East Japan Railway Company Sustainability Finance Framework Second Party Opinion

SECOND PARTY OPINION
EAST JAPAN RAILWAY COMPANYSUSTAINABILITY FINANCE FRAMEWORK

Prepared by: DNV Business Assurance Japan K.K.
Location: Kobe, Japan
Date: 5 December 2022
Ref. Nr.: PRJN-461128-2022-AST-JPN-01

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

Contents
EXECUTIVE SUMMARY

3

I. INTRODUCTION

7Ⅱ.

SCOPE AND OBJECTIVES

15

Ⅲ.

RESPONSIBILITIES OF EAST JAPAN RAILWAY COMPANY AND DNV

16Ⅳ.

BASIS OF DNV’S OPINION

17

V.

WORK UNDERTAKEN

18

Ⅵ.

FINDINGS AND DNV'S OPINION19

SCHEDULE-1 SUSTAINABILITY FINANCE, ETC. NOMINATED PROJECTS

33

Green Projects

33

Social Projects

35

SCHEDULE-2 SUSTAINABILITY FINANCE ELIGIBILITY ASSESSMENT PROTOCOL

36(1) Use of Proceeds

36(2) Process for Project Evaluation and Selection38(3) Management of Proceeds

39(4) Reporting

40

Revision history
Revision
number0

Date of issue
5/12/2022

Remarks
InitialDisclaimer
Our assessment relies on the premise that the data and information provided by Fundraiser 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 risk that errors or
irregularities, possibly significant, may not have been detected. Limited depth of evidence gathering including inquiry and analytical procedures and limited 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 a person or an entity may makebased 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 forbodies providing audit and certification of management systems, and accordingly maintains a comprehensive system of quality control, including documented policies andprocedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We have complied with the DNV Codeof 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 or data 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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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

Executive Summary
East Japan Railway Company was established in 1987 following the division and privatizationof Japan National Railways (JNR) and was the first of the seven JR companies, comprising six
passenger companies and a freight company, to become fully privatized in 2002. East Japan
Railway Company and its group companies (hereinafter, the "JR East Group") operatetransportation, retail & services, real estate & hotels, and other businesses under thefollowing group philosophy.
Group Philosophy•

We will earn the trust of our customers as a whole group by aiming for ultimate safetylevels as our top priority.
We will strengthen our network capabilities focusing on technologies and information,
and we are committed to helping our customers and people in communities to realize
affluent lives.

•

In 2018, East Japan Railway Company announced the JR East Group Management Vision"Move Up" 2027, to anticipate the changes in the business environment up to around 2027.
East Japan Railway Company will shift its starting point from “railway infrastructure basis” to“people” and create new value in the form of “trust” and “affluence” in cities, regions, andthe world at large over the next ten years.
The JR East Group has positioned energy as an important element in the implementation of
ESG management, which is the main initiative of "Move Up" 2027, and formulated the longterm environmental goal of "Zero Carbon Challenge 2050" in May 2020 for the realization ofa sustainable society and the sustainable growth of the Group. In July 2022, the JR East
Group formulated "Energy Vision 2027—Connect" as its energy strategy for the future.
In order to realize these measures, East Japan Railway Company decided to partly utilize
sustainability finance, etc. and has established the "East Japan Railway Company
Sustainability Finance Framework (hereinafter, the "Framework"), which is based on theprinciples and guidelines widely recognized in the green and social finance market as set out
below.
DNV Business Assurance Japan K.K. (hereinafter, "DNV"), as an external reviewer, evaluatedthe eligibility of the framework. Specifically, DNV provided the eligibility evaluation forframeworks, applying the relevant framework, primarily the Sustainability Bond Guidelines.
-

Sustainability Bond Guidelines (ICMA/2021, hereinafter SBG)
Green Bond Principles (ICMA/2021, hereinafter GBP)
Social Bond Principles (ICMA/2021, hereinafter SBP)
Green Bond Guidelines (Ministry of the Environment/2022, hereinafter GBGLs)
Social Bond Guidelines (Financial Services Agency/2021, hereinafter SBGLs)
Green Loan Principles (LMA, APLMA, LSTA/2021, hereinafter GLP)
Social Loan Principles (LMA, APLMA, LSTA/2021, hereinafter SLP)
Green Loan Guidelines (Ministry of the Environment/2022, hereinafter GLGLs)

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

The Framework is structured as an overarching framework that includes the elements
required for the implementation of the following finance (bond or loan).
-

Green finance (finance exclusively for green eligible projects)
Social finance (finance exclusively for social eligible projects)
Sustainability finance (finance exclusively for green and social eligible projects)

Sustainability (green and social) eligible projects for East Japan Railway Company will beselected and allocated from the table below.

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion(Executive Summary continued)
Table-1 Sustainability (green and social) eligible projects
Categ
ory

Green

GBP/SBP
Category

Project/eligibility criteria

CleantransportationOverall rail transportation (Sections of trains,
trains powered by electric battery or hybrid
train cars)

ClimateChangeResponse
RenewableenergySolar power generation, wind power
generationGreenbuildingGreen building development

Relevant main
environmental/social issues

Contribution
to the SDGs

Global warming
and climatechangeadaptation

Train cars＊

Available space for wheelchairs
passengers and accessible
restrooms for wheelchairpassengers
Affordable
basic
Railway Install platform doors
infrastructure facilities
 Install barrier free bathroom
Society in which Install elevators for platform
all people canSocioaccess by wheelchairplay active roles
Socialeconomic
passengers(realizing
improvement Pedestrian
accessible
 Install safe and comfortableandsociety)
walkwayspedestrian walkways
empowerme
network
including various types ofnt
open spaces, rest spaces
and lush excursion spaces
for pedestrians to socialize
and relax
The relevance to the SDGs is based on Green, Social and Sustainability Bonds: A High-Level Mapping to
the Sustainable Development Goals, published by ICMA, which sets out the Green Bond Principles, iscomplementary when issuing sustainability finance and is not directly associated with financing
objectives.

