Risk Management

Fundamental Approach

Pursuant to basic rules of risk management, we manage various risks related to the Hulic Group's businesses, which include operational risk, market risk, liquidity risk, and credit risk, among others.

《Results in FY2018》

  • Number of total disaster training and first-aid training conducted: 1 time

Risk Management Structure

We hold regular meetings of committees related to risk management, such as the Risk Management Committee and Capital ALM Committee, and control risks by grasping changes in risk by collecting and analyzing monitoring indices. Through this PDCA cycle, we carry out risk management continuously to stabilize our business operations. In addition, internal audits are carried out on all departments and operations, in order to verify the appropriateness of risk management practices. With regard to real estate, the greatest asset of Hulic, we obtain regular appraisals to comprehend the market risk of real estate, and we have also formulated a business continuity basic plan to prepare for large-scale disasters, under which we are working hard to reinforce our risk management structure by implementing company-wide training drills and other measures. Based on experiences from the Great East Japan Earthquake, we have also checked seismic performance, liquefaction countermeasures, and flood control measures at each building.

Risk Management Structure Chart

Business Continuity Initiatives for Disasters

Business Continuity Approach for Disasters

Hulic is a real estate company that engages in the development, reconstruction, and operation of office buildings and condominiums primarily in Tokyo's 23 wards. We are constantly working to generate new added value by offering properties that are superior in terms of safety, environmental performance, and convenience. We have established various emergency and disaster scenarios for which we have created measures to improve the structural performance of our buildings as well as operational and management aspects.

Establishment of the Fundamental Business Continuity Plan (BCP)

In 2006, Hulic formulated the Fundamental Business Continuity Plan, which stipulated Company-wide activities in preparation for large scale disasters including earthquakes occurring directly beneath the Tokyo Metropolitan Area. The following year, the BCP Manual was created based on this plan. The contents of the fundamental business continuity plan are classified into “I. Initial responses”, “II. Emergency responses” and “III. Emergency and restoration measures for business continuity”, according to the time passed after a disaster occurrence.
We decided methods to confirm customer's safety, handle the injured, and confirm the safety of employees as initial responses. The contingency plan to be implemented mainly by the emergency task force, as well as the emergency and restoration measures to continue business, have been described specifically.
Furthermore, a portable Disaster Response Manual was formulated and delivered to all employees. The manual contains information on mental preparation for disasters, procedures for the use of emergency messaging services, procedures for a system to register safety information, and an area map, as well as a flowchart showing how to behave in the event that a disaster took place on the way home or to the office, or while on a holiday.

BCP Measures Based on the Experience in the Great East Japan Earthquake

After the Great East Japan Earthquake, identifying minimal and essential things to maintain functions as a company from among all of our operations, we established the system to continue our business. Assuming that transportation systems will be damaged after the occurrence of an earthquake, we formulated a plan that can be conducted by the limited number of employees who live in the area near the office, paying attention to enable any employees to execute alternative operations. In the case that it will be difficult to maintain functions of the head office for several months due to the prolonged damages caused by a disaster, we enhanced the necessary systems so operations centered on fund management and accounting can be performed by moving the base to the Kansai area. Furthermore, a Twitter account was opened as a supplementary means to communicate with the Head Office and collect emergency information by linking to sources of disaster information from public organizations. In addition, we are operationalizing the PDCA cycle within our business continuity system by carrying out periodic BCP training sessions based on the Fundamental Business Continuity Plan. Furthermore, we have constructed a cross-cutting cooperation system with external organizations such as design companies, construction companies, management companies, and elevator companies, and are working to realize high effectiveness for the continuation of the real estate business through measures such as jointly held disaster training sessions.

Review and Improvement of the Fundamental Business Continuity Plan (BCP)

Given Hulic's responsibility to ensure earthquake-proof safety of buildings, we have developed the “Fundamental Business Continuity Plan.” By following the plan, we periodically carry out BCP drills to implement the PDCA (plan-do-check-act) cycle for our business continuity system. In addition, we review the “Fundamental Business Continuity Plan” periodically and actively prepare for company-wide restoration activities for large-scale disasters including the earthquakes that may occur directly beneath the Tokyo Metropolitan Area.
The contingency plan to be implemented mainly by the emergency task force and the emergency and restoration measures to continue business have been described specifically. In addition, a Twitter account was opened as supplementary means to communicate with the Head Office and collect emergency information, linking to sources of disaster information of public organizations.
Furthermore, we have established cross-sectional cooperation with external organizations such as design companies, construction companies, management companies, as well as elevator companies, and conducted disaster prevention drills jointly with such external organizations. As can be seen from this example, we have been engaging in activities that are highly effective for continuing real estate business. As the things we can deal with are limited in an emergency, cooperation with relevant companies such as construction companies and building management companies is essential. Therefore, for the actual disaster prevention drills, we establish the themes specified below. During the drills, we check whether the participants can act in a speedy and appropriate manner in accordance with the themes.

  • Simulation of emergency network and safety confirmation
  • Temporary judgment of building's risks by emergency risk discriminator
  • Confirmation of items required to be dealt with in accordance with a checklist of initial responses at emergency
  • Implementation of confirmation test in preparation for system restoration
  • Emergency contact with management companies (using disaster prevention wireless system)
  • Check of the operation of the emergency generator
  • Check of stockpiles

Regarding our company-owned properties, we carry out fire and evacuation drills in cooperation with the respective town associations.
In addition, we promote installing security cameras in town to prevent crimes.

  • Fire drill
  • BCP drill
  • AED training

Improving the Earthquake Resistance Performance of Buildings

Hulic ensures that its new office buildings meet the highest earthquake resistance standards by equipping them with such features as base isolation and vibration suppressing designs in order to protect lives and the operation of facilities in the event of a major earthquake. These standards are made known to the public in our KPI. Additionally, for existing office buildings, we carry out seismic retrofitting to ensure full compliance with new earthquake resistance standards, thereby ensuring the safety of occupants.

Facilities and Stockpiles for Sustaining Business Operations

We are proactively carrying out measures to strengthen the businesscontinuity capabilities of our core head office functions during an emergency. The following measures have been taken at the Hulic Head Office Building.

  1. Adopts quake-absorbing and quake-damping structures that enable building functions to operate even during an earthquake with a seismic intensity of seven
  2. Features emergency generators that can operate continuously for up to six days
  3. Secures food and drinking water to last more than seven days
  4. Uses wireless equipment for communications between the management offices of other company-owned properties, etc.

Regarding buildings for which Hulic under takes reconstruction projects, we also stockpile water resources and establish a drainage system and install emergency back-up generators that can generate power continuously three days. The business continuity capabilities of our core head office functions during an emergency. The following measures have been taken at the Hulic Head Office Building.

Emergency back-up generator

Maintaining Functions during a Disaster (Hulic Head Office Building)

Diagram of Hybrid Structure Model

Hulic was the First in the Real Estate Industry to Receive the Highest Rating of DBJ BCM

Hulic's business continuity framework highlighted above was recognized with a DBJ BCM rating from the Development Bank of Japan in November 2013. The results of the rating praised Hulic for its "particularly excellent business continuity planning initiatives." This marks the first time that a company from the real estate industry has received the highest rating from Development Bank of Japan.

Quick Summary of the DBJ BCM Rating: The DBJ BCM rating was established by the Development Bank of Japan (DBJ) and recognizes companies with particularly noteworthy business continuity management (BCM). The rating is based on a comprehensive evaluation using tangible and intangible aspects of a company's BCM initiatives, including its ability to quickly restore operations following a natural disaster.

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