Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

SECOND PARTY OPINION
MITSUI O.S.K. LINES, LTD.
TRANSITION LINKED LOAN FRAMEWORK

Prepared by: DNV Business Assurance Japan K.K.
Location: Kobe, Japan
Date: October 26, 2021
Ref. Nr.: PRJN- 288493-2021-AST-JPN-01

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Executive Summary
MOL is one of the largest multimodal groups, which has more than 130 years history, that meets diverse
transport needs with one of the world’s largest merchant fleets. As a full-line marine transport group,
MOL operates around 800 diverse vessels. Specifically, MOL runs the dry bulker transport business,
energy transport business, product transport business, as well as associated businesses, and otherbusiness (including cruise ships).
MOL has launched “MOL Group Environmental Vision 2.1” in June 2021 and is working to solve various
environmental issues such as climate change, aiming for “Net Zero GHG Emissions by 2050”.
In advancing “MOL Group Environmental Vision 2.1”, MOL is working with ambitious goals for reducing
GHG emissions in line with the GHG emission reduction targets which comply with and are more ambitious
than the International Maritime Organization (IMO), an international organization in the shipping industry,
and the Ministry of Land, Infrastructure, Transport and Tourism of Japan. The MOL group will issue a“Mitsui O.S.K. Lines Ltd. Transition Linked Loan, hereinafter ‘MOL-TLL’”, which is linked to theachievement of the target, loan conditions and other financial incentives, setting the ambitious GHG
emission reduction target as a Sustainability Performance Target.
MOL believes that it will be an opportunity to disseminate MOL’s wide-ranging environmental strategy
initiative through the issuance of loans.
MOL has established the Mitsui O.S.K. Lines Ltd. Transition Finance Framework (hereinafter,“Framework”) in order to carry out transition finance in a manner that conforms to the framework whichis established referring to international standards.
DNV Business Assurance Japan K.K. (hereinafter, “DNV”), as an external review organization, hasevaluated the eligibility of framework and the eligibility of MOL-TLL.
Specifically, DNV provided an eligibility assessment for the framework and MOL-TLL by applying
frameworks centered on following.
-

Climate Transition Finance Handbook(International Capital Market Association 2020, hereinafter CTFH)-

Basic Guidelines on Climate Transition Finance(Financial Services Agency of Japan, Ministry of Economy, Trade and Industry of Japan and
Ministry of Environment of Japan 2021, hereinafter CTFBG)-

Sustainability Linked Loan Principles(Loan Market Association (LMA) and others 2021, hereinafter SLLP)-

Sustainability Linked Loan Guideline(Ministry of the Environment of Japan 2020, hereinafter SLLGLs)

The following is a summary of the assessment results for each common element indicated in the above
framework.
<CTF assessment results>
DNV confirmed the following through the materials and information provided by MOL.
Followings (CTF-1 ~ CTF-4) are findings and opinions of DNV against the four common elements of the
CTFH and CTFBG (disclosure elements).
CTF -1. Issuer’s climate transition strategy and governance︓
The transition strategy of the fundraiser MOL is based on a transition pathway that is consistent
with the environmental goals set by IMO, the Ministry of Land, Infrastructure, Transport andPage 2 of 43

Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Tourism of Japan, etc. and SBTi methodology*1 which defines its target and pathway. In addition,
as governance and disclosure related to execution of the finance, an internal system and an
information disclosure process based on TCFD*2 has been established. These are disclosed within
the framework and meet the disclosure elements of CTF-1.

*1: SBTi methodology for maritime sector is the draft guidance under consultation from March 2021
*2: Task Force on Climate-related Financial Disclosures

CTF-2. Business model environmental materiality︓
The environmental materiality of MOL’s business model is associated with the results of the materiality
analysis which MOL evaluated business sustainability from both positive and negative perspectives.
The transition strategy and transition pathway based on this are shown in the “MOL Group
Environmental Vision 2.1”, and the contribution to the SDGs, which will be described later, is also
taken into consideration. These are disclosed within the framework and meet the disclosure elementsof CTF-2.
CTF-3. Climate transition strategy to be ‘science-based’ including targets and pathways︓
MOL’s transition strategy is defined by science-based targets and pathways. Specifically, MOL
applies the targets set by IMO, the Ministry of Land, Infrastructure, Transport and Tourism of Japan,
etc, and SBTi methodology which defines its target and pathway which described in CTF-1, andindexes and quantifies short-and medium-term goals in addition to long-term goals, and clarifies theprocess of achieving the goals. These are disclosed through the framework or second party opinion
and meet the disclosure elements of CTF-3.
CTF-4.Implementation transparency ︓
MOL outlines the basic investment plan for the execution of the transition strategy and theoutcomes and impacts of the execution. For future overall and individual investment plans, it was
confirmed that the investment required to execute the transition strategy is planned to be executed
based on the internal management system and process in consideration of CTF-1 to CTF-3. These
are disclosed through the Framework etc, or this Second Party Opinion and meet the disclosure
elements of CTF-4.

<SLLP assessment results >DNV confirmed the following through the materials and information provided by MOL.
Followings (SLLP-1 ~ SLLP-5) are findings and opinions of DNV against the five requirements of the SLLP
(and SLLGLs).
SLLP-1.Selection of Key Performance Indicators (KPIs)︓
Please see the Table-1. MOL’s environmental sustainability (transition) KPI (EEOI︓Energy
Efficiency Operating Indicator) is material to MOL’s overarching transition strategy. The rationale
and process for KPI selection, as well as its definition, measurability and verifiability, are deemed to
be robust, reliable and in accordance with the SLLP.
SLLP-2.Calibration of Sustainability Performance Targets (SPTs)︓
DNV concludes that the MOL’s SPTs (EEOI reduction rate based on 2019) are meaningful andrelevant in the context of MOL’s broader sustainability (transition) and business strategy andrepresent a material improvement over a predefined timeline. Please see the table-1 below. SPT
constitute the annual cumulative % reduction of EEOI from 2019 to 2035. SPT is ambitiously set byusing external standards set by IMO, the Ministry of Land, Infrastructure, Transport and Tourism ofJapan etc., and consistent with SBTi methodology as benchmarks. In the evaluation of ambition,although there is a difference due to the difference between the external standard and MOL’sbaseline (base year), it has been properly estimated and adjusted by MOL, and as a result, it has

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

been demonstrated to be ambitious. In addition, DNV confirmed through a review that MOL's plans
are realizable for achieving the annual SPT from 2021 to 2035.
SLLP-3.Loan Characteristics︓
The financial characteristics of TLL issued under the framework are impacted based on KPI
performance under SPTs. This impact is a fluctuation in lending rates or other financial incentives,
and the impact is defined by a specific trigger event (SPT achievement status) in the period/datedefined based on framework in the document of the loan-related arrangement.
SLLP-4.Reporting︓
MOL plans to include the information required by SLLP in reporting, and stipulates in the frameworkthat the reporting will be disclosed at an appropriate frequency.
SLLP-5.Verification︓
MOL will undergo independent verification of KPI-related data by an external evaluation agency
annually.

Table-1 MOL Transition Linked Loan KPIs and SPT
Item

EEOI︓Energy Efficiency Operational Indicator

KPI

EEOI is an indicator to measure the GHG emission performance of ship
operations. EEOI is widely used in the shipping industry. EEOI calculation
formula is an aggregation of EEOI as defined under Science Based Target
Initiative criteria for the shipping sector under consultation (see referenced criteria right).
The IMO guidelines indicate that the use of EEOI is a recognized approach as amethodology for assessing GHG emissions from the ships.

//

Set annual EEOI reduction rate year-on-year as SPT to achieve 45% EEOI
reduction by 2035 relative to a 2019 baseline.

SPT

Referenced
criteria

Outline

MOL performs calculation adjustments comparable to the target by 2030 andtarget by 2050 (both targets are compared to 2008) defined in initial IMO GHG
strategy*, and then sets the annual EEOI reduction rate (as SPT), which is low
compared to IMO’s EEOI target reduction rate. Moreover, MOL set an ambitious
EEOI using SBTi methodology as SPT until 2035.
* Equivalent to the Roadmap to Zero Emissions from International Shipping(Ministry of Land, Infrastructure, Transport and Tourism of Japan, etc.)-

SBT setting for
the Maritime
Transport Sector
DRAFT GuidanceDocument for
PublicConsultation
V0.0|March
2021- Initial IMO GHG
Strategy (IMO),- Roadmap to Zero
Emissions fromInternational
Shipping (Ministryof Land,
Infrastructure,
Transport andTourism of Japan,etc.)

On the basis of the information, including framework, provided by MOL and the work undertaken, DNV
confirmed that the framework formulated by MOL and MOL-TLL executed by this framework meets thecriteria required by the relevant frameworks within CTFH, CTFBG, SLLP and SLLGLs is eligible.

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Contents
Executive Summary

2

Ⅰ. Introduction

6

Ⅱ.

Scope and Objectives

14

Ⅲ.

