Advance Residence Investment: Notice on Introducing Substantial Renewable Energy by Purchasing FIT Non-Fossil Fuel Certificate
June 28, 2022
For immediate release
Advance Residence Investment Corporation
Value code: 3269
1-105Kanda-Jinbocho, Chiyoda-ku, Tokyo
Wataru Higuchi, General Manager
Asset management company:
ITOCHU REIT Management Co., Ltd.
1-105Kanda-Jinbocho, Chiyoda-ku, Tokyo
Junichi Shoji, Representative Director, President and CEO
Isao Kudo, General Manager
Opinion on the introduction of substantial renewable energy through the purchase of
FIT non-fossil fuel certificate
Advance Residence Investment Corporation (“ADR”) hereby announces that it has purchased FIT non-fossil fuel certificates on the renewable energy value exchange market and as a result has substantially reached full use of renewable energy for the use of electrical energy of the 2021 financial year in the common use surfaces of the buildings belonging to ADR (hereinafter “the common use surfaces of the buildings”).
1. Overview of the transaction
In order to contribute to the realization of a decarbonized society, ADR has “Manage and reduce energy and water use, CO2 emissions, waste generation” as one of the priority initiatives (materiality ) in terms of sustainability. As part of the efforts for this initiative, ADR participated in the 4th auction of the 2021 renewable energy value exchange via a broker (Whole Energy, Inc.) and purchased certificates of non-fossil fuels FIT for fiscal year 2021 with tracking information.
With this purchase, the electricity consumption in the common areas of the properties for the financial year 2021 (approximately
13.8 million kWh) came mainly from renewable energy sources and as a result ADR achieved a reduction of approximately 6,902 tonnes of CO2 equivalent*1i.e. 100% of greenhouse gas emissions attributable to electricity consumption in common areas of buildings (99% reduction in Scope 2*2 greenhouse gas emissions for fiscal year 2021).
*1…Product of electricity consumption in common use areas of properties for fiscal year 2021 and emission factor. Among the greenhouse gas emissions for fiscal year 2021 from properties owned by ADR, ADR received an independent assurance report from Sustainability Accounting Co., Ltd. Scope 1 emissions of 169 tonnes and Scope 2 emissions of 80 tonnes (market based) (both CO2 equivalents).
*2… Scope 2 greenhouse gas emissions for ADR fiscal year 2021 refer to those from electricity and regional heating and cooling systems.
About FIT Non-Fossil Fuel Certificates and the Renewable Energy Value Exchange Market
FIT stands for Feed-in Tariff, which is a system of purchasing renewable energy at a fixed price. The non-fossil fuel certificate represents the “non-fossil value” of electrical energy derived from “non-fossil resources” as a means of generating electricity without using fossil fuels such as oil and coal.
Trading of the FIT non-fossil fuel certificate started from 2018. The renewable energy value exchange market opened in November 2021 and allowed users to purchase the renewable energy certificate for electricity at cheaper prices. The proceeds from the sale of market-traded non-fossil fuel certificates are allocated to the renewable energy generation promotion surcharge and therefore the FIT system is expected to reduce the national burden.
FIT non-fossil fuel certificate purchase mechanism
2. Future ADR and Asset Management Company initiatives
ADR and its asset management company, Itochu REIT Management Co., Ltd., are aware that initiatives related to sustainable development, focused on contributing to the achievement of a low-carbon society, contributing to regional societies and satisfying increase in tenants, are essential to maintain and increase the value of assets in the medium and long term. Both companies are committed to further enhancing investor value by promoting such initiatives in the future.
About Advance Residence Investment Corporation
Advance Residence Investment Corporation is the largest J-REIT specializing in residential properties and is managed by ITOCHU REIT Management Co., Ltd. (IRM), the ITOCHU Group’s asset management company, which invests in more than 270 rental apartments located mainly in central Tokyo. and other major cities in Japan (AUM over 460 billion yen). ADR can be expected to have a stable long-term dividend and can be considered a defensive J-REIT, thanks to stable income from residential assets and with the largest dividend pool among J-REITs.
“Advance” is the common brand name of the real estate investment company managed by ITOCHU REIT Management Co., Ltd.
ADR website: https://www.adr-reit.com/en/
MRI website: https://www.itc-rm.co.jp/en/
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