-related risks are expected, we also expect to capture many business opportunities.

Initiatives geared towards risks, opportunities and impacts in supply chain

In the business of real estate that the Group is involved in, given the process between development and operation spans a long period of time and that numerous parties have involvement in that process, we believe that it is necessary to work together with our stakeholders to tackle nature-related issues in our entire supply chain.

Concrete initiatives by the Company aimed at nature-related impacts, etc.

Looking towards the future

In addition to the greater Shibuya area that we recently performed analysis for, we also intend on performing more detailed analysis of dependencies, impacts, risks and opportunities related to the Hotel and Leisure Business, which we operate in other priority locations. Additionally, based on a scenario analysis approach, we will further deepen analysis of the importance of risks and opportunities and the impacts on the businesses and finances of the Group as well as examine the ideal form of nature-related metrics and targets based on international trends as we move forward.

The TNFD presents six "general requirements" that should be applied across the disclosure, and recommends that companies clarify their position on these items and apply them across the disclosure. Our basic position on each of the General Requirements is described below.

1. Application of materiality

To formulate the Long-term Management Policy, the Group identified materialities based on their importance to the Group's management and to its stakeholders. One of these is "Create a Sustainable Environment," which includes nature-related themes, and this report discloses information focusing on nature-related issues.

Regarding dependencies and impacts on nature, we explain what is considered material from the perspective of the Group's management and stakeholders. Risks and opportunities are described in terms of what is considered important from the perspective of the impact on the Group's management.

2. Scope of disclosures

In this disclosure, we provide an overview of dependencies and impacts on nature, risks and opportunities for all business areas and major value chain stages, as well as a review of priority areas for all locations where we directly own and operate properties. In the priority area, the Greater Shibuya Area, we provide a more detailed explanation of dependencies, impacts, risks and opportunities based on our analysis of the area.

For areas other than the urban development business, such as the hotel and leisure business, where nature-related dependencies, impacts, risks and opportunities are considered important, we plan to proceed with detailed study and disclosure in the future.

Among the items recommended for disclosure, scenario analysis is not included in this disclosure. We plan to deepen our consideration of risks and opportunities based on scenarios in the future.

3. Location of nature-related issues

We recognize that nature-related issues vary from region to region. Therefore, for the Greater Shibuya Area, which we have identified as a region of particular priority in terms of nature-related issues for the group, we have examined dependencies, impacts, risks and opportunities based on the characteristics of the region and the nature involved. In the future, we will further consider resort facilities, another priority area.

4. Integration with other sustainability-related disclosures

We recognize that nature-related issues are closely related to various other sustainability issues such as climate change, human rights, and relationships with local communities. For example, preservation of forests and urban greenery can lead to adaptation to the effects of climate change, such as the severity of disasters and the heat island effect, and to climate change mitigation through the absorption of greenhouse gases. Recognizing the relevance of these nature-related issues to other sustainability issues, we will consider how to understand nature-related issues and how to disclose them in an integrated manner.

5. The time horizons considered

In this disclosure, we examine dependencies, impacts, risks, and opportunities over short- and medium- to long-term time horizons. As we continue to expand and deepen our region-based analysis, we will further consider what time horizon should be set to appropriately capture the Group's nature-related issues.

6. Engagement with Indigenous Peoples, Local Communities and affected stakeholders

As explained in the "Governance" pillar, we have developed a human rights policy and have identified key human rights issues, including the rights of local communities, including indigenous peoples, and are working to prevent or mitigate human rights impacts by promoting the "Sustainable Procurement Policy" to suppliers. In addition, we strive to respect the human rights of stakeholders related to our business activities in new project candidates and existing operations, and we engage with local stakeholders in our nature-related initiatives.

Under “governance” by the TNFD, it is recommended that corporations explain oversight by the Board of Directors and the roles of management as they pertain to nature-related dependencies, impacts, risks and opportunities.

The nature-related governance framework at the Company is as follows.

Main roles of Organization

• The group established the Sustainability Committee with the president & CEO (Chair) and operating officers as its members. This committee devises plans and verified results with respect to climate change and other material sustainability issues.
• The board of directors receives reports from the Sustainability Committee on material climate-related issues and the results of deliberations and oversees progress as well as conducts regular reviews.

Organizational Chart

• The group executive committee and the Sustainability Committee work in tandem to formulae policies, targets (KPI) and action plans related to environmental management, with oversight provided by the board of directors.
• The monitoring of KPI progress and the management of results is conducted by the sustainability committee.