Principle One: Use of Proceeds:
East Japan Railway Company plans to define projects that meet the Sustainability Bond
Guidelines and other relevant principles in the Framework as sustainability (green andsocial) eligible projects and allocate the proceeds. These are projects that have a clear
environmental or social impact, as exemplified by SBPs, etc.
Principle Two: Process for Project Evaluation and Selection:
East Japan Railway Company confirms that the projects meet the project eligibility
requirements of Principle One, based on the established Sustainability Finance Framework.
Specifically, projects are evaluated and selected based on the decision-making criteria set
out in internal regulations and subject to internal approval procedures. These processes
are consistent with Principle Two.

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

Principle Three: Management of Proceeds:
East Japan Railway Company will manage the allocation of proceeds from thesustainability finance, etc. by the Finance and Investment Planning Department on aquarterly basis until the full amount has been allocated. Any unallocated proceeds will be
managed in cash or cash equivalents and will be fully allocated within approximately two
years of issuance. These procedures are consistent with Principle Three.
Principle Four: Reporting:
East Japan Railway Company will, at least until the allocation of proceeds, disclose
information relating to the allocation of proceeds, the progress of eligible projects and theactual or expected impact on environmental and social issues, on its website. These
procedures are consistent with Principle Four.

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

I. Introductioni.

About the Issuer
East Japan Railway Company (hereinafter, "JR East") was established in 1987
following the division and privatization of Japan National Railways (JNR) and was thefirst of the seven JR companies, comprising six passenger companies and a freightcompany, to become fully privatized in 2002.
JR East and its group companies (hereinafter, the "JR East Group") operate businessactivities include “Transportation”, “Retail and Services”, “Real Estate and Hotels”, and“Others” under the following group philosophy.

The JR East Group's business activities are as follows.
Table-2 Business activities of the JR East Group
Category
Transportation

Business Description
This business segment includes passenger transportation operations
centered around railway operations, as well as travel agency services,cleaning services, railway station operations, facilities maintenance
operations, railcar manufacturing operations, and railcar maintenance
operations.

Retail &This business segment forms part of what JR East refers to as its

Services“lifestyle services” business and includes retail sales and restaurant
operations, as well as a wholesale business, a truck transportation
business, and advertising and publicity.

Real Estate &This business segment forms part of what JR East refers to as its

Hotels“lifestyle services” business and includes shopping center operations,leasing of office buildings and other properties, hotel operations anddevelopment and sales of the real estate relating to these operations

OthersThis business segment represents categories of business that are notincluded in the aforementioned three segments, and includes the IT &Page 7 of 41

East Japan Railway Company Sustainability Finance Framework Second Party Opinion

Suica business, which includes credit card operations, and theinformation processing operations.
JR East set out the Group’s management vision “Move Up” 2027 in July 2018, to
implement a renewed growth strategy by staying ahead of the changes in thebusiness environment towards the fiscal year ending 31 March 2028. The Groupintends to change its business model from providing services focused on railway
infrastructure to creating people-focused values and services, and will aim to continue
to create the values of “Trust” and “Affluence” in cities, regional areas, and around theworld.

Figure-1 Basic policies of "Move Up" 2027
[Source: JR East News (3 July 2018) JR East Group Management Vision "Move Up" 2027]
ii.

Issuer’s Initiatives for ESG
The JR East Group aims to develop local communities and achieve the Sustainable
Development Goals (SDGs) by practising ESG management and solving social issues
through its business activities.
ESG Management: Environment (E)In May 2020, JR East formulated a long-term environmental objective of achieving net
zero*1 CO2 emissions in railway operations by 2051 (“Zero Carbon Challenge 2050”)

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

as a pillar of its ESG management practice and in October 2020 formalised thisobjective as the target of the Group. By pursuing this target, JR East Group will strive
to promote efforts to contribute to the realization of a “decarbonized society,” whileaiming to further improve of its environmental friendliness and realize a sustainable
society.
*1 “Net zero” refers to achieving effectively zero CO2 emissions by matching theamount emitted with the amount captured, reclaim, and use via leading-edge
technologies.
ESG Management: Society (S)JR East Group’s objective is to supply quality services to all customers, address andresolve local issues and achieve an affluent society.
Specifically, since its establishment, the Group has been focusing on realising railway
services with passengers can feel safe and comfortable, and has expanded Shinkansen
network as well as conventional lines in Kanto area network to make travel faster andmore convenient for passengers, which helps to enhance the value of the area along
railway lines.
The Group intends to expand its efforts further by introducing barrier free facilities atstations and in train cars and providing information in multiple languages, toaccommodate a diverse range of customers and realize an environment in which all
customers feel comfortable.
The Group intends to work on regional development and focus on how to revitalize
local areas. The Group intends to further expand its efforts in tourism and take on thechallenges of new measures, including local digital transformation (DX) such asprovision of mobility as a service (“MaaS”). These moves are part of the Group’s
initiative to promote regional revitalization by working with people in local
communities to provide optimal regional transportation.
The Group works to strengthen collaboration with communities, including throughmeasures such as development of large-scale stations while modernising areas aroundthe station through collaboration with local governments and residents to enhance theoverall value of the area, and collaborating with municipalities, business operators andother relevant entities in relation to town development focused on stations in coreregional cities.
Moving to the countryside has become one of the options for those who want tochange their workstyles with the expansion of DX and remote working. The Groupintends to promote work vacations projects and attractive urban development to meetthese needs.