Responsibilities of MOL and DNV

15Ⅳ. Basis of DNV’s opinion

15

Ⅴ. Work Undertaken

18

Ⅵ. Findings and DNV’s opinion

19

Ⅶ Assessment Conclusion

25

Schedule-1 Key Performance Indicators (KPI) and Sustainability Performance Targets (SPT)27

Schedule-2 CLIMATE TRANSITION FINANCE ELIGIBILITY ASSESSMENT PROTOCOL

28

Schedule-3 Sustainability-Linked Loan Eligibility Assessment Protocol

33

Revision history
Revision
number0

Issue Date
26/10/2021

Remarks
InitialDisclaimer
Our assessment relies on the premise that the data and information provided by Issuer to us as part of our review procedures have been provided in good faith.
Because of the selected nature (sampling) and other inherent limitation of both procedures and systems of internal control, there remains the unavoidable riskthat errors or irregularities, possibly significant, may not have been detected. Limited depth of evidence gathering including inquiry and analytical procedures andlimited sampling at lower levels in the organization were applied as per scope of work. DNV expressly disclaims any liability or co-responsibility for any decision aperson or an entity may make based on this Statement.

Statement of Competence and Independence
DNV applies its own management standards and compliance policies for quality control, in accordance with ISO/IEC 17021:2011 - Conformity Assessment
Requirements for bodies providing audit and certification of management systems, and accordingly maintains a comprehensive system of quality control, including
documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We
have complied with the DNV Code of Conduct1 during the assessment and maintain independence where required by relevant ethical requirements. This
engagement work was carried out by an independent team of sustainability assurance professionals. DNV was not involved in the preparation of statements ordata included in the Framework except for this Statement. DNV maintains complete impartiality toward stakeholders interviewed during the assessment process.

1

DNV Code of Conduct is available from DNV website (www.DNV.com)

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ⅰ. Introductioni.

About the fundraiser
Mitsui O.S.K. Lines, Ltd. (hereinafter, “MOL”) is one of the largest multimodal groups, which
has more than 130 years history, that meets diverse transport needs with one of the world’s
largest merchant fleets. As a full-line marine transport group, MOL operates around 800
diverse vessels. Specifically, MOL is developing the following businesses and services.
Dry Bulk Business ︓MOL’s dry bulker fleets has a full line up of general-purpose bulk
carrier for transporting various resources such as iron ore, coal andgrains, and has specialized carriers designed and constructed to meetthe specific characteristics, also provides flexible meeting various
trades around the world and high-quality transport services.
Energy Transport Business︓MOL contributes to a stable worldwide energy supply throughthe transport crude oil, refined petroleum products, liquefied chemical
products and liquefied natural gas (LNG), and the wind power energy
business, offshore businesses. Also, MOL is moving into new
businesses such as Floating equipment.
Product Transport Business︓MOL transports a broad range of products, from industrial
products to general consumer goods and automobiles, and provides
extensive logistics services, drawing upon its ocean shipping knowhow and specialized group companies to meet diversified logistics
needs.
Associated Business︓MOL’s expertise encompasses not only ocean shipping-related
businesses such as cruise ship, tugboat, land transport, warehousing,and maritime consulting services, but also travel, office building
leasing, and property management, as well as finance, trading,insurance, ICT systems, supporting a national oil stockpiling project,sales of nautical charts, and more.

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinionii.

Fundraiser’s initiatives for ESG/SDGs
The MOL Group aims to improve its corporate value over the long term by minimizing thenegative social impact of its business activities while striving to maximize its social value
through contributions to the SDGs and other efforts. For this purpose, MOL has newly
identified five “Sustainability Issues (Materiality)”, which are deeply connected withmanagement plan.

Table-1 Overview of MOL’s Sustainability Issues (Materiality)
Sustainability Issues (Materiality）

SDGs

Value-added transport services
Marine and global environmental
conservation
Innovation for development in marine
technology
Human resource cultivation andcommunity development
Governance and compliance to support
businesses＊Sustainability issue which Transition Finance is mainly related to is " Marine and global
environmental conservation "Page 7 of 43

Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinioniii. Fundraiser’s Environmental Initiatives
MOL established “MOL Group Environmental Vision 2.1” in June 2021, aiming for net zero
GHG emissions by 2050 with full-scale efforts of the group.
In the “MOL Group Environmental Vision 2.1”, MOL conducted the latest TCFD scenario
analysis, and efforts to understand the risk and opportunities to respond to climate change,
and take countermeasures. Based on the risks and opportunities extracted by the scenario
analysis, MOL will set “medium-to long-term goals” and “five initiatives to achieve the targets”
and accelerate its efforts to tackle environmental issues.
The “medium-to long-term goals” and "Five initiatives to achieve the targets" in the “MOL
Group Environmental Vision 2.1” are as follows.

“MOL Group Environmental Vision 2.1”
Medium- to long-term targets

1.

Deploy net zero emissions ocean-going vessels in the 2020s

2.

Reduce GHG emissions intensity by approximately 45% by 2035 (versus
2019*)

3.

With the concerted effort throughout the Group, achieve net zero GHG
emissions by 2050

Five initiatives to achieve the targets

1.

Adoption of Clean Alternative Fuels

2.

Enhancement of Energy-Saving Technologies

3.

Boost Operating Efficiency

4.

Building Business Models to Enable Net Zero GHG Emissions

5.

Expanding Low-Carbon and Decarbonization Projects throughUse of the MOL Group’s Concentrated Strengths

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

iv. About the Transition Finance Framework
In advancing “MOL Group Environmental Vision 2.1”, MOL is working with ambitious goals
for reducing GHG emissions in line with the GHG emission reduction targets complied by theInternational Maritime Organization (IMO), an international organization in the shipping
industry, and the Ministry of Land, Infrastructure, Transport and Tourism of Japan*1.

The MOL group will issue a “MOL Transition Linked Loan, hereinafter ‘MOL-TLL’”, which is
linked to the achievement of the target, loan conditions and other financial incentives,setting the ambitious GHG emission reduction target as a Sustainability Performance Target.
MOL believes that it will be an opportunity to disseminate MOL’s wide-ranging environmental
strategy initiative through the issuance of loans.
MOL has established the MOL Transition Finance Framework (hereinafter, “Framework”) inorder to carry out transition finance in a manner that conforms to the framework whichinternationally established.
The criteria which this framework specifically referred to is described in (3) of Section II
below.
*

1: “Roadmap to Zero Emissions from International Shipping” formulated in collaboration with IMO, theMinistry of Land, Infrastructure, Transport and Tourism of Japan, shipping, shipbuilding, and maritime
industries, research institutes, and public institutions. (Sponsor Japan Ship Technology Research Association)

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinionv.

Fundraiser’s Transition strategy for decarbonization(1)

Strategies by sector (industry) at the international/national /regional level

Figure-1 shows the outlines of IMO’s GHG emission reduction targets and their pathway. IMO
focuses on measures for emission reduction, by design and technology (reduction of fuelconsumption), improvement of operation efficiency technological innovation and fuelconversion (introduction of low-carbon/zero-carbon fuel) and various technologies.
IMO has set a target to reduce CO2 emissions per transport work, as an average acrossinternational shipping, by at least 40% by 2030 (short- and medium-term target), pursuingefforts towards 70% by 2050 (long-term target), compared to 2008.
In March 2020, MOL has
collaborated with the Ministry ofLand, Infrastructure, Transport andTourism of Japan, as well as theshipping, shipbuilding, and marine
maritime industries, research
institutes, and public institutions tocreate a “Roadmap to Zero Emission
from International Shipping”(Sponsored by Japan Ship

Technology Research Association).＊1
This roadmap shows Japan’s efforts

Figure-1 The GHG emission reduction targets and(international treaty formulation,technological development) in a manner

pathway of IMO International Maritime Organizationconsistent with the goals of the IMO.
MOL has set GHG emission reduction targets, including fuel conversion, as a low-carbon anddecarbonization strategy for its core businesses, based on international and national policies,
such as IMO and MLIT (Ministry of Land, Infrastructure, Transport and Tourism of Japan).

*1 Reference Figure: Roadmap to Zero Emission
from International Shipping from MLIT website
https: //www.mlit.go.jp/maritime/GHG_roadmap.html

Left figure: Overview of IMO Strategy
Right figure︓Timeline for the Introduction of Alternative Fuels and Technologies Used in Emission Pathways

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion(2) Transition strategies of the fundraiser
The MOL Group positions the activities to contribute to the above-mentioned IMO and the
MLIT GHG emission reduction target, and the activities aimed at achieving the target definedby “MOL Group Environmental Vision 2.1” and by SBTi certification to be acquired in the
future as transition strategies.
Figure-2 shows a conceptual diagram of the MOL Group’s Pathway to Net Zero Emissions
associated with medium- to long-term goals. The MOL Group has set a target to reduce
GHG emissions intensity by approximately 45% by 2035 (versus 2019). MOL applies SBTi
methodology to determine its EEOI reduction rate consistent with a scenario of Well-Below
2 ℃. In addition, Figure-3 shows an image of MOL Ocean-going Fleet Configuration by FuelType Going Forward from 2019 to 2050 and Milestones.
The MOL’s Group’s reduction rate is different from the IMO and the Ministry of Land,
Infrastructure, Transport and Tourism of Japan because the MOL Group's targets by 2035
are different from base year (2008) and target year (2030) set by the IMO and the Ministryof Land, Infrastructure, Transport and Tourism of Japan mentioned above. However, fromthe estimation results based on the SPT calibration results described later, it has been
confirmed that the MOL Group’s GHG emission intensity reduction target exceeds the targetsof IMO and the Ministry of Land, Infrastructure, Transport and Tourism of Japan.
In addition, the overview of MOL's environmental efforts, including climate change response,is disclosed on its website as " “MOL Group Environmental Vision 2.1”.