TNFD emphasizes the importance of effective and meaningful engagement with indigenous peoples, local communities, and affected stakeholders with a high connection to nature in assessing and managing nature-related dependencies, impacts, risks, and opportunities, and recommends that this be disclosed in the "Governance" aspect of our work. Below we present our engagement with local communities as it relates to our relationship with nature through our operations including the supply chain.

Respect of Human Rights

The Group recognizes that respecting the human rights of employees and all stakeholders involved in its businesses is an essential requirement of a company with global operations and an expectation placed in all companies. Then, we formulated the “Tokyu Fudosan Holdings Group Human Rights Policy”. It is based on this belief that we support the Universal Declaration of Human Rights and other international human rights doctrines and conduct with our suppliers to carry out business activities that fully respect human rights.

We have identified several key human rights issues, including the rights of local communities and indigenous peoples, and forced labor and child labor, including in the supply chain, and are working to establish a human rights due diligence mechanism and to prevent and mitigate human rights risks.

For potential new projects or existing operations, we continuously assess risks related to respect for human rights in accordance with our risk management process to ensure that we respect the human rights of stakeholders involved in the project itself or in our business activities in the community. In procurement, we have established a "Sustainable Procurement Policy" and require our suppliers to respect human rights, as well as promote the procurement of sustainable timber formwork.

Stakeholder Engagement

Because of the significant impact on local communities and stakeholders through its wide-ranging business operations, the Group believes it is necessary to work closely with a variety of stakeholders and promotes dialogue with its employees, local communities, business partners, customers, and other stakeholders.　Specific examples of engagement are presented on the next page.

1. Engagement in urban area

In the Greater Shibuya area, Tokyu Land Corporation, as the secretariat of the Shibuya Area Management Council consisting of the public and private sectors, is engaged in rule-making and community development activities related to community development, including the formulation of local rules for outdoor advertising, disaster and crime prevention measures, information dissemination, and the creation of a lively atmosphere.

In particular, in terms of natural disasters, taking into account the unique characteristics of Shibuya Station, public and private sector stakeholders regularly conduct flooding drills at the underground plaza to guide customers to evacuate and confirm flood countermeasures in case of an emergency. In this way, we are creating a system and rules for peace of mind in the event of a natural disaster.

The company has also concluded a “Comprehensive Collaborative Agreement on Local Disaster Prevention in Shibuya Ward” with Shibuya Ward, and is working to improve the local disaster preparedness in Shibuya Ward. Shibuya Ward, which aims to create a disaster-resistant Shibuya community, and the company, which aims to create a sustainable and diverse community, are working together in a public-private partnership to realize their mutual goals and enhance the value of the Shibuya community.

2. Engagement in countryside area

To build long-term relationships with local communities and work together to address local issues, Tokyu Land Corporation serves as the Representative Director and Chairman of The Association for Reciprocal Revitalization of Renewable Energy and Region (FOURE) and actively engages in dialogue by giving lectures at municipal councils, prefectural government-sponsored workshops, and other events.
Tokyu Land Corporation, Tokyu Resorts & Stays Co., Ltd., Chino City, Nagano and the Suwa Regional Decarbonization Innovation Association entered into a comprehensive cooperation agreement intended to contribute to carbon-neutral community planning through the creation of a sustainable, circular and ecological decarbonized society (Regional Circular and Ecological Sphere), and are implementing associated efforts alongside location communities.

Sustainable Procurement Policy

In the business of real estate that the Group is involved in, given the process between development and operation for residences, office buildings, commercial facilities, hotel and leisure facilities and so forth spans a long period of time and that numerous parties have involvement in that process, we believe that it is necessary to work together with our stakeholders (design and construction companies, customers, etc.) to tackle nature-related issues in our entire supply chain.

The Company has set forth at “Sustainable Procurement Policy” that covers consideration towards the environment in the form of “compliance with and respect for international human rights and labor standards,” as well as “combatting climate change,” “biodiversity protection,” “effective use of resources,” “proper water use” and “ensure appropriate use of forest resources,” and is promoting initiatives for biodiversity conservation across its entire supply chain.

The following initiatives are cited in the “Sustainable Procurement Policy” with respect to the preservation of the natural environment.

Supply chain due diligence

Initiatives for zero forest destruction

Strategy

Under “strategy” by the TNFD, it is recommended that corporations explain the nature-related dependencies, impacts, risks and opportunities that they identified, the effects those exert on companies’ businesses, strategies and financial plans, the resilience of strategies based on scenarios, and priority locations for business activities and value chain.