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

As a new form of tourism, the Group will aim to create services that combine tourism
and agriculture. This new service will support agriculture which is a major regional
industry.

ESG Management: Governance (G)With regard to governance, the Group will aim to pursue the aforementioned
initiatives in as sustainable manner as possible. In addition, the Group will seek tocontinue to reduce potential risks with a view to achieving ultimate safety levels. Thisis the Group’s top priority in business management. The Group will also strengthen
compliance structures, and build governance structures that ensure the “safety” ofbusiness management itself.
Since the establishment of JR East, the Group has worked relentlessly to heighten its
levels of safety. The Group’s earnest efforts to learn from unfortunate accidents in thepast have enabled it to prevent future accidents with its continued developments inboth tangible and intangible aspects.
The JR East Sustainability Strategy Committee, chaired by the president andrepresentative director, oversees and makes decisions mainly regarding theestablishment and progress of climate change targets, and the management of risks
and opportunities. The committee includes the vice presidents, and executive directors
as well as full-time corporate auditors, and outside directors also attend its meetings.
The committee is held twice a year, and the Zero Carbon Working Group andHydrogen Working Group report and discuss the progress of CO2 emissions reductions
and hydrogen utilization.

iii. Issuer’s Environmental Initiatives
The JR East Group recognize energy as an integral part of the achievement of Zero
Carbon Challenge 2050 and the implementation of ESG management, and aims to
improve the "3E’s" (Environment, Economic Efficiency, and Energy Security) of theGroup’s energy network that integrates “Create”, “Deliver and Store”, and “Use” inorder to support the sustainable development of local communities. In July 2022, theJR East Group formulated "Energy Vision 2027—Connect," which presents the Group’s
energy strategy, which aims to realize a sustainable society and as a result to lead us
to continuous growth. The specific initiatives of Energy Vision 2027—Connect to bepromoted throughout the JR East Group are organized as follows.

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

Figure-２ Energy Vision 2027 Roadmap[Source: Extracted from JR East Group Energy Vision 2027]

iv. Issuers' Initiatives for SDGs
In respect of the existing 17 SDGs, while seeking to create value under “Move Up” 2027, theGroup will concentrate efforts on the realization of the following;➢Three top priority SDGs as the JR East Group consider it can leverage its businessstrength toward these goals:
8. Decent Work and Economic Growth;
9. Industry, Innovation and Infrastructure;
11. Sustainable Cities and Communities;➢

Second priority:
7. Affordable and Clean Energy;
12. Responsible Consumption and Production;
5. Gender Equality; and13. Climate Action.

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

Figure-3 Initiatives to achieve SDGs (Source: Extracted from JR East Report 2022)

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Table-3 Relationship between sustainability (green and social) projects and SDGs
Categ
ory

Green

GBP/SBP
Category

Project/eligibility criteria

CleantransportationOverall rail transportation (Sections of trains,
trains powered by electric battery or hybrid
train cars)

ClimateChangeResponse
RenewableenergySolar power generation, wind power
generationGreenbuildingGreen building development

Affordable
basic
infrastructure
Social*Socioeconomic
improvement
andempowermentTrain cars

Available space for wheelchairs
passengers and accessible
restrooms for wheelchairpassengers

Railwayfacilities

 Install platform doors
 Install barrier free bathroom
 Install elevators for platform
access by wheelchairpassengers
 Install safe and comfortablepedestrian walkways
including various types ofopen spaces, rest spaces
and lush excursion spaces
for pedestrians to socialize
and relax

Pedestrian
walkways
network

Relevant main
environmental/social issues

Contribution
to the SDGs

Global warming
and climatechangeadaptation

Society in which
all people canplay active roles(realizing
accessible
society)

The relevance to the SDGs is based on Green, Social and Sustainability Bonds: A High-Level Mapping to the
Sustainable Development Goals, published by ICMA, which sets out the Green Bond Principles, iscomplementary when issuing sustainability finance and is not directly associated with financing objectives.

v.

About the Sustainability Finance Framework
JR East has positioned part of the financing to realize Zero Carbon Challenge 2050 and"Move Up" 2027 initiatives as an opportunity to implement sustainability finance andcommunicate the initiatives of JR East and the JR East Group to its stakeholders. JR
East has established the East Japan Railway Company Sustainability Finance
Framework (hereinafter, "Framework") in order to carry out funds for in a mannerthat conform to the internationally recognized frameworks.
The framework has been made available for use in JR East's future implementation ofsustainability finance. The criteria which this framework specifically referred to is
described in (3) of Section II below.