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Figure-2 Medium- to Long-term GHG Reduction Targets and the Pathway to Net Zero Emissions By 2050

Figure-3 Composition the MOL Ocean-Going Fleet by Fuel Type Going Forward and Milestones

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion(3) Governance of the fundraiser (for environmental management)
Figure-4 shows MOL's environmental governance organization.
MOL has established a climate change management system led by the Corporate Planning
Department, the Environment and Sustainability Strategy Department and the Technology
Innovation Division.
In addition, MOL's Environmental and Sustainability Committee, which is under theManagement Committee, promotes its efforts to address sustainability issues (materiality).

Figure-4 MOL's environmental governance organization

Issuer name: Mitsui O.S.K. Lines, Ltd.
Framework Name︓Mitsui O.S.K. Lines, Ltd. Transition Linked Finance Framework
Review provider’s name︓DNV Business Assurance Japan K.K.
Publication date of review publication: October 19, 2021

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ⅱ. Scope and Objectives
DNV has been commissioned by MOL to provide a pre-funding assessment on MOL’s Transition Linked
Loan ”MOL-TLL”. Our objective has been to implement an assessment on whether the MOL-TLL meetsthe criteria established on CTFH, CTFBG, SLLP and SLLGLs to provide a second party opinion on theeligibility of the MOL-TLL.
DNV, as an independent external reviewer, has identified no real or perceived conflict of interest
associated with the delivery of this second-party opinion for MOL.
In this report, no assurance is provided regarding the financial performance of the MOL-TLL, the valueof any investments in the loan, or the long-term environmental benefits of the transaction.

Standards/guidelines to be applied
No.

Standards/guidelines

Scheme owner

1.

Climate Transition Finance Handbook (CTFH)*1

International Capital Market Association(ICMA), 2020
Financial Services Agency of Japan,

2.

Basic Guidelines on Climate Transition Finance

Ministry of Economy, Trade and Industry(CTFBG)of Japan and Ministry of Environment of*1

Japan, 2021
3.

Sustainability Linked Loan Principles (SLLP)*2Loan Market Association (LMA) andothers, 2021

4.

Sustainability Linked Loan Guideline (SLLGLs)*2

Ministry of the Environment, 2020

*1 Climate Transition︓The concept of climate transition focuses principally on the credibility of anissuer’s climate change-related commitments and practices (Quoted from CTFH)*2 Sustainability-Linked Loan︓ Sustainability linked loans are any types of loan instruments and/or
contingent facilities (such as bonding lines, guarantee lines or letters of credit) which incentivise theborrower’s achievement of ambitious, predetermined sustainability performance objectives.
(Quoted from SLLP)

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Ⅲ.

Responsibilities of MOL and DNV

MOL has provided the information and data used by DNV during the delivery of this review. DNV’s
second party opinion represents an independent opinion and is intended to inform MOL and otherinterested stakeholders in the MOL-TLL as to whether the established criteria have been met, basedon the information provided to us. In our work we have relied on the information and the facts
presented to us by MOL. DNV is not responsible for any aspect of the nominated projects and assets
referred to in this opinion and cannot be held liable if estimates, findings, opinions, or conclusions areincorrect. Thus, DNV shall not be held liable if any of the information or data provided by MOL’s
management and used as a basis for this assessment were not correct or complete.

Ⅳ. Basis of DNV’s opinion
To provide as much flexibility for the issuer, MOL as possible, we have adapted our MOL-TLL
assessment methodologies, which incorporates the requirements of the CTFH, CTFBG, SLLP andSLLGLs, to create a MOL-TLL Eligibility Assessment Protocol (hereinafter, “Protocol”). Please refer to
Schedule-2.

The Protocol is applicable to MOL-TLL under the CTFH, CTFBG, SLLP and SLLGLs.

DNV, as an independent external reviewer, provides second party opinion according to the protocol.
Our Protocol includes a set of suitable criteria that can be used to underpin DNV’s opinion. The
overarching principle behind the criteria is that a Climate Transition Finance should “provide aninvestment opportunity with transparent sustainability credentials” and ”is important (as climatetransitions) through KPIs and SPTs, quantitative, pre-determined, ambitious, and regularly monitored
and externally validated and encourage the achievement of ESG (in terms of climate transitions) of
borrowers”

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

As per our Protocol, the criteria against MOL-TLL to be reviewed is grouped into the following
elements, represented by the CTFH, CTFBG, SLLP and SLLGLs:(1) Four common elements of CTFH and CTFBG (disclosure elements)
Principle one: Issuer’s climate transition strategy and governance
The financing purpose should be for enabling a fundraiser’s climate change strategy.
Principle two: Business model environmental materiality
The planned climate transition trajectory should be relevant to the environmentallymaterial parts of the fundraiser’s business model.
Principle three: Transition is science-based including targets and pathway
Fundraiser’s climate strategy should reference science-based targets and transition
pathways
Principle four: Implementation transparency
Market communication in connection with the offer of a financing instrument which has theaim of funding the fundraiser’s climate transition strategy should also provide transparenceof underlying investment program(2) Five elements of SLLP

*1

Principle one: Selection of Key Performance Indicators (KPIs).
The Borrower of a sustainability-linked loan should clearly communicate its overallsustainability objectives, as set out in its sustainability strategy, and how these relate to its
proposed SPTs. The KPI should be reliable, material to the Borrower’s core sustainability
and business strategy, address relevant ESG challenges of the industry sector and be undermanagement control.
Principle two: Calibration of Sustainability Performance Targets (SPTs).
The SPTs should be ambitious, meaningful and realistic. The target setting should be donein good faith and based on a sustainability improvement in relation to a predetermined
performance target benchmark.
Principle Three: Loan Characteristics.
The loan will need to include a financial and/or structural impact depending on whether theselected KPIs reach (or not) the predefined SPTs. The finance documentation needs torequire the definitions of the KPI(s) and SPT(s) and the potential variation of the SLL’s
financial and/or structural characteristics. Any fallback mechanisms in case the SPTs cannot
be calculated or observed in a satisfactory manner, should be explained.
Principle Four: Reporting:Borrowers should publish and keep readily available and easily accessible up to date
information on the performance of the selected KPI(s), as well as a verification assurance
report (see Principle 5) outlining the performance against the SPTs and the related impact
and timing of such impact on the loan’s financial and/or structural characteristics, with such

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

information to be provided to those institutions participating in the loan or to investors
participating in the loan at least once per annum.
Principle Five: Verification
The Borrower should have its performance against its SPTs independently verified by aqualified external reviewer with relevant expertise, at least once per annum. The
verification of the performance against the SPTs should be made publicly available.
*1

The Sustainability Linked Loan DNV Assessment Protocol consists of five requirements set under SLLP (2021) andincludes SLLGLs. This is based on the idea that SLLGLs was created in consideration of consistency with SLLP (2019),
and the idea that SLLGLs can be included by evaluating the requirements of SLLP (2021) since it is a standard in which
the contents are added/reviewed while following the requirements of SLLP (2019).

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ⅴ. Work Undertaken
Our work constituted a comprehensive review of the available information, based on theunderstanding that this information was provided to us by the issuer in good faith. In the pre-funding
verification, we have not performed an audit or other tests to check the veracity of the information
provided to us. After raising the funds, MOL plans to be verified by third part on information related to
SPT after raising funds.
The work undertaken to form our opinion included:i. Pre-funding assessment•

Creation of a MOL-specific Protocol, adapted to the purpose of the MOL-TLL, as describedabove and in Schedule-2 to this Assessment.

•

Assessment of documentary evidence provided by MOL on the MOL-TLL and supplemented
assessment by a comprehensive desktop research. These checks refer to current assessment
best practices and standards methodology;•

Discussions with MOL, and review of relevant documentation;•

Documentation of findings against each element of the criteria.

ii. Post-funding SPT assessment （*not included in this report）•

Interview with MOL management, and review of the relevant documentation;•

Field research and inspection (if necessary)•

Document creation of post-issuance verification result

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ⅵ. Findings and DNV’s opinion
DNV’s findings and opinion are as described in (1) and (2) below.
From the CTF-1 to 4 in (1) below are the findings and opinions of DNV against the disclosure elementsof the CTFH and CTFBG as Climate Transition Finance applied to MOL-TLL.
Please see Schedule-2 for details.