In the Report, the below information is examined as it pertains to the Group’s business, with an accompanying explanation given between pp. 22-38.

The impact of nature-related risks and opportunities on the Group’s business and finances will be further examined, taking into account the concept of scenario analysis.

Using TNFD classification as a reference, we examined a summary of the nature of dependencies and impacts according to business and value chain steps and their qualitative importance. Additionally, using the sector-specific ratings in the tools ENCORE, which was developed by the UN Environment Programme (UNEP), and SBT for Nature as a reference^*1, we sorted out the importance of dependencies and impacts according to four steps between Very High and Low. The results of that analysis are as follows.^*2

Impacts

Dependencies

• “Terrestrial ecosystem utilization” was especially high from aspects such as land modification/occupation, etc. upon real estate development and operation.
• The likes of water use and the introduction of alien species was also high at the stages of GHG emissions, waste emissions and operation.
• In addition to supply services for the likes of water resources and building materials upon operation, cultural services such as landscape improvement and comfort were also high.
• At hotel and leisure facilities, the likes of water supply, pollinator and climate regulation were high at the production stage for ingredients, etc. at the upstream of the value chain.

1. *1:  For ratings at the stage of building and development under all businesses and at the stage of operation for properties other than the Renewable Energy and Hotel and Leisure Businesses, we examined importance while making supplements and adjustments as necessary based on “real estate” in each tool.
   For ratings at the stage of operation under the Renewable Energy Business, we used “renewable energy” in each tool as the basis. For ratings at the stage of operation of leisure facilities, we used “hotels, resorts and cruises” in each tool as the basis. For ratings at the stage of production of biomass fuel, ingredients, etc., we used subindustries under “forest products” and “agriculture” in each tool as the basis.
2. *2:  With regards to the segment “Real Estate Agents,” given that the importance of dependence and impacts at the stage of direct operation is not high and that indirect dependencies and impacts are similar to other real estate businesses, said segment has been omitted from this table.

As the importance of the relationship with nature at the development to operation stages at Group properties is believed to particularly high within the value chain, we evaluated priority locations for properties at 267 main sites under the Urban Development business and Property Management & Operation Business (offices/commercial facilities, hotels, leisure facilities, renewable energy facilities, etc.) based on the address of the properties. The priority locations were selected based on the indicators in the table below, which refer to the TNFD's perspective of ecologically sensitive locations, as well as the importance of the company in terms of dependency, impact, risk and opportunity.

Metrics and information used for location prioritization

1. *1: Established as the degree to which the composition, structure and functions of the ecosystem are within the scope of natural fluctuation.
2. *2: Metric denoted as a percentage (%) that indicates the extent to which species are remaining relative to cases where the ecosystem has only been subject to the minimum disturbance. (Source: References²⁾)
   (For the Biodiversity Intactness Index, 100% is assigned to so-called “untouched nature.” Otherwise, this index indicates the degree to which biological species are remaining after the ecosystem of the land in question has been “touched”)
3. *3: Significant regions serving as a key to the conservation of biodiversity as selected according to international standards.
4. *4: Metric representing a quantification of the possibility that activities to reduce threats to species in that area contribute to the reduction of extinction risk around the world as a whole.
5. *5: Metrix indicating priority level based on the prevention of the extinction of biological species and the conservation of biodiversity in light of information on the distribution of biological species. (Source: References³⁾)
6. *6: Metric indicating level of stress on water at basins based on percentage of water consumption relative to water supply volumes at the basins. (Source: References⁴⁾)

Ecosystem integrity:

Locations of offices, commercial facilities and city hotels in urban areas have low ecosystem integrity.
Locations of countryside resort hotels, leisure facilities and renewable energy facilities have medium-range to high ecosystem integrity.

Biodiversity importance:

Out of all the sites, 114 sites are in close proximity to protected. There are numerous regions with a high conservation priority level, both in urban and countryside areas.
We assigned scores based on metrics and mapped relative importance within the Company.

Water stress:

No properties are located in regions with considerably high (or high) water stress.

Based on the LEAP Approach presented by the TNFD, we performed a more detailed examination of dependencies and impacts on nature and accompanying nature-related risks and opportunities as they pertain to the greater Shibuya area, which we established as a priority location. More specifically, we examined the below information.