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

Issuer Name: East Japan Railway Company
Framework Name: East Japan Railway Company Sustainability Finance Framework
Review Provider’s Name: DNV Business Assurance Japan K.K.
Date of Report: December 5, 2022

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Ⅱ.

Scope and Objectives

DNV has been commissioned by East Japan Railway Company to provide a pre-issuanceassessment on East Japan Railway Company Sustainability Finance Framework and theSustainability Finance. Our objective has been to implement an assessment on whether East
Japan Railway Company meets the SBG described below and other criteria such as GBP, SBP
and GBGLs to provide a second party opinion on its eligibility.
DNV, as an independent external reviewer, has identified no real or perceived conflict ofinterest associated with the delivery of this second-party opinion for East Japan Railway
Company.
In this report, no assurance is provided regarding the financial performance of thesustainability finance, the value of any investments in the sustainability finance, or the longterm environmental benefits of the transaction.

(1) Scope of review
The review assessed the following elements and confirmed their alignment with the gist of SBP:☒

Use of Proceeds☒

Process for Project Evaluation and Selection☒

Management of Proceeds☒

Reporting(2) Role(s) of review provider☒

Second Party Opinion☐

Certification☐

Verification☐

Rating☐Other (please specify):(3) Standards/guidelines to be applied
No.
1.
2.
3.

Standards/guidelines

Scheme owner

Applied level*1*2

Sustainability Bond Guidelines International Capital Market Association
Apply
(SBG)
(ICMA), 2021
International Capital Market Association
Green Bond Principles (GBP)
Apply(ICMA), 2021
International Capital Market Association
Social Bond Principles (SBP)
Apply(ICMA), 2021

5.

Green Bond Guidelines (GBGLs)

Ministry of the Environment, 2022

Apply

6.

Social Bond Guidelines (SBGLs)

Financial Services Agency, 2021

Apply

7.

Green Loan Principles (GLP)

Loan Market Association (LMA) et.al. 2021

Apply

8.

Social Loan Principles (SLP)

Loan Market Association (LMA) et.al. 2021

Apply

9.

Green Loan Guidelines (SLGLs)

Ministry of the Environment, 2022

Apply

10.

Climate Bonds Standard 3.0v
(Sector Criteria)

Climate Bonds Initiative, 2019

Refer (applicabletechnical criteria)

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

No.
11.

12.

Standards/guidelines
Green and Social Bonds: A
High-Level Mapping to the
Sustainable Development Goals
Handbook Harmonized
Framework for Impact
Reporting

Scheme owner

Applied level*1*2

International Capital Market Association
Refer(ICMA), 2022
International Capital Market Association
Refer(ICMA), 2020

*1 Apply: Eligibility for all four core common elements to each principle or guideline was assessed.
*2 Refer: Based on the green bond and implementation plans, relevant contents were partially considered.

Ⅲ.

Responsibilities of East Japan Railway Company and DNV

East Japan Railway Company has provided the information and data used by DNV during thedelivery of this review. DNV’s second party opinion represents an independent opinion and isintended to inform East Japan Railway Company and other interested stakeholders in thebond as to whether the established criteria have been met, based on the information
provided to us. In our work we have relied on the information and the facts presented to us
by East Japan Railway Company. DNV is not responsible for any aspect of the nominatedassets referred to in this opinion and cannot be held liable if estimates, findings, opinions, orconclusions are incorrect. Thus, DNV shall not be held liable if any of the information or data
provided by East Japan Railway Company’s stakeholders and used as a basis for thisassessment were not correct or complete.

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Ⅳ.

Basis of DNV’s Opinion

To provide as much flexibility for the fundraiser as possible, we have adapted our
Sustainability Finance assessment methodologies, which incorporates the requirements of
the SBG, GBP, SBP, GBGLs, SBGLs, GLP, SLP and SLGLs, to create an East Japan Railway
Company Sustainability Finance Eligibility Assessment Protocol (hereinafter, “Protocol”).
Please refer to Schedule-2. The Protocol is applicable to East Japan Railway Company
Sustainability Finance under the SBG, GBP, SBP, GBGLs, SBGLs, GLP, SLP and SLGLs.
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 the sustainability finance enables capitalraising and investment for new and existing projects with social and environmental benefits.
As per our Protocol, the criteria against which the sustainability finance has been reviewed
are grouped into four elements bellow.

•

Principle One: Use of Proceeds: The Use of Proceeds criteria are guided by therequirement that a fundraiser of a sustainability finance must use the funds raised toeligible activities. The eligible activities should produce clear environmental and social
benefits.

•

Principle Two: Process for Project Evaluation and Selection: The ProjectEvaluation and Selection criteria are guided by the requirements that an issuer of asustainability finance should outline the process it follows when determining eligibilityof an investment using sustainability finance proceeds, and outline any impact
objectives it will consider.

•

Principle Three: Management of Proceeds: The Management of Proceeds criteria
are guided by the requirements that a sustainability finance should be tracked within
the fundraising organization, that separate portfolios should be created whennecessary and that a declaration of how unallocated funds will be handled should be
made.

•

Principle Four: Reporting: The Reporting criteria are guided by the recommendationthat at least Sustainability Reporting to the finance fundraisers should be made of theuse of proceeds and that quantitative and/or qualitative performance indicators
should be used, where feasible.