From the SLLP 1 to 5 in (2) below are the findings and opinions of DNV against the requirement of the
SLLP and SLLGLs as Sustainability (transition) Linked Loan*1 applied to MOL-TLL.
Please see Schedule-3 for details.
*1︓Loans with potential financial and structural changes linked to the achievement of future transition goals(1) Findings and opinions of DNV against the four common elements of the CTFH
and CTFBG (disclosure elements)
CTF-1

fundraiser’s climate transition strategy and governance-

MOL formulated "MOL Group Environmental Vision 2.1" in June 2021. In the "MOLGroup Environmental Vision 2.1", MOL has set five strategies as environmental
corporate strategies that are important for the business model based on identificationof risk and opportunity and scenario analysis using TCFD guidance. The "MOL Group
Environmental Vision 2.1" shows transition strategy and pathway/trajectory as a
medium- to long-term target from 2021 to 2050 and as a pathway to MOL Group’s
Net Zero Emissions.

-

Based on the science-based evidence quantified by MOL Group, DNV reviewed andconfirmed that MOL's targets are aligned with the goals of the Paris Agreement.

-

The MOL Group's transition strategy incorporates environmental targets such as IMO
and the Ministry of Land, Infrastructure, Transport and Tourism of Japan, as well as
targets aimed at acquiring SBTi certification.

-

The MOL Group has established a system and mechanism to promote the transition
strategy, at the management level.

-

MOL Group has clarified its contributions to the SDGs, while minimizing the negative
impact (negative external effects) on society through business activities.

-

Based on the framework, "MOL Group Environmental Vision 2.1" and evaluation of
the implementation plan, DNV confirmed that they are well aligned with the MOLGroup’s transition strategy. DNV has confirmed that implementation plans based ontransition strategies are reliable, ambitious and achievable.

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

CTF-2

Business model environmental materiality-

Of the MOL Group's business activities, CO2 emissions (SCOPE-1) from ship
operations account for about three quarters of the total. KPI set by MOL-TTL focuseson the GHG reduction utilizing EEOI (see SLLP-1 below) which is defined by CO2emissions (SCOPE-1) generated by the ship operations.

-

The MOL Group's GHG emission reduction plan is set with optimal solutions thatexceed them and the possibility of further improvement, against the goals of theshipping industry set by IMO, the Ministry of Land, Infrastructure, Transport andTourism of Japan, etc.

-

DNV confirmed that the MOL Group's transition plan is the core business activity of
the MOL Group, which contributes to the environment and supports commercial
driving force. The MOL Group's planned transition strategies and transition pathway
are associated with the priority themes and materials defined by the MOL Group, andcontribute to important environmental improvement effects (impacts) from aqualitative and quantitative perspective.

CTF-3

Transition is science-based including targets and pathways-

The MOL Group has set a transition plan that is consistent with the Paris Agreement
based on science-based evidence, and a transition trajectory that is consistent withthe goals of IMO, the Ministry of Land, Infrastructure, Transport and Tourism ofJapan, etc., aiming to obtain SBTi certification.

-

DNV confirmed that MOL Group’s transition strategy is quantified based on consistentmeasurement methods, MOL seeks to obtain certification by SBTi once the maritime
sector criteria are available for validation.

-

DNV confirmed that the MOL Group’s transition strategy has been established as
milestones with short-term targets (mid-2020s), medium-term targets (2035) andlong-term targets (2050) that exceed the targets of IMO and the Ministry of Land,
Infrastructure, Transport and Tourism of Japan.

-

Approaches to reducing GHG emissions including SCOPE1-3 are considering in five
strategies in the “MOL Group Environmental Vision 2.1”. Among these, as a mediumterm target up to 2035, MOL has set a target value using EEOI as the GHG emission
intensity in transportation. Please see Schedule-1 for information on EEOI.

CTF-4

Implementation transparency-

DNV confirmed that the investment and deployment plans associated with MOLGroup's transition strategy include consensus building on future investment andexpenditure. As a specific example, MOL has an investment plan expected to be about
200 billion yen over the three years from 2021 to 2023 and about 1.6 trillion to 2
trillion yen* by 2030. (*Since these businesses includes chartered vessels andvessels shared with business partners, MOL's investment is expected to be halved.)

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion-

DNV also reviewed the framework and "MOL Group Environmental Vision 2.1" andconfirmed that the implementation was highly transparent and that the MOL Group
explained and agreed on the adequacy of the implementation.

(2) Findings and opinions of DNV against the five requirements *1 of the SLLP
*1

including SLLGLs

SLLP-1-

Selection of Key Performance Indicators (KPIs)
DNV has reviewed MOL sustainability KPI and confirmed that the chosen KPI is material
and relevant to the company’s core sustainability and business strategy.

-Core to MOL’s business strategy is to play the role of social infrastructure, which isindispensable for maintaining people’s activities through marine transportation services.
Core to MOL’s sustainability strategy is identified as five sustainability issues(materiality). Please see Table-1 in I (ii) for details.

-

Among these, the material KPI for MOL-TLL is GHG emissions reduction centered on
the Marine and global environmental conservation. Since share of the MOL's total GHG
emissions (Scope 1 to 3) from ship operations is approximately 75%,EEOI is highly
pertinent to choose as KPI. This is explained as three medium-to long-term targets andfive strategies in “MOL Group Environmental Vision 2.1”, being focused on emission
reduction from MOL’s own company and society toward Net Zero Emissions in 2050.

-

The chosen KPI is outlined in more detail in Schedule-1, and entails:•Energy Efficiency Operational Indicator (EEOI)
Unit︓g-CO2e(GHG)/mile/tonne

/

-

/

EEOI selected as the KPI is an indicator to measure the GHG emission performance ofship operations. EEOI is widely used in the shipping industry. The IMO guidelines
indicate that the use of EEOI is a recognized approach as a methodology for assessing
GHG emissions from the ships. In addition, MOL applies EEOI calculation formuladefined by SBTi maritime sector. This includes not only GHG emission from Scope1 ,but also the part of Scope3 emissions which are related to the production of the fossil
fuel combustion.

-

The KPI is of high strategic relevance for MOL now and for the foreseeable future tomeasure relative carbon intensity reduction of its shipping operations.

-

In terms of MOL’s broader business strategy, DNV acknowledges that reducing EEOI
will be a key driver of lowering operational costs for the vessel operation. As such, the
EEOI KPI will also contribute to both the environmental sustainability targets and MOL’s
business strategy.

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion-

DNV concludes that the EEOI KPI is measurable on a consistent methodological basis,
externally verifiable and able to be benchmarked to external references. DNV
concludes that EEOI is a robust and reliable metric to measure GHG emission reduction
for a vessel.

-

IMO’s Initial Strategy on reduction of GHG emissions from ships, adopted in 2018, canbe used as external reference to benchmark of MOL’s level of ambition. IMO statesthat the “carbon intensity of international shipping to decline”” by at least 40% by2030, pursuing efforts towards 70% by 2050, compared to 2008”. The Ministry ofLand, Infrastructure, Transport and Tourism of Japan's "Roadmap to Zero Emissions
from International Shipping (Ministry of Land, Infrastructure, Transport and Tourism ofJapan, etc.)" (Sponsored by Japan Ship Technology Research Association), which has
referenced to the IMO, sets goals that are consistent with the IMO.

-

MOL’s targets and the targets of IMO and the Ministry of Land, Infrastructure,
Transport and Tourism of Japan have different base years, but MOL has standardized
to directly compare the two based on past performance data and public information.
DNV therefore confirmed that KPI was properly set as an index that can be directlycompared with the targets of IMO and the Ministry of Land, Infrastructure, Transport
and Tourism of Japan.

-

DNV confirmed that the KPI (EEOI) chosen by MOL provides a clear evaluation scopeand calculation methodology. Please see Schedule-1 for more information.

SLLP-2-

Calibration of Sustainability Performance Targets (SPTs)
DNV confirmed that SPT supports the three medium-to long-term goals and five
strategies set forth in the “MOL Group Environmental Vision 2.1”, has goals that exceed
the goals of the IMO and the Ministry of Land, Infrastructure, Transport and Tourism ofJapan; and the target defined using SBTi methodology and has specific plans inherent.
DNV therefore confirmed that the SPT is ambitious, realistic and meaningful. DNV also
confirmed that the achievement of SPT is in line with MOL’s overall sustainability
strategy/ESG strategy.

-

Based on MOL's fleet configuration transition plan provided to DNV, DNV concludes that
SPT is realistic, the plan is feasible, and it is likely to achieve the SPT objectives outlinedin the framework. It was confirmed that the 45% reduction in EEOI by 2035 comparedto the 2019 baseline set by MOL, when converted to the baseline of IMO and the Ministryof Land, Infrastructure, Transport and Tourism of Japan, will exceeds the targets of IMO
and the Ministry of Land, Infrastructure, Transport and Tourism of Japan for the entire
period from 2019 to 2035. This target setting is expected to be a driving force for MOL's
efforts to implement its sustainability strategy.

-

DNV confirmed that the chosen SPTs represent a material improvement of the KPI. This
corresponds to a 43% reduction in 2030 vs. 2008 baseline. 43% EEOI reduction is more
ambitious than the 40% reduction targets of the IMO and Ministry of Land,
Infrastructure, Transport and Tourism of Japan and goes beyond “business as usual”.

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion-

DNV confirmed that the SPT target setting exercise has been based on an appropriate
combination of benchmarking approaches.
•

DNV confirmed that the framework provides guidance for target setting from2021 to 2035 by the KPI information, which is based on the appropriate data
and actual results, for more than three years from 2008 to 2020 by benchmarking approach.

•

DNV concludes that the SPT outlined go beyond the SPT of industry standard(target of IMO, Ministry of Land, Infrastructure, Transport and Tourism ofJapan, etc.)•

and SPT set by SBTi methodology.

DNV concludes that the SPT is put in an appropriate context of international
climate change mitigation efforts. The framework highlights MOL’s ambition
to “work on achieving the goals of the Paris Agreement”. The SPT can beseen as aiming to outperform IMO’s GHG emission reduction targets.
The broader purpose adopted by MOL is supported by the "MOL Group
Environmental Vision 2.1" with the following three medium- to long-termgoals and five strategies. This includes national goals, Best Available
Technology or other close technologies.

-

DNV has confirmed that the SPT target setting is properly disclosed as follows.
•

The timelines of SPT target achievement are clearly disclosed, at an annual
frequency leading up to 2035. MOL has set the corresponding target
observation dates for specified trigger events for each fiscal year. DNV
confirmed that the annual SPT is set over the entire maturity date of the loan.

•

The baseline for SPT is 2019 set in accordance with SBTi methodology using
the latest available data in terms of GHG. This is different from the baseline(2008) of IMO and the Ministry of Land, Infrastructure, Transport and Tourismof Japan, but it is standardized by MOL’s appropriate trial calculation
adjustment (intercomparison is possible).

•Through the framework and “MOL Environmental Vision 2.1”, it is explained indetail how the progress of EEOI reduction will be achieved. For details, please
see Table-2 and Table-3 in v (2) in section I of this report.

SLLP-3-

Loan Characteristics
DNV confirmed that trigger events, with corresponding target observation date(s) andperformance requirements under specific SPTs - as outlined in each specific loan issued
under the framework - will be linked to the achievement of the target, loan conditions
and other financial incentives.

-

DNV confirmed that MOL has examined an appropriate fallback mechanism, andconsequently MOL concluded that they would not set another SPT or calculation method
at this time since the risk of being uncalculated or unobservable is negligible.

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion-

MOL explained that as a future fallback mechanism, MOL may change the KPI and SPT
due to both/either external factors and/or MOL’s management decision result, such as
when the changes of MOL's business circumstances, change of business structures and
KPI where reasonable demonstration.

SLLP-4-

Reporting
DNV concludes that required information will be disclosed in a timely manner regarding
the following required by SLLP.
•KPI performance for the SPT: The information will be reported to lenders once a
year, in no later than 180 days after each fiscal year-end. This will be reported
annually until loan maturity. The final year's reporting timing will be determinedby discussions between the lender and the borrower.

•

SPT achievement status: Will be subject to annual verification from an
independent reviewer and it is used to determine financial characteristics (loanconditions or other financial incentives)•

In case SBTi or IMO targets change: Discuss the level of ambition of the SPT of
MOL with the lender and change it if necessary.

SLLP-5-

Verification
DNV confirmed that MOL plans to undergo independent validation of KPI-related data at
least once a year by qualified external evaluation agency with relevant expertise in SPT
trigger events.

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ⅶ Assessment Conclusion
On the basis of the information provided by MOL and the work undertaken, it is DNV’s opinion that the
MOL’s framework and MOL-TLL executed by the framework meet the disclosure elements andrequirements in the eligibility assessment protocol and that they are aligned with the stated definitionand purpose of Climate Transition Finance which is used as general corporate purpose (Sustainability
Linked Loan type) including asset financing which contribute to achieve the target.
“Climate Transition Finance provides an investment opportunity with transparent sustainability
credentials”” Climate Transition Finance is important (as climate transitions) through KPIs and SPTs,
quantitative, pre-determined, ambitious, and regularly monitored and externally validated andencourage the achievement of ESG (in terms of climate transitions) of borrowers”

DNV Business Assurance Japan K.K.
26th Oct. 2021

Mark Robinson

Jan-Henrik Hübner

Manager, Sustainability Services

Technical Expert

DNV Business Assurance, Australia

Global Head of Shipping Advisory

Shaun Walden

Naoki Maeda

Principal Consultant

Managing Director

DNV Business Assurance, UK

DNV Maritime, Germany

DNV Business Assurance Japan K.K.

Masato Kanedome

Yasuaki Miyamoto

Project Leader

Assessor

DNV Business Assurance Japan K.K.

DNV Business Assurance Japan K.K.

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

About DNV
Driven by our purpose of safeguarding life, property and the environment, DNV enables organisations to advance thesafety and sustainability of their business. Combining leading technical and operational expertise, risk methodology andin-depth industry knowledge, we empower our customers’ decisions and actions with trust and confidence. We
continuously invest in research and collaborative innovation to provide customers and society with operational andtechnological foresight.
With our origins stretching back to 1864, our reach today is global. Operating in more than 100 countries, our 16,000
professionals are dedicated to helping customers make the world safer, smarter and greener.

Disclaimer
Responsibilities of the Management of the Issuer and the Second-Party Opinion Providers, DNV: The management ofIssuer has provided the information and data used by DNV during the delivery of this review. Our statement represents
an independent opinion and is intended to inform the Issuer management and other interested stakeholders in the
Finance as to whether the established criteria have been met, based on the information provided to us. In our work wehave relied on the information and the facts presented to us by the Issuer. DNV is not responsible for any aspect of thenominated assets referred to in this opinion and cannot be held liable if estimates, findings, opinions, or conclusions areincorrect. Thus, DNV shall not be held liable if any of the information or data provided by the Issuer’s management andused as a basis for this assessment were not correct or complete

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Schedule-1 Key Performance Indicators (KPI) and Sustainability Performance Targets (SPT)KPI Key Performance Indicators

EEOI︓Energy Efficiency Operational Indicator Unit︓g-CO2e(GHG)/mile/tonne
MOL has selected the Energy Efficiency Operation Index (EEOI) as a KPI. The calculation method is shown in Equation-1. EEOI is an indicator tomeasure the CO2e(GHG) emission performance of ship operations. EEOI is widely used in the shipping industry, and IMO defines the calculation
method.

This is based on Guidance of SBTi Maritime Transport Sector. The data required for KPI evaluation is managed and evaluated by MOL's

internal process. The IMO guidelines indicate that the use of EEOI is a recognized approach as a methodology for assessing GHG emissions from theships.

/

・・・ Equation-1/

SPT Sustainability Performance Targets

MOL sets annual EEOI reduction rate year-on-year as SPT to achieve 45% EEOI reduction by 2035 relative to a 2019 baseline.
The annual EEOI target reduction rate (SPT) set by MOL is performed trial calculation adjustment that can be compared with the 2030 target and
2050 target (base year: 2008) set by the IMO in the GHG initial reduction. Figure-1 and Table-1 show the MOL’s EEOI target reduction ratecompared to the IMO target.

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Schedule-2 CLIMATE TRANSITION FINANCE ELIGIBILITY ASSESSMENT PROTOCOL
The checklists (1〜4) below are DNV evaluation procedures created for MOL-TLL eligibility assessment based on the disclosure requirements of CTFH andCTFBG.
The "confirmed documents" in the Work Undertaken include public or private documents (materials inside the issuer), etc., and are provided by MOL as
evidence of eligibility judgment for DNV.
*Please replace “Issuer”, “Investor” to “Borrower/Fundraiser”, “Lender” in the context in the following requirements

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1

Issuer’s Climate
Transition
Strategy andGovernance

The financing purpose should be forenabling an issuer’s climate change
strategy. A ‘transition’ label applied to a
debt financing instrument should serve tocommunicate the implementation of anissuer’s corporate strategy to transform thebusiness model in a way which effectively
addresses climate-related risks andcontributes to alignment with the goals of
the Paris Agreement.

Confirmed documents- Framework- “MOL Group
Environmental Vision
2.1”- GHG emission reduction
strategy of IMO,
Roadmap to Zero
Emission fromInternational Shipping of
Ministry of Land,
Infrastructure, Transport
and Tourism of Japan,etc.
- MOL REPORT 2021

MOL has established a framework and has introduced
various plans and initiatives to manage and enhance theenvironmental sustainability and related performance ofthe organization in the MOL Group’s broad environmental
strategy.

Suggested information and indicators••

A long-term target to align with thegoals of the Paris Agreement (e.g. theobjective of limiting global warming
ideally to 1.5℃ and, at the very least,
to well below 2℃);
Relevant interim targets on the
trajectory towards the long-term goal;

Interviews with stakeholders

Page 28 of 43

MOL formulated "MOL Group Environmental Vision 2.1" inJune 2021. In the "MOL Group Environmental Vision
2.1", MOL has set five strategies as environmental
corporate strategies that are important for the businessmodel based on identification of risk and opportunity andscenario analysis using TCFD guidance. In addition, as ameasure against climate change, the "MOL Group
Environmental Vision 2.1" shows transition strategy andpathway/trajectory as a medium- to long-term target
from 2021 to 2050 and as a pathway to MOL Group’s Net
Zero Emissions.
Based on the science-based evidence quantified by MOL
Group, DNV reviewed and confirmed that MOL's targets
aligns with the goals of the Paris Agreement.

Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ref.

Criteria

Requirements•••

Work Undertaken

Disclosure on the issuer’s levers
towards decarbonisation, and strategicplanning towards a long-term target toalign with the goals of the Paris
Agreement;
Clear oversight and governance oftransition strategy and,Evidence of a broader sustainability
strategy to mitigate relevant
environmental and social externalities
and contribute to the UN Sustainable
Development Goals.

DNV Findings
Specifically, the MOL Group's transition strategy
incorporates environmental targets such as IMO and theMinistry of Land, Infrastructure, Transport and Tourismof Japan, as well as targets aimed at acquiring SBTi
certification. In addition, MOL plans to review the efforts
required to achieve continuous emission reductions in the
future.
The MOL Group has established a system and mechanism
to promote the efforts stipulated in the “MOL Group
Environmental Vision 2.1”, including the transition
strategy, at the management level.
By maximizing social value, including contributions to theSDGs, while minimizing the negative impact (negative
external effects) on society through business activities,
the MOL Group has newly identified five “Sustainability
Issues (Materiality)” linked to the management plan inorder to improve medium and long-term corporate valueand has clarified which SDGs each contributes to.
Based on the framework, "MOL Group Environmental
Vision 2.1" and evaluation of the implementation plan,
DNV confirmed that they are well aligned with the MOLGroup’s transition strategy.
DNV has confirmed that implementation plans based ontransition strategies are reliable, ambitious andachievable.

2

Business model
environmental
materiality

The planned climate transition trajectoryshould be relevant to the environmentallymaterial parts of the issuer’s businessmodel, taking into account potential future

Confirmed documents- Framework

Page 29 of 43

DNV evaluated whether the major activities related to the
MOL Group's business activities correspond to the MOLGroup's transition strategy, which was evaluated ascontributing to the environment. Of the MOL Group's

Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ref.

Criteria

Requirements
scenarios which may impact on current
determinations concerning materiality.

Work Undertaken---“MOL Group
Environmental Vision
2.1”
GHG emission reduction
strategy of IMO,
Roadmap to Zero
Emission fromInternational Shipping of
Ministry of Land,
Infrastructure, Transport
and Tourism of Japan,etc.
MOL REPORT 2021

Interviews with stakeholders

3

Climatetransition
strategy to bescience-based
includingtargets andpathways

Issuer’s climate strategy should reference
science-based targets and transition
pathways. The planned transition trajectoryshould:•be quantitatively measurable (based ona measurement methodology which isconsistent over time);

Confirmed documents- Framework- “MOL Group
Environmental Vision
2.1”- GHG emission reduction
strategy of IMO,

Page 30 of 43

DNV Findings
business activities, CO2 emissions (SCOPE-1) from ship
operations account for about three quarters of the total.
KPI set by MOL-TTL focuses on the GHG reduction
utilizing EEOI (see SLLP-1 below) which is defined by
CO2 emissions (SCOPE-1) generated by the ship
operations, and this helps MOL mitigate the material
impacts to the climate change.
The MOL Group's GHG emission reduction plan is set andquantified in the absolute sense that it must meet thegoals of the shipping industry set by IMO, the Ministry ofLand, Infrastructure, Transport and Tourism of Japan,
etc., with optimal solutions that exceed them and thepossibility of further improvement.
DNV confirmed that the MOL Group's transition plan isthe core business activity of the MOL Group, which
contributes to the environment and supports commercial
driving force. The MOL Group's planned transition
strategies and transition pathway are associated with thepriority themes and materials defined by the MOL Group,and contribute to important environmental improvement
effects (impacts) from a qualitative and quantitative
perspective.
The MOL Group has set a transition plan that is consistent
with the Paris Agreement based on science-based
evidence, and a transition trajectory that is consistent
with the goals of IMO, the Ministry of Land,
Infrastructure, Transport and Tourism of Japan, etc.,
aiming to obtain SBTi certification.

Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ref.

Criteria

Requirements•••

be aligned with, benchmarked orotherwise referenced to recognized,
science-based trajectories where suchtrajectories exist;
be publicly disclosed (ideally inmainstream financing filings), include
interim milestones, and;be supported by independent assurance
or verification

Work Undertaken-

Roadmap to Zero
Emission fromInternational Shipping of
Ministry of Land,
Infrastructure, Transport
and Tourism of Japan,etc.
MOL REPORT 2021

Interviews with stakeholders

Suggested information and indicators
•

•
•
•
•

Short, medium, and long-term
greenhouse gas reduction targets
aligned with Paris Agreement;
Baseline
Scenario utilised, and methodology
applied (e.g. ACT, SBTi, etc.);
Greenhouse gas objectives covering all
scopes (Scope 1, 2 and 311); and,Targets formulated both in intensity
and absolute terms

DNV Findings
The plan is a realistic achievement and pathway for GHG
emission reduction in the absolute sense and a plan toreduce GHG emissions to absolute GHG emissions tomaintain defined levels in the future.
DNV confirmed that MOL Group’s transition strategy isquantified based on consistent measurement methods,
and in an absolute sense, it seeks to obtain specified SBTi
certification for sustainable GHG emission reduction “wellbelow the 2℃ target”. Also, DNV confirmed that the MOLGroup’s transition strategy has been established as
milestones with short-term targets (mid-2020s),
medium-term targets (2035) and long-term targets(2050) that exceed the targets of IMO and the Ministry ofLand, Infrastructure, Transport and Tourism of Japan.
Of the MOL Group's business activities, GHG emissions(SCOPE-1) from ship operations account for about threequarters of the total. The KPIs set in MOL-TLL focus on
reducing GHG emissions from ships and mitigate theimpact on climate change. In addition, approaches toreducing GHG emissions including SCOPE1-3 areconsidering in five strategies in the “MOL Group
Environmental Vision 2.1”. Among these, as a mediumterm target up to 2035, MOL has set a target value using
EEOI as the GHG emission intensity in transportation.
These are disclosed through the framework and “MOL
Group Environmental Vision 2.1”.

4

Implementationtransparency

Market communication in connection withthe offer of a financing instrument which
has the aim of funding the issuer’s climate

Confirmed documents- Framework

Page 31 of 43

DNV confirmed that the investment and deployment
plans associated with MOL Group's transition strategy
include consensus building on future investment andMitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ref.

Criteria

Requirements
transition strategy should also provide
transparency to the extent practicable, ofthe underlying investment program
including capital and operational
expenditure. This may include R&D-related
expenditure where relevant, and details of
where any such operating expenditure isdeemed ‘non-Business as Usual’, as well asother relevant information indicating how
this program supports implementation of
the transition strategy, including details ofany divestments, governance and processchanges.

Work Undertaken---

Suggested information and indicators••

Disclosure on the percentage ofassets/revenues/
expenditures/divestments aligned to
the various levers outlined in Element 1
above;
Capex roll-out plans consistent with theoverall strategy and climate science-“MOL Group
Environmental Vision
2.1”“MOL Group
Environmental Vision
2.1” (Briefing session Q &A summary)
GHG emission reduction
strategy of IMO,
Roadmap to Zero
Emission fromInternational Shipping of
Ministry of Land,
Infrastructure, Transport
and Tourism of Japan,etc.
MOL REPORT 2021

Interviews with stakeholders

Page 32 of 43

DNV Findings
expenditure. As a specific example, MOL plans tocontribute to the reduction of GHG emissions from own
company and the reduction of GHG emissions fromsociety through an investment of approximately 200
billion yen over the three years from 2021 to 2023. It
was confirmed that the MOL plans to implement the
future investment plan (investment amount) along thetimeline. In addition, the total amount including
investment in other business such as LNG fueled ships
and next-generation fueled ships is expected to be about
1.6 trillion to 2 trillion yen* by 2030. (*: Since thesebusinesses includes chartered vessels and vessels sharedwith business partners, MOL's investment is expected tobe halved).
DNV also reviewed the framework and "MOL Group
Environmental Vision 2.1" and confirmed that theimplementation was highly transparent and that the MOLGroup explained and agreed on the adequacy of theimplementation.

Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Schedule-3 Sustainability-Linked Loan Eligibility Assessment Protocol
Since MOL-TLL is executed as a General Corporate Purpose loan, which does not specify the use of proceeds, it is evaluated by applying the five elementsof SLLP required for eligibility evaluation of a loan that does not specify the use of proceeds defined by CTFH and CTFBG.
The checklist below (SLLP1〜5) is a DNV evaluation procedure created for the MOL-TLL eligibility assessment based on the requirements of SLLP.
The "confirmed documents" in the Work Undertaken include public or private documents (materials inside the issuer), etc., and are provided by MOL as
evidence of eligibility judgment for DNV.