Map of Greater Shibuya Area

Ecosystem integrity

Biodiversity Importance

Between FY2016 and FY2018, three parties, TOKYO CITY UNIVERSITY and Group members ISHIKATSU EXTERIOR INC. and Tokyu Fudosan R&D Center Inc., performed a collaborative investigation and research⁶⁾ on the ecosystem in the greater Shibuya area. The greater Shibuya area is surrounded by large-scale green spaces that include Meiji-jingu Shrine/Yoyogi Park, Shinjuku Gyoen National Garden and the Akasaka Estate. Meanwhile, the downtown area that has large-scale green spaces surrounding it is widely dotted with smaller pockets of green. This and other characteristics make it an area that coexists with nature, a rarity for a city center.

It is believed that new and endangered species as well as plant and animal species not commonly found in urban areas inhabit those large-scale green spaces. The greater Shibuya area is therefore believed to be a key region in forming an ecological network that links together such large-scale green spaces.

An overall picture of dependencies and impacts through the value chain in the Urban Development Business in the greater Shibuya area is shown in the below diagram.

At the procurement stage for building materials, that business exerts dependencies and impacts on building materials, lumber and other resources. At the development and operation stage for real estate, while there is a possibility that the business will exert negative impact such as land modification and occupation, the business is dependent on nature from the standpoint of regulating services^*1 such as the mitigation of the heat island effect and disasters and cultural services^*2 such as comfort, stress mitigation and recreation. Also, aside from negative impact, the business, largely through its building greening initiatives, is also believed to exert a positive impact on ecosystems, such as by providing habitats for living things, as well as contribute to the increase in various ecosystem services that the Group and local communities depend on.

Dependencies and impacts that are believed to carry especially high importance are explained in detail starting on the next page.

1. *1: Regulation services: Services that control the environment through biodiversity. Examples are the effects gained through climate regulation, the mitigation of localized disasters, the inhibition of soil erosion, and the containment of pests and sickness within the ecosystem.
2. *2: Cultural services: Cultural services that people can obtain by coming into contact with nature and that impact them from aesthetic, spiritual, physiological and other aspects.

Investigation of growth/habitat services in greater Shibuya area

As part of the collaborative research⁷⁾ conducted by TOKYO CITY UNIVERSITY, ISHIKATSU EXTERIOR INC. and Tokyu Fudosan R&D Center Inc., an investigation of butterfly species was conducted in the greater Shibuya area that targeted three biodiversity-considerate properties with rooftop gardens placed and their peripheral area. As a result, the presence of butterfly species was verified in the rooftop green spaces of each of those properties. Of particular note is how it became clear that building greening by the Group may be functioning as part of an ecosystem network connecting Meiji-jingu Shrine to Harajuku and Omote-sando to exert a positive impact on peripheral ecosystems through providing habitats.

Ongoing implementation of biological monitoring in greater Shibuya area

At “Tokyu Plaza Omotesando Harajuku,” which is located in the greater Shibuya area, monitoring studies of bird and insect studies at the “Omohara Forest” rooftop garden have been conducted yearly since FY2012 (except for certain periods such as the COVID-19 pandemic) to assess changes in the inhabiting and flying situation of living creatures there⁸⁾.

Ongoing implementation of biological monitoring in greater Shibuya area

List of bird species over time and observation photographs (verification survey)

Among the impacts on nature with a high degree of importance that were examined on p.27, the impacts on the ecosystem based on land occupation and building greening of Group properties were quantitatively analyzed with the cooperation of Think Nature Inc.

Biodiversity regenerative effects

Based on the relationship between planted tree species and the birds/butterflies that use them, the percentage by which living creatures that inhabit the inside of a 1-km grid at the construction site increased or decreased before and after building was calculated for each number of species and populations across three classification groups, with the average of all six percentages used in results.

• The below diagram indicates the approach behind Think Nature Inc.’s analysis methods.

• Source: Think Nature Inc.

Contributions to nature positive in greater Shibuya area

Since the 1980s and particularly from 1990 up through the 2000s, the green space area ratio had been trending downwards before and after building. However, for the Group’s 39 properties overall, the ratio has been trending above the average for the entire commercial district. Furthermore, since 2010, which represents a global turning point that included the holding of the 10th meeting of the Conference of the Parties to the Convention on Biological Diversity (COP10), biodiversity loss was reversed to put nature on a path to recovery (nature positive).

Regarding biodiversity regenerative effects, said effects before and after building were positive at 15 properties out of all 39. In particular, biodiversity regenerative effects at properties completed in FY2012 and beyond are high. We believe these are contributing to the recovery of biodiversity in the greater Shibuya area as a whole.
In the Group’s forte of planning communities that coexist with local communities, particularly those focused on target facilities under our Urban Development Business, we believe that engaging in development and operation that achieve a harmony between the securing of the quality and quantity of green space and the comfort of community visitors and facility users have linked to the high biodiversity regenerative effects shown in recent years.