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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 fundraiser in good faith. We
have not performed an audit or other tests to check the veracity of the information provided
to us. The work undertaken to form our opinion included:i. Pre-Fundraising Assessment of Sustainability Finance (Sustainability
Finance Framework)•

Creation of a fundraiser-specific Protocol, adapted to the purpose of the sustainability
finance, as described above and in Schedule-2 to this assessment;•

Assessment of documentary evidence provided by the fundraiser of the bond andsupplemented assessment by a comprehensive desktop research. These checks refer
to current assessment best practice and standards methodologies;•

Discussions with East Japan Railway Company, and review of relevant
documentation;•

Documentation of findings against each element of the criteria.

ii. Post-Fundraising Assessment of Sustainability Finance (*not included inthis report)•

Assessment of documentary evidence provided by the fundraiser after implementing
the sustainability finance and supplemented assessment by a comprehensive desktop
research;•

Interviews with East Japan Railway Company management, and review of relevant
documentation;•

Field research and inspection (if necessary);•

Post-issuance review of target projects and assets (update of the content described in
Schedule-1)•

Document creation of post-issuance observation results.

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

Ⅵ.

Findings and DNV's Opinion

DNV’s findings and opinion are as described below.
(1)

Use of Proceeds

DNV has confirmed that the East Japan Railway Company Sustainability Finance
Framework covers the following three types of finance, which are individually orcollectively positioned as sustainability finance, etc.
Table-4 Definitions of sustainability finance, etc. as defined in the Framework#

Category

Description

1

Green finance

Finance to fund projects that meet the Green Eligibility
Criteria (set out below)

2Social finance

Finance to fund projects that meet the Social Eligibility
Criteria (set out below)

3

Sustainability finance

Finance to fund projects that meet either the Green
Eligibility Criteria or the Social Eligibility Criteria

DNV has confirmed that East Japan Railway Company plans to allocate the net proceedsfrom sustainability finance, excluding expenses, as new investment and refinancing forthe construction, installation, operation and maintenance of any or more of the candidate
sustainability projects that meet the following representative eligible project categories,
as indicated by GBP, GBGLs, SBP and SBGLs.
-

Clean transportation
Climate change response
Renewable energy
Green building
Affordable basic infrastructure
Socio-economic improvement and empowerment

Specifically, these are the construction, installation, operation and maintenance of green
or social projects as shown in Tables 5 and 6.

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

Table-5 Green Projects#

Eligible
Category1

Cleantransporta
tion

Eligible Project
Overall railtransportation

Train cars

(Sections of
trains, trains
powered byelectric battery
or hybrid train
cars)

Eligibility Criteria
 Investments in relation to
manufacturing or renovation of traincars powered by electricity
 Investments in relation to
manufacturing or renovation of
hybrid train cars with CO2 emissions
below 50g-CO2/person-km or 25gCO2/ton-km
 Research and development of nextgeneration train cars such ashydrogen hybrid electric train cars

Railwayfacilities

 Investment (capital expenditure) and
expenses (operating expenditure) forthe maintenance, renovation or
renewal of railway equipment, tracks,
signals, station buildings, rail yards
and other essential facilities forrailway operations

Railwayfacilities

 Investment in disastercountermeasures for railway facilities(capital expenditure) to control
damage and maintain stable
operations during disasters such as
typhoons.

2

ClimateChangeResponse

Same as above(Overall railtransportation)

3

Renewable energy

Solar power generation,wind power generation

 Expenditure related to theconstruction, installation, operationor maintenance of, or the financial
investment in, solar or wind power
generation equipment.

4

Green
buildingGreen buildings and related
land acquisition business

Projects that include buildings thatmeet Green Building Eligibility Criteria
A or Green Building Eligibility Criteria
B, each as set out below (excluding
the acquisition of land with remaining
environmental problems including soil
and water pollution):＜Green Building Eligibility Criteria A＞
A building that has obtained orPage 20 of 41

East Japan Railway Company Sustainability Finance Framework Second Party Opinion#

Eligible
Category

Eligible Project

Eligibility Criteria
renewed any of the following building
certifications within 36 months prior to
the launch of the relevant
Sustainability Finance, or a building
which is expected to obtain or renew
the following building certifications in
the future S or A ranked CASBEE (cf the
Glossary bellow) construction (new,existing or renewed) or CASBEE
real estate (including CASBEE
issued by local municipalities）
 Platinum or Gold certified under
LEED (cf the Glossary bellow) BD+C（Building Design andConstruction） or LEED-O+M(Building Operations andMaintenance）
 Five star or Four star construction
under BELS（cf the Glossary
bellow ） Five star or Four star construction
under DBJ Green Building
Certification (cf the Glossary bellow)＜Green Building Eligibility Criteria B＞
A building that has a CO2 reduction
effect greater than the mandatory
reduction rate for standard emissions
set by government or local authorities
in the most recent fiscal year andeither (a) achieves a top 15% CO2
reduction performance in the area
where the project is located or (b)achieves a 30% CO2 reduction effect.

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Use of Proceeds categories as per GBP☒

Renewable energy☐

Energy efficiency (energy saving)☐

Pollution prevention and control☐

Sustainable management of living natural☐

Terrestrial and aquatic biodiversity☒

Clean transportation

resources
conservation☐

Sustainable water management☒

Climate change adaptation☐

Eco-efficient products, production☒

Green buildings with regional, national or

technologies and processes

internationally recognized standards andcertifications☐

Other (please specify):☐

It is undecided at the time of fundraising, but is expected to be in line with the GBP/GLP
classification or other eligible areas not listed in the GBP/GLP at this time.