SLLP-1 Selection of Key Performance Indicators (KPIs)
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1a

KPI – material
to coresustainability
and businessstrategy

The borrower’s sustainability
performance is measured using
sustainability KPIs that can be external orinternal. The KPIs should be material tothe borrower’s core sustainability andbusiness strategy and address relevant
environmental, social and/or governancechallenges of the industry sector and be
under management’s control. The KPIshould be of high strategic significance tothe borrower’s current and/ or future
operations;

Confirmed documents:- Framework“MOL Group
Environmental Vision
2.1”- MOL REPORT 2021
- IMO EEOI Guideline/12/MEPC.1/Circ.684- MOL EEOI EstimatedResults

DNV has reviewed MOL sustainability KPI and confirmed thatthe chosen KPI is material and relevant to the company’s coresustainability and business strategy.

It is recommended that borrowers
communicate clearly to investors therationale and process according to which
the KPI(s) have been selected and how
the KPI(s) fit into their sustainability
strategy.

Interviews withstakeholders

Core to MOL’s business strategy is to play the role of social
infrastructure, which is indispensable for maintaining people’s
activities through marine transportation services. Core to
MOL’s sustainability strategy is identified as five sustainability
issues (materiality).
•

Value-added transport services•

Marine and global environmental conservation•

Innovation for development in marine technology•

Human resource cultivation and community development•

Governance and compliance to support businesses

Among these, the material KPI for MOL-TLL is GHG emissions
reduction centered on the Marine and global environmental
conservation. This is explained as three medium-to long-termtargets and five strategies in “MOL Group Environmental Vision

Page 33 of 43

Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
2.1”, being focused on emission reduction from MOL’s own
company and society toward Net Zero Emissions in 2050.
This is clearly communicated in the framework associated with
MOL's sustainability strategy.
The chosen KPI is outlined in more detail in Schedule-1, andentails:•Energy Efficiency Operational Indicator (EEOI)
Unit︓g-CO2e(GHG)/mile/tonne
EEOI, which is selected as KPI, is an indicator to measure theCO2 emission performance of ship operations, which has beenformulated by the IMO. EEOI is widely used in the shipping
industry. In addition, the IMO guidelines indicate that the useof EEOI is a recognized approach as a methodology forassessing GHG emissions on ships. EEOI is calculated basedon the following indicators and formulas.

//

The KPI is therefore of high strategic relevance for MOL now
and for the foreseeable future to measure relative carbon
intensity reduction of its shipping operations. All elements
which make up the EEOI are under MOL’s management
control. The KPI is material, as GHG emission intensity

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
impacts MOL’s own value creation as well as external
stakeholders.
The scope of EEOI is also a key element, reaching beyond
scope 1 and including part of scope 3 emissions according to
SBTi methodology.
DNV believes that the focus on deploying one KPI will enable atargeted effort to deliver on MOL’s overarching
decarbonisation targets. The chosen KPI for emission
reduction aligns with MOL’s broader low carbonization anddecarbonisation aims and facilitates the incorporation of
tangible and transparent annual milestones that will facilitate
measurable and transparent implementation of the broader
MOL environmental sustainability strategy.
In terms of MOL’s broader business strategy, DNV
acknowledges that reducing EEOI will be a key driver of MOL’s
core business (maritime business). As such, the EEOI as KPI
will also contribute to both the environmental sustainability
targets and MOL’s business strategy.

1b

KPI Measurability

KPIs should be measurable orquantifiable on a consistentmethodological basis; externallyverifiable; and able to be benchmarked,
i.e. as much as possible using an externalreference or definitions to facilitate theassessment of the SPT’s level ofambition.
borrowers are encouraged, whenpossible, to select KPI(s) that they havealready included in their previous annual
reports, sustainability reports or otherConfirmed documents:- Framework“MOL Group
Environmental Vision
2.1”- MOL REPORT 2021
- GHG emission
reduction strategy of
IMO, Roadmap to
Zero Emission fromInternational Shippingof Ministry of Land,

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DNV concludes that the EEOI KPI is measurable on aconsistent methodological basis, externally verifiable and able
to be benchmarked to external references. DNV concludes
that EEOI is a robust and reliable metric to measure GHG
emission reduction for a vessel. The EEOI KPI is already anindustry standard for reporting on GHG emissions in the
shipping industry. The EEOI figures will be registered in the
MOL’s data collection system on fuel consumption and will
therefore be collected on a consistent methodological basis
and be externally verified. The KPI can therefore bebenchmarked to external references.

Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ref.

Criteria

Requirements
non-financial reporting disclosures toallow investors to evaluate historicalperformance of the KPIs selected. In
situations where the KPIs have not beenpreviously disclosed, borrowers should,
to the extent possible, provide historicalexternally verified KPI values covering atleast the previous 3 years.

Work Undertaken-

Infrastructure,
Transport andTourism of Japan, etc.
IMO EEOI Guideline
MEPC.1/Circ.684
MOL EEOI EstimatedResults

Interviews withstakeholders

DNV Findings
IMO’s Initial Strategy on reduction of GHG emissions fromships, adopted in 2018, can be used as external reference tobenchmark MOL’s level of ambition. IMO states that the“carbon intensity of international shipping to decline”” by atleast 40% by 2030, pursuing efforts towards 70% by 2050,
compared to 2008”. The Ministry of Land, Infrastructure,
Transport and Tourism of Japan's "Roadmap to Zero Emissions
from International Shipping (Ministry of Land, Infrastructure,
Transport and Tourism of Japan, etc.)" (Sponsored by Japan
Ship Technology Research Association), which has referenced
to the IMO, sets goals that are consistent with the IMO.
MOL’s targets and the targets of IMO and the Ministry of Land,
Infrastructure, Transport and Tourism of Japan have different
base years, but MOL has standardized to directly compare thetwo based on past performance data and public information.
DNV therefore confirmed that KPI was properly reset as anindex that can be directly compared with the targets of IMO
and the Ministry of Land, Infrastructure, Transport andTourism of Japan.

1c

KPI – Clear
definition

A clear definition of the KPI(s) should be
provided and include the applicable scopeor perimeter as well as the calculation
methodology

DNV confirmed that the KPI (EEOI) chosen by MOL provides aclear evaluation scope and calculation methodology. The EEOI
is calculated based on the data of Emission (gram-CO2e),emissions from ships (grams), Distance sailed (mile), Cargo
carried (tonne).
This is evaluated and reported for vessels that have been set
and managed in advance. EEOI is already an industry standard
and widely reported on, as outlined in 1b.

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

SLLP-2. Calibration of Sustainability Performance Targets (SPTs)
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

2aTargetSetting Meaningful

The SPTs should be ambitious, realistic andmeaningful to the borrower’s business andbe consistent with the issuers’ overall
strategic sustainability/ESG strategy

Confirmed documents:
Framework“MOL Group
Environmental
Vision 2.1”
MOL REPORT 2021
- MOL materials
Overview ofsustainability issues(materiality)- GHG emission
reduction strategy of
IMO, Roadmap to
Zero Emission fromInternational
Shipping of Ministryof Land,
Infrastructure,
Transport andTourism of Japan,etc.

DNV confirmed that SPT supports the three medium-to longterm goals and five strategies set forth in the “MOL Group
Environmental Vision 2.1”, has goals exceeds the goals of the
IMO and the Ministry of Land, Infrastructure, Transport andTourism of Japan; and the target defined using SBTi
methodology and has specific plans inherent. DNV therefore
confirmed that the SPT is ambitious, realistic and meaningful.
DNV also confirmed that the achievement of SPT is in line with
MOL’s overall sustainability strategy/ESG strategy.

Interviews withstakeholders

Page 37 of 43

Achievement of SPT is a necessary response to GHG emission
reduction, which is closely related to the environmental issuesof the shipping industry, and is meaningful for MOL’s Business.
MOL Group’s three medium-to long-term goals and five
strategies set out in the “MOL Group Environmental Vision 2.1”
will work toward net zero emissions by 2050, and SPT will be
provided as an annual goal until 2035 to measure progress.
Based on MOL's fleet configuration transition plan provided to
DNV, DNV concludes that SPT is realistic, the plan is feasible,
and it is likely to achieve the SPT objectives outlined in theframework. It was confirmed that the 45% reduction in EEOI
by 2035 compared to the 2019 baseline set by MOL, whenconverted to the baseline of IMO and the Ministry of Land,
Infrastructure, Transport and Tourism of Japan, will exceeds
the targets of IMO and the Ministry of Land, Infrastructure,
Transport and Tourism of Japan for the entire period from 2019
to 2035. Also, it is clear that the net zero emission by 2050 isambitious compared to the goals 70% emission reduction of the
IMO, Ministry of Land, Infrastructure, Transport and Tourism ofMitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
Japan, etc. This target setting is expected to be a driving force
for MOL's efforts to implement its sustainability strategy.

2b

TargetSetting Meaningful

SPTs should represent a material
improvement in the respective KPIs and be
beyond a “Business as Usual” trajectory;
where possible be compared to abenchmark or an external reference and be
determined on a predefined timeline, set
before (or concurrently with) the issuanceof the loan.

Confirmed documents:
Framework“MOL Group
Environmental
Vision 2.1”-

GHG emission
reduction strategy of
IMO, Roadmap to
Zero Emission fromInternational
Shipping of Ministryof Land,
Infrastructure,
Transport andTourism of Japan,etc.
MOL EEOI EstimatedResults
Interviews withstakeholders-

2cTargetSetting –benchmarks

The target setting exercise should bebased on a combination of benchmarking
approaches:

Confirmed documents:
Framework“MOL Group
Environmental
Vision 2.1”

Page 38 of 43

DNV confirmed that the chosen SPTs represent a material
improvement of the KPI. This corresponds to a 43% reduction
in 2030 vs. 2008 baseline. In order to achieve the SPT, an
overall 43% reduction goes beyond “business as usual”, as MOL
will not achieve the targets without the deployment of newtechnology introduction and construction such as theintroduction of net zero emission ocean-going vessels, theintroduction of about 90 LNG fueled vessels, and theintroduction of biodiesel fuel. Comparing MOL’s SPT for 2030 tothe external reference from IMO described under 1b, DNV
concludes that MOL’s target of 43% reduction vs. its own 2008
baseline is more ambitious than the envisaged -40% vs.
foreseen of IMO and Ministry of Land, Infrastructure, Transport
and Tourism of Japan etc. 2008 baseline, considering the targetof IMO and Ministry of Land, Infrastructure, Transport andTourism of Japan etc. The annual SPT for 2021〜2035 aredirect reflection of the projected EEOI’s under MOL’s fleet
configuration plan and operation efficiency, meaning that only afull implementation of the fleet configuration plan is expected toresult in meeting the annual SPTs.

DNV confirmed that the SPT target setting exercise has been
based on an appropriate combination of benchmarking
approaches:
1. DNV confirmed that the framework provides guidance forMitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ref.

Criteria

Requirements
1. The borrower’s own performanceover time for which a minimum of 3
years, where feasible, of
measurement track record on theselected KPI(s) is recommended andwhen possible forward-looking
guidance on the KPI
2. The SPTs relative positioning versus
the borrower’s peers wherecomparable or available, or versus
industry or sector standards
3. Systematic reference to sciencebased scenarios, or absolute levels(e.g. carbon budgets) or official
country/regional/internationaltargets or to recognised BestAvailable-Technologies or otherproxiesWork Undertaken-

GHG emission
reduction strategy of
IMO, Roadmap to
Zero Emission fromInternational
Shipping of Ministryof Land,
Infrastructure,
Transport andTourism of Japan,etc.
MOL EEOI EstimatedResults
Interviews withstakeholders

DNV Findings
target setting from 2021 to 2035 by the KPI information, which
is based on the appropriate data and actual results, for morethan three years from 2008 to 2020 by bench marking
approach.
2. DNV concludes that the SPT outlined go beyond the SPT ofindustry standard (target of IMO, Ministry of Land,
Infrastructure, Transport and Tourism of Japan, etc.) and SPT
set by SBTi methodology. highlighted in Ref 2b.
3. DNV concludes that the SPT is put in an appropriate context
of international climate change mitigation efforts. The
framework highlights MOL’s ambition to “work on achieving thegoals of the Paris Agreement”. The SPT can be seen as aiming
to outperform IMO’s GHG emission reduction targets.
The broader purpose adopted by MOL is supported by the "MOLGroup Environmental Vision 2.1" with the following three
medium- to long-term goals and five strategies. This includes
national goals, Best Available Technology or other closetechnologies.
“Medium- to long-term targets”
1.
2.
3.

Deploy net zero emissions ocean-going vessels in
the 2020s
Reduce GHG emissions intensity by approximately
45% by 2035 (versus 2019*)
With the concerted effort throughout the Group,achieve net zero GHG emissions by 2050

“Five initiatives to achieve the targets”

Page 39 of 43

1.

Adoption of Clean Alternative Fuels

2.

Enhancement of Energy-Saving Technologies

3.

Boost Operating Efficiency

Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ref.

2d

Criteria

Targetsetting –disclosures

Requirements

Work Undertaken

Disclosures on target setting should makeclear reference to:
1.

The timelines of target achievement,
the trigger event(s), and thefrequency of SPTs

2.

Where relevant, the verified baseline
or reference point selected for
improvement of KPIs as well as therationale for that baseline orreference point to be used

3.

Where relevant, in what situations
recalculations or pro-forma
adjustments of baselines will take
place

4.

Where possible and taking into
account competition andconfidentiality considerations, how
the borrowers intend to reach such
SPTs

DNV Findings
4.

Building Business Models to Enable Net Zero
GHG Emissions

5.

Expanding Low-Carbon and Decarbonization
Projects through Use of the MOL Group’s
Concentrated Strengths

DNV has confirmed that the SPT target setting is properly
disclosed as follows.
1.

2.

3.
4.

The timelines of SPT target achievement are clearly
disclosed, at an annual frequency leading up to 2035.
MOL has set the corresponding target observation dates
for specified trigger events for each fiscal year for MOLTLL issued under the framework, and it is necessary toprovide the lender with the timely SPT achievement
status. DNV confirmed that the annual SPT is set overthe entire maturity date of the loan.
The baseline for SPT is 2019 set in accordance with SBTi
methodology using the latest available data in terms of
GHG. This is different from the baseline (2008) of IMO
and the Ministry of Land, Infrastructure, Transport andTourism of Japan, but it is standardized by MOL’s
appropriate trial calculation adjustment (intercomparison
is possible)
Same as 2.
The framework provides sufficient information on how
EEOI reduction progress will be achieved, highlighting
how progress to date has been achieved and the likely
measures implemented to meet the EEOI trajectory
outlined leading up to 2035. These are explained indetail in the “MOL Group Environmental Vision 2.1”.

After review of MOL’s fleet configuration transition plan, DNVPage 40 of 43

Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
concluded that the SPTs are realistic and that the plan is viableand possible to meeting the SPT targets outlined in theframework.

SLLP-3. Loan Characteristics
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

3a

Loan
Characteristics – SPT
Financial/st
ructural
impactThe SLL will need to include a financial
and/or structural impact involving trigger
event(s) based on whether the KPI(s)reach the predefined SPT(s).

Confirmed document:- Framework
Interview withstakeholders

DNV confirmed that the inclusion of trigger event(s) under theframework is in line with the requirements outlined by SLLP.

Loan
Characteristics –
Fallback
mechanism

Any fallback mechanisms in case the SPTs
cannot be calculated or observed in asatisfactory manner should be explained.

Confirmed document:- Framework
Interview withstakeholders

DNV confirmed that MOL has examined an appropriate fallback
mechanism, and consequently MOL concluded that they would
not set another SPT or calculation method at this time since therisk of being uncalculated or unobservable is negligible.

3b

DNV confirmed that trigger events, with corresponding target
observation date(s) and performance requirements under
specific SPTs - as outlined in each specific loan issued under theframework - will be linked to the achievement of the target,
loan conditions and other financial incentives.

MOL explained that as a future fallback mechanism, MOL may
change the KPI and SPT due to both/either external factors
and/or MOL’s management decision result, such as when thechanges of MOL's business circumstances, change of businessstructures and KPI where reasonable demonstration.

borrowers may also consider including,where needed, language in the loan
documentation to take into consideration
potential exceptional events.

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Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

SLLP-4. Reporting
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

4aReportingborrowers of SLLs should publish, andkeep readily available and easily
accessible:

Confirmed document:- Framework
Interview withstakeholders

DNV concludes that required information, as required by SLLP,
will be published in a timely manner and kept publicly available:

1. Up-to-date information on theperformance of the selected KPI(s),including baselines where relevant
2. A verification assurance report
relative to the SPT outlining theperformance against the SPTs andthe related impact, and timing ofsuch impact, on the loan’s financial
and/or structural characteristics

1.

2.

3.

3. Any information enabling investors
to monitor the level of ambition of
the SPTs
This reporting should be publishedregularly, at least annually, and in any
case for any date/period relevant forassessing the SPT performance leading toa potential adjustment of the SLL’s
financial and/or structural characteristics.

Page 42 of 43

KPI performance for the SPT: The information will bereported to lenders once a year, in no later than 180
days after each fiscal year-end. This will be reported
annually until 2032. The final year's reporting timing
will be determined by discussions between the lenderand the borrower.
SPT achievement status: Will be subject to annual
verification from an independent reviewer and it is used
to determine financial characteristics (loan conditions orother financial incentives)
In case SBTi or IMO targets change: Discuss the level ofambition of the SPT of MOL with the lender and change
it if necessary.

Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework Second Party Opinion

SLLP-5. Verification
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

5aExternal
VerificationBorrowers should have its performanceagainst each SPT for each KPI
independently verified by a qualified
external reviewer with relevant expertise,at least once a year and for each SPT
trigger event.

Confirmed document:- Framework
Interview withstakeholders

DNV confirmed that MOL plans to undergo independent validation
of KPI-related data at least once a year by qualified external
evaluation agency with relevant expertise in SPT trigger events.

Page 43 of 43