Making the greater Shibuya area an environmentally advanced city from the aspect of biodiversity as well

Evaluation of ecological network formation

With the help of Regional Environmental Planning, Inc., an environmental consulting company that assists with biodiversity initiatives, we analyzed the current situation of the formation of an ecological network in the greater Shibuya area and the direction of that formation.

Based on analysis of the current situation surrounding topography and green space, it was verified that the topography of the greater Shibuya area has the lowlands of the valleys of the Shibuya River and Meguro River intertwining with the Musashino Plateau, and that much green space remains on slopes facing the valley formation and valley areas.

Additionally, the Company’s properties are located at the red circles on the map to the right, which also constitute locations where fellow properties of ours are in proximity to each other or are concentrated.

We have found that focusing on the following three areas will likely prove beneficial for the purpose of further enhancing our future ecological network,

① Locations with large amounts of green are in proximity to each other
② Valleys, slopes along the valleys, etc. are topographically connected
③ Target properties are in proximity to each other/concentrated together

We plan on examining the future monitoring of living creatures and associated measures as we move forward.

Importance of climate regulation, disaster mitigation, etc. (regulation services in cities)

In the National Biodiversity Strategy and Machizukuri (Urban Development) GX Strategy by the Japanese government and the Regional Biodiversity Strategy by the Tokyo Metropolitan Government, functions such as the mitigation of the heat island effect through nature and the reduction of flood damage are emphasized as key ecosystem services in cities. From the standpoint of dependencies, these ecosystem services for disaster mitigation and climate regulation are believed to be crucial. According to the Ministry of Land, Infrastructure Transport and Tourism, while the area surrounding the greater Shibuya area (the area circled on the map) is an origin of heat, it is believed to be a region that can be expected to drop in temperature should green space preservation and greening measures be comprehensively taken.

Additionally, under Shibuya City’s “Green Development Policy,” it is established that forming connections with large-scale green areas through building greening and other means contributes to the creation of cool spots that serve to mitigate the heat island effect in cities. This is believed to be important from the aspect of exerting a positive aspect on such regulation services as well as the aspect of dependencies.

Functions for nature-based stress mitigation and comfort (cultural services)

As part of the new “GREEN WORK STYLE” that it is promoting at its office buildings, the Group performed scientific verifications of the impacts and effects that green (vegetation and nature) have on people. For example, following a verification of the effects of breaks taken in rooftop spaces containing green, we found that stress levels after taking breaks where green was present were 6.0 points lower than those for indoor locations with no green present, and that levels of concentration rose considerably as well.

Based on these results, we can also conclude that in cities, the greater Shibuya area included, the importance of cultural services is high from the aspects of the effects on wellness in the form of better landscapes, stress mitigation and comfort; improved productivity coming from the likes of inspiration, invigorated communication and boosts in motivation for working individuals; and the appeal and higher asset value of office, commercial and other facilities.

Based on dependencies/impacts on nature at the Group, after referring to information on the external environment such as related social trends and the direction of national government policy as well, we examined risks and opportunities envisioned in our Urban Development Business. Risks and opportunities believed to be important following a qualitative examination are as follows.

While physical risks due to the degradation of ecosystem services that we are dependent on, transition risks due to changes in regulations and the market environment and other risks are envisioned, we found that as shown on the next page, there is potential for numerous nature-related opportunities to arise.

For business sectors other than the Urban Development Business as well, nature-related risks and opportunities such as those in the below table are envisioned based on an overview of dependencies and impacts. Alongside various risks, possibilities for seizing business opportunities are also envisioned. For that reason, the Company will proceed to assess the details of dependencies, impacts, risks and opportunities by pushing forward with detailed analysis centered largely on its Hotel and Leisure Business, which we operate in priority locations.

Risk and impact management

Since “risk and impact management” by TNFD recommends describing processes for identifying, evaluating, and managing nature-related dependencies, impacts, risks, and opportunities, as well as their integration into the company-wide risk management process, we will discuss them.

Identification and evaluation process for dependencies, impacts, risks and opportunities

Regarding dependencies and impacts, after sorting out an overview of dependencies and impacts for each group business and value chain and their quantitative importance, in our Urban Development Business in the greater Shibuya area, we performed evaluations of quantitative and qualitative dependencies and impacts based on information unique to the local community.