Table-6 Social Projects#

SBP Category1

Affordable basic

Project Eligibility Criteria
Train cars

infrastructure

2

3Socioeconomic
improvement andempowerment

Railwayfacilities

Target Population

 Available space forwheelchairs passengers

Persons with

 Accessible restrooms forwheelchair passengers

Senior Install platform doors

Children and Install barrier free bathroom

families with

 Install elevators for platform
access by wheelchairpassengers

childrenPedestrian Install safe and comfortable
walkways pedestrian walkways including
networkvarious types of open spaces,
rest spaces and lush excursion
spaces for pedestrians tosocialize and relax

disabilities
Pregnant

All railway users
including above
Local companies
Residents
All facility users
including above

DNV assessed the appropriateness of the social project and its eligibility criteria throughin-depth interviews and the sharing of documentation and information, as this social
project can be seen as an initiative to meet the requirements of the Act on Promotion of
Smooth Transportation, etc. of Elderly Persons, Disabled Persons, etc. (Barrier Free
Act)(*1) As a result of the assessment, DNV determined the eligibility of the social project

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

as stipulated in the framework by East Japan Railway Company based on the rationale
set out in paragraphs a-c below.
(*1) Initiatives that meet the requirements of existing laws, regulations and ordinances on which
the implementation of the project is based, or those that are judged as Business As Usual(BAU), are not generally recognized as eligible social projects. (However, this may not apply
if the project includes responses to social issues that could not be covered by conventional
initiatives or to new social issues, such as responses to newly enacted laws, regulations andordinances, or if the project is clearly judged as beyond BAU.)

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

a. Relevance to the SDGs
Each project relates to public transportation and the surrounding environment, and isconsidered as essential foundation for realizing a society where no one is left behind,which is the basic principle of the SDGs, and is closely related to the following issues
among the eight priorities set out by the Government.
⚫

⚫

⚫

People: Infection Control and Building a Foundation for the Future(1) Realization of gender equality and a society where every person can play
an active role(2) Achievement of good health and longevity
Prosperity: Virtuous Cycle of Growth and Distribution(3) Creating growth markets, revitalization of rural areas, and promoting
science technology and innovation
Planet: Contributing to the Future of the Earth(4) Sustainable and resilient land use, promoting quality infrastructure(5) Energy conservation and renewable energy, disaster risk reduction andclimate change countermeasures, sound material-cycle society(6) Conservation of biodiversity, forests, and oceans, and other environments(Note) Extracted from the Japanese Government's "SDGs Action Plan 2022" with underlined
bold characters indicating areas where the eligible social projects identified by East
Japan Railway Company are relevant and are expected to make a particular
contribution

b. Current social situation, etc.
In view of the rapidly declining birth rate and aging population in Japan, which are
the background to the enactment of the Barrier Free Act, it is considered that there
is an urgent need for accessible public transportation, etc. However, as the demandfor public transportation is on the decline due to the impact of the coronavirus
disease and there are many uncertainties regarding the future situation, urgent
realization of accessibility is needed in consideration of post-pandemic society, which
may be a significant burden for railway business operators.

c. Eligibility criteria beyond compliance
The eligibility criteria for pedestrian networks should include open spaces, a varietyof rest spaces, green spaces, etc. and go beyond compliance (to the best effort set
out by the law).

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion(2)

Process for Project Evaluation and Selection

Through the review, DNV has confirmed that the three nominated sustainability projects
listed in Schedule-1 are in compliance with the goals of the JR East Group's management
vision "Move Up” 2027, the "Energy Vision 2027—Connect" based on the vision, and thelong-term environmental goal "Zero Carbon Challenge 2050", which are related to cleantransportation/renewable energy/green buildings and climate change adaptation, etc.
contributing to CO2 emission reduction, and that they are evaluated and selected throughappropriate prescribed processes at the Finance & Investment Planning Department andrelevant internal departments of the fundraiser.
As for the environmental and social impact of investments and business operations,
under the management of the Corporate & Legal Strategies Department, DNV has
confirmed that the Group company/department in charge of the project identifies andassesses risks in line with the company-wide risk management system before theimplementation of investment or business to reduce risks or take other measures where
necessary, and that a system has been established to ensure that proceeds ofsustainability finance, etc. are not allocated to projects related to the following:•Transactions that do not comply with the laws and regulations of the country inwhich they take place, including laws in relation to unfair business practices, bribery,corruption, extortion and embezzlement

Evaluation and Selection☒

Conforms to the issuer’s achievement of☒environmental contribution goals☒

fit within defined categories

The project is eligible for use of proceeds☐

by green bond and transparency is ensured☒

Documented process to determine that projects

The project is evaluated and selected based

Documented process to identify and manage
potential ESG risks associated with the project☐

Other (please specify):

on the published standard summary

Information on Responsibilities and Accountability☒

Evaluation / Selection criteria subject to☒In-house assessment

external advice or verification☐

Other (please specify):

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion(3)

Management of Proceeds

DNV has confirmed how JR East will track and manage the proceeds from fundraising toredemption/repayment period. DNV has confirmed that JR East plans to allocate theproceeds to financing (new investment and financing) and refinancing to the eligible
projects in a timely manner after raising the proceeds.
DNV has confirmed that the allocation status of the proceeds will be managed by the
manual on a quarterly basis in accordance with the JR East's internal manual. The
proceeds of sustainability finance, etc. will be managed in cash or cash equivalents until
they are allocated, and the allocation is expected to be completed within approximately
two years from the issuance.