Based on those dependencies and impacts as well as information on our external environment such as the National Biodiversity Strategy and Machizukuri (Urban Development) GX Strategy by the Japanese government and the Regional Biodiversity Strategy by the Tokyo Metropolitan Government, we identified nature-related risks and opportunities in our Urban Development Business centered in the greater Shibuya area. We disclose these risks and opportunities as those which are believed to bear a particularly high level of importance for the Group from a qualitative standpoint.

Going forward, to coincide with TNFD development efforts, we will continue to examine the ideal nature of scenario analysis and evaluations of the importance of risks and opportunities based on that analysis.

Management process for dependencies, impacts, risks and opportunities

Tokyu Fudosan Holdings established a “Tokyu Fudosan Holdings Sustainability Committee” directly under the President & CEO that devises plans for nature- and biodiversity-related challenges and other material issues, verifies the results of those plans, and reports those results to the Board of Directors.

The Group Sustainability Promotion Department acting as the secretariat for the Tokyu Fudosan Holdings Sustainability Committee and each business department set targets for nature- and biodiversity-related issues, manage their results, share associated information and, in doing so, conduct proper reporting based on related laws and regulations. Simultaneously, they endeavor to reduce negative impact and expand the positive impact on nature and biodiversity through business activities.

Additionally, having formulated the “Sustainable Procurement Policy” in January 2021, outside of our business activities, we also work together with upstream and downstream shareholders in our value chain to address the reduction of the negative impact on nature and biodiversity.

Integration of nature-related risks into group risks

Tokyu Fudosan Holdings manages risks using the below individual risk units with risks that materially impact management set forth as particularly “main risks.”

The Company centrally manages ESG risks that include nature- and biodiversity-related issues as a subcategory of “main risks.”

The Group has formulated the below targets with respect to nature-related dependencies and impacts.
Going forward, we will continue to examine the ideal nature of metrics and targets for managing nature-related dependencies, impacts, risks and opportunities in the Group based on TNFD’s final recommendations and trends in SBT for Nature as well.

KPI (GROUP VISION 2030)

Targets related to land use	Building greenery (rooftop, wall surfaces, etc.) * 100% actual in FY2020 Target of 100% for FY2030 * Newly-built large-scale office building/commercial facility properties of Tokyu Land Corporation
Targets related to waste emissions	Reduce waste emissions at our business sites and in the real estate portfolio in our possession by 11% over FY2019 by FY2030
Targets related to water resources	Reduce water resource utilization per floor area at business sites and in real estate portfolio on year-on-year basis until FY2030
Targets related to resource procurement	Formwork wood materials containing 100% certified timber by FY2030

Trends in main environmental metrics

Initiatives Regarding Nature-related Risks, Opportunities and Impacts

Specific initiatives in our group to date regarding risks, opportunities, and impact are presented below. The following are some of the major initiatives we have undertaken.

(1) Urban development: Community planning

Community planning in greater Shibuya area

In the greater Shibuya area, which has Shibuya Station at its center, we further evolved upon and deepened our “Greater SHIBUYA 1.0” concept for the area to formulate our new community planning strategy “Greater SHIBUYA 2.0.” In addition to bringing together the three elements of workplaces, residences and entertainment, we will promote initiatives for “digital” and “sustainable” as the foundation of that strategy. Regarding “sustainable,” through efforts such as developing richly-green environments, promoting decarbonization and reinforcing resilience, we are engaging in the planning of a community in which anyone can spend time in safety, security and comfort, one that has cutting-edge environmental measures in place and will grow on a continuous basis.

GREEN WORK STYLE (previously described)

At our office buildings, we are currently expanding “GREEN WORK STYLE,” through which we seek to realize improved corporate value and the realization of worker well-being from the dual aspects of “the workplace” and “office solutions” through diverse green power while being mindful of health, safety, the environment, and sustainability. By realizing a work style through which workers interact with green, we will alleviate their day-to-day stress and draw out the productivity of each individual member to the fullest while also contributing to the smooth formation of a community.

Formation of ecological network in greater Shibuya area and configuration of KPI for FY2030

Given the importance of biodiversity-conscious urban greening, in the greater Shibuya area, we are actively promoting the greening of areas such as rooftops and wall surfaces at our business sites in order to preserve the ecosystem. By connecting the green in the vicinity and acting as a relay point for the living creatures that inhabit those areas, we are tackling the formation of an ecological network in the greater Shibuya area.

In particular, when we develop large-scale properties with considerable impact on the local community, we carry out ecosystem studies in the peripheral area at the planning stage, perform greening using vegetation that takes the bird and inspect species that inhabit the area into consideration, and pursue biodiversity conservation in that community.

Targets

Building greenery (rooftop, wall surfaces, etc.)* 100% actual in FY2020 Target of 100% for FY2030

* Newly-built large-scale office building/commercial facility properties

The name of each process is the technique name at ISHIKATSU EXTERIOR INC.

Planning of community that coexists with nature at TOKYO PORTCITY TAKESHIBA

In the Takeshiba area located in Tokyo’s Minato City, which constitutes a national strategic economic growth area, we are pursuing community planning that takes advantage of industry-academia cooperation and technology and are moving forward with long-term continuous initiatives to enhance the appeal and vitality of the area of the whole, including its environment (sustainability).

The office town serving as the core piece of the project is a large-scale complex with a total floor area of approx. 180,000m2, 40 floors above ground, and two floors below ground. The higher floors consist of an office area, with the lower floors hosting a commercial area. The office lobby on the sixth floor provides a space that incorporates water and green and is in harmony with the local community.

On the southeast side of the second through sixth floors, the spacious “SKIP TERRACE” has been erected in a staircase pattern. There, the “Eight New Views of Takeshiba” made up of eight scenes represented by the sky, bees, a rice paddy, a vegetable garden, aromas, water, an island and rain are presented as a “Satoyama”-like landscape. By forming an ecological network linked to the Hamarikyu Gardens, the Kyu-Shiba Imperial Gardens and the rich green of the surrounding area, we aim to contribute to the biodiversity of the local community.

At the “Rice Paddy Scene” containing a 145m2-wide rice paddy and the “Vegetable Garden Scene” where vegetables and fruits are grown, students at the nearby preschool, tenant-related individuals and people who reside in the residence tower can take part in rice-planting or harvesting events, which will be tied into environmental education for stakeholders.

Additionally, at the “Bees Scene” where beehives are placed and the “Sky Scene” with of nest boxes placed on wall surfaces that are hard for people on the fifth, eight, tenth and twelfth floors to catch sight of, habitats for honeybees and raptor species such as falcons and kestrels will be supplied. Through these, we will contribute to biodiversity in the city center.

(1) Urban Development: Greening Technology, Planting Management, Green Infrastructure

Greening and planting management by diverse technologies based on the concept of green infrastructure

Based on the concept of green infrastructure (see note), ISHIKATSU EXTERIOR INC., which handles the group’s Environmental and Greening Management Business, has been engaged in disaster prevention and mitigation, protection and preservation of nature and biodiversity, sustainable urban development, and contracted management of various green spaces by utilizing various technologies, including urban greening technologies such as rooftop greening and wall greening.

Note : What is Green Infrastructure?

* Excerpt from the MLIT website

Ex.: Trans Planting Machine method

Ex: Three-dimensional greening method (Biocube)　

Eight major categories of green infrastructure menu

Example of menu

GREEN AGENDA：Planting management for planning and cultivating green landscapes

In condominiums, ISHIKATSU EXTERIOR INC. plans and constructs greenery to realize a living environment that nurtures life, create planting management plans (agendas) to connect them to the future, and promote "GREEN AGENDA," which integrates planning and management based on management plans and visualization technology.
In order to realize greenery for homes that meets the demands of the environmental age, it is committed to "visualizing" planting over the medium to long term, and to promoting its customers' "interest" and "sympathy" toward green.
It aim to provide sustainable landscaping support services that contribute to the conservation and restoration of biodiversity in urban development by developing its existing landscaping technologies.

(2) Hotel and Leisure Business: Forest Management and Marine Conservation

Palau Pacific Resort

(3) Other

Reduction of negative impact cause by contamination

Working together with design and construction companies and other stakeholders, the Group endeavors to reduce the effects of contaminants on the environment by preventing their discharge and refraining from using materials that cause that discharge.

Lowering of negative impact through water resource utilization

In its endeavors to preserve water resources, the Group works together with design and construction companies, customers, local communities and other stakeholders to conduct proper management tailored to water resource problems unique to each community and to utilize water resources efficiently in its business activities and at the office buildings, commercial and resort facilities, and other buildings in its portfolio.

Targets

Reduce water resource utilization per floor area at business sites and in real estate portfolio on year-on-year basis until FY2030

TNFD	Abbreviation for “Taskforce on Nature-related Financial Disclosures.” Launched in 2021 by four institutions: the United Nations Development Programme, the World Wildlife Fund, the United Nations Environment Programme - Finance Initiative and Global Canopy. Calls for the adequate assessment and disclosure of nature-related dependencies/impacts and risks/opportunities.
LEAP	Abbreviation for “Locate, Evaluate, Assess, Prepare.” Approach recommended by the TNFD to assist corporations and financial institutions with evaluating their nature-related risks/opportunities. Comprised of the four steps of “Locate” (locate the interface with nature), “Evaluate” (evaluate dependencies and impacts), “Assess” (assess material risks and opportunities) and “Prepare” (prepare to respond and report).
ENCORE	Tool for financial institutions developed by the UNEP Natural Capital Finance Alliance, or NCFA for short. Enables the assessment of the importance of dependencies and impacts on nature according to business category and the analysis of data such as distributions of ecosystem services.
SBT for Nature	Abbreviation for “Science Based Targets for Nature.” Initiative calling for the setting of targets with time limits that can be measured and executed based on the best available science with respect to the setting of nature capital-related goals by corporations.
Ecosystem integrity	Degree to which the composition, structure and functions of the ecosystem are within the scope of natural fluctuation.
KBA	Abbreviation for “Key Biodiversity Area.” Significant area serving as key to biodiversity conservation as selected according to international standards.
Biodiversity Intactness Index	Metric indicating remaining degree of biodiversity before and after land modification in the natural world when land utilization by humans and the accompanying effects on biodiversity are taken into consideration
Conservation priority level	Metric indicating level of conservation priority from the standpoint of biodiversity.
Water stress	Metric indicating level of stress on water at basins based on percentage of water consumption relative to water supply volumes at the basins.
Ecological network	Approach through which locations hosting superior natural conditions in the target region are positioned as biodiversity sites (core areas) while said core areas are mutually linked using ecological corridors in order to enable the migration and dispersion of wildlife.
Cultural services	Cultural services that people can obtain by coming into contact with nature and that impact them from aesthetic, spiritual, physiological and other aspects.
Regulating services	Services that control the environment through biodiversity. Examples are the effects gained through climate regulation, the mitigation of localized disasters, the inhibition of soil erosion, and the containment of pests and sickness within the ecosystem.
Biodiversity Action Plan (BAP)	Abbreviation for “Biodiversity Action Plan.” Action plan for biodiversity conservation on a state or organizational (including corporate) level. In the case of states, nations that entered the Convention on Biological Diversity (CBD) are requested to formulate a BAP pursuant to Article 6.
30 by 30	Target of conserving 30% of terrestrial and marine areas by 2030. Stated as Target 3 under the “Kunming-Montreal Global Biodiversity Framework” (GBF) that was adopted at the 15th Meeting of the Conference of the Parties to the UN Convention on Biological Diversity (COP15) that convened in December 2022.
OECM	Abbreviation for “Other Effective area based Conservation Measures.” Area certified the Ministry of the Environment as one in which biodiversity conservation measures are being taken regardless of original targets by various entities such as business operators, private organizations, individuals and regional public bodies and through the initiatives thereof.
Urban redevelopment systems	Systems of the Tokyo Metropolitan Government to facilitate the enticing of positive development that contributes to the improvement of the environment in the downtown area by relaxing regulations on form stipulated under the Building Standards Act, such as limitations on floor area ratio and slants. In contrast to these systems are architectural plans to make public contributions, such as those to secure public spaces.

1. “Global Risk Report 2024,” World Economic Forum (2024)
2. Newbold et al. (2016) “Global map of the Biodiversity Intactness Index, from Newbold et al. (2016)”
3. Japan Biodiversity Mapping Project, Think Nature Inc.
4. WRI Aqueduct (See June 2023)
5. Tokyu Fudosan R&D Center Inc., ISHIKATSU EXTERIOR INC. and TOKYO CITY UNIVERSITY, Faculty of Environmental Studies (Yokota/Kitamura/Yoshizaki/Iijima)
   (2019) “Guide to building greening for ecological network formation in greater Shibuya area”
6. Tokyu Fudosan R&D Center Inc., ISHIKATSU EXTERIOR INC. and TOKYO CITY UNIVERSITY, Faculty of Environmental Studies (Yokota/Kitamura/Yoshizaki/Iijima)
   (2016) “Basic survey for ecological network formation in greater Shibuya area”
7. ISHIKATSU EXTERIOR INC. (2020) “Fiscal 2019 Tokyu Plaza Omotesando Harajuku “Omokado:” Report on Biological Survey”
8. Regional Environmental Planning, Inc. (2020) “Survey on Ecological Networks that Contribute to Biodiversity in Greater Shibuya Area”