Tracking of Proceeds:☒

Some or all of the proceeds by green bonds that are planned to be allocated are systematicallydistinguished or tracked by the issuer.

☐

Disclosure of intended types of temporary investment instruments for unallocated proceeds☐

Other (please specify):

Additional Disclosure:☐

Allocations to future investments only☒☒

Allocation to individual disbursements☐

Allocation to a portfolio of disbursements☐

Disclosure of portfolio balance of☐

Other (please specify): The amount of existing

Allocations to both existing and future
investments

unallocated proceeds

financing and new investments/financing in
projects eligible for green bond allocations will
be disclosed in the annual report.

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion(4)

Reporting

DNV has confirmed that JR East will report specific information related to sustainability
finance required by the GBP, GBGLs, SBP, and SBGLs in its website once a year.
Annual reports will be made on the allocation status of proceeds and the social andenvironmental benefits, as described below, until the proceeds are fully allocated. In
addition, a part or all of the following items related to social and environmental benefits
are planned to be disclosed on a project basis, within the limits of confidentiality and as
far as is reasonably practicable. Estimated indicator values and the progress of the
project will be disclosed until the commencement of the project. It is also planned todisclose any material changes in the projects during the redemption or repayment
period in a timely manner.

<Allocation Status>•

Allocated amount on a project basis•

Unallocated amount of proceeds•

Amount of proceeds allocated as refinancing<Environmental and Social Benefits>
Table-7 Green Projects#

Green
Category1

Cleantransportation

2

Eligible Projects

Examples of reporting content onenvironmental benefits

Overall railtransportation

CO2 emissions stemming from railway(Sections of trains,
trains powered byelectric battery or
hybrid train cars)<Train cars>

operations (g-CO2/person-km)

 Record of introducing train cars
 Energy-saving by using VVVF inverter,etc.
 Energy-saving by using LED lighting (vs.
conventional fluorescent lighting) Details of R&D investment<Railway facilities> Details of maintenance, renovation andrenewal of essential facilities to operate

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

#

Green
Category

Examples of reporting content onenvironmental benefits

Eligible Projects

railways, including tracks, signals, stationbuildings and rail yards
ClimateChangeResponse

Same as above(Overall railtransportation)<Railway facilities>

4

RenewableenergySolar power
generation, wind
power generation

 Overview of renewable energy project（Name of the project, location, output
capacity, etc.)
 Power generation (kWh) Impact of CO2 emissions reduction

5

Green
buildingGreen buildings andrelated land acquisitionbusiness＜Eligible Green Project A＞

3

 Details of investment in disastercountermeasure for the railway facility

 Overview of the building
 Type and rank of environmental
certifications obtained
 Primary energy consumption
 CO2 Emissions＜Eligible Green Project B＞
Overview of the building
CO2 reduction rate
Primary energy consumption
CO2 Emissions

Table-8 Social Projects#

SocialCategory

Eligible
Projects

Examples ofreportingcontent onsocial benefits

Outcome

Impact1

Affordable
basic
infrastructure

Train cars

 Number oftrain cars
introduced
 Number of cars
with space forwheelchairs
 Number of cars
with barrierfree bathrooms

 Ensuremobility
opportunities
for thesociallyvulnerable
 Improvesafety andcomfort forContribute to therealization of atruly symbiotic
society bypromotingbarrier-freeaccessSocioeconomic
improvement
andempowerment

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

2

Railwayfacilities

 Number ofstations withplatform doors
 Number ofstations withbarrier-freebathrooms
 Number ofstations withelevators

3

Pedestrian・ Overview ofpedestrian
network facilities

walkways
network

all railway
users

・ Improvesafety andcomfort for
local
companies,
residents andSustainable andresilient national
land (promoting
sustainablecommunity
development)users
Use of Proceeds reporting:☒

Project-by-project☐

On a project portfolio basis☐

Linkage to individual bond(s)☐Other (please specify):

Information reported:☐☒

Allocated amounts

GB financed share of total investment☒

Other (please specify): Unallocated amount of proceeds and the amount allocated to refinancing

Frequency:☒

Annual☐Other (please specify):☐

Semi-annual

Impact Reporting (Environmental benefit):☒

Project-by-project☐

On a project portfolio basis☐

Linkage to individual bond(s)☐Other (please specify):

Frequency:☒

Annual☐Other (please specify):☐

Semi-annual☐

Energy savings

Information reported (expected or ex-post):☒

GHG Emissions / Savings

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion☒

Other ESG indicators (please specify):

Capacity (kW) and amount of power generation (kWh) by
the renewable energy type subject for allocation, and theenvironmental benefits of rail transport in general

Means of Disclosure☐

Information published in financial report☐

Information published in sustainability report☐

Information published in ad hoc documents☒

Other (please specify): East Japan Railway☐

Reporting reviewed (if yes, please specify which parts of the reporting are subject to external

Company web site
review): Review by DNV will be obtained before one year has passed since the green bond issuanceand annually thereafter until the sustainability finance, etc. has been allocated.

(5)

External Review

In order to increase certainty (consistency) and objectivity that the sustainability financecontinuously complies with the relevant criteria, the fundraiser will obtain a review by
DNV before one year has passed since the implementation of the sustainability finance,
etc. and annually thereafter until the sustainability finance, etc. has been allocated.

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

Assessment Conclusion
On the basis of the information provided by JR East and the work undertaken, it is DNV’sopinion that the JR East meets the criteria established in the Sustainability Finance Eligibility
Assessment Protocol, and that it is aligned with the following stated definition or purpose ofsustainability bond within the SBG and relevant criteria, which is to "enable capital-raisingand investment for new and existing projects with social and environmental benefits".

DNV Business Assurance Japan K.K.
5 December 2022

Mark Robinson

Naoki Maeda

Manager, Sustainability Services

Managing Director

DNV Business Assurance, Australia

DNV Business Assurance Japan K.K.

Masato Kanedome

Kazumasa Terada

Project Leader

Assessor

DNV Business Assurance Japan K.K.

DNV Business Assurance Japan K.K.

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 Fundraiser and the Second-Party Opinion Providers, DNV : The management ofFundraiser 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 Fundraiser management and other interested
stakeholders in the Bond as to whether the established criteria have been met, based on the information provided to us.
In our work we have relied on the information and the facts presented to us by the Fundraiser. DNV is not responsible forany aspect of the nominated assets referred to in this opinion and cannot be held liable if estimates, findings, opinions, orPage 31 of 41

East Japan Railway Company Sustainability Finance Framework Second Party Opinion
conclusions are incorrect. Thus, DNV shall not be held liable if any of the information or data provided by the Fundraiser’s
management and used as a basis for this assessment were not correct or complete

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East Japan Railway Company Sustainability Finance Framework Second Party Opinion

Schedule-1 Sustainability Finance, etc. Nominated Projects
The green and social projects listed in the table are candidate projects before implementation of finance (as of November 2022). In the future, ingreen/social/sustainability finance executed under the JR East Sustainability Finance Framework, one or more of the eligible projects listed in
Schedule-1 will be selected and reported as the use of proceeds in a report before or after the implementation of finance. If the additional
green/social/sustainability projects are included, JR East will evaluate the eligibility in advance in a process based on the framework. If necessary,
DNV will conduct the evaluation in a timely manner.

Green Projects
No.

Green Eligible Project
Category

Project Overview

Small CategoryOverall railtransportation1
Cleantransportation(Sections of

Train
cars

trains, trainspowered byelectric battery or
hybrid train cars)

2

3



ClimateSame as above

Change(Overall rail

Responsetransportation)

Railwayfacilities
Railwayfacilities

Investments in relation to manufacturing or renovation oftrain cars powered by electricity
Investments in relation to manufacturing or renovation of
hybrid train cars with CO2 emissions below 50gCO2/person-km or 25g-CO2/ton-km
Research and development of next-generation train carssuch as hydrogen hybrid electric train cars
Investment (capital expenditure) and expenses (operating
expenditure) for the maintenance, renovation or renewalof railway equipment, tracks, signals, station buildings, rail
yards and other essential facilities for railway operations
Investment in disaster countermeasures for railway
facilities (capital expenditure) to control damage andmaintain stable operations during disasters such as
typhoons

Page 33 of 41

Expected Environmental
Contribution
Reduction of greenhousegas emissions from railway
operations

Response to climatechangeEast Japan Railway Company Sustainability Finance Framework Second Party Opinion

No.

4

Green Eligible Project
Category
RenewableenergyProject Overview

Small Category
Solar power
generation, wind
power generation



Expenditure related to the construction, installation, operation or
maintenance of, or the financial investment in, solar or wind power
generation equipment

Projects that include buildings that meet Green Building Eligibility Criteria
A or Green Building Eligibility Criteria B, each as set out below(excluding the acquisition of land with remaining environmental
problems including soil and water pollution):＜Green Building Eligibility Criteria A＞
A building that has obtained or renewed any of the following building
certifications within 36 months prior to the launch of the relevant
Sustainability Finance, or a building which is expected to obtain or
renew the following building certifications in the future S or A ranked CASBEE (cf the Glossary bellow) construction (new,5Green building

existing or renewed) or CASBEE real estate (including CASBEE issued
by local municipalities）
 Platinum or Gold certified under LEED (cf the Glossary bellow) BD+C（Building Design and Construction） or LEED-O+M (Building
Operations and Maintenance）
 Five star or Four star construction under BELS（cf the Glossary
bellow ） Five star or Four star construction under DBJ Green Building
Certification (cf the Glossary bellow)＜Green Building Eligibility Criteria B＞
A building that has a CO2 reduction effect greater than the mandatory

Page 34 of 41

Expected Environmental
Contribution
Reduction of greenhousegas emissions through the
adoption of renewableenergy sources
Reduction of greenhousegas emissions by improving
the efficiency of energy
used in buildings

East Japan Railway Company Sustainability Finance Framework Second Party Opinion

No.

Green Eligible Project
Category

Expected Environmental

Project Overview

Small Category

Contribution

reduction rate for standard emissions set by government or local
authorities in the most recent fiscal year and either (a) achieves a top
15% CO2 reduction performance in the area where the project islocated or (b) achieves a 30% CO2 reduction effect.

Social Projects
Social Eligible Project
No.

Category

Expected Social Contribution
Project Overview

Small
Category

Affordable basic
infrastructure

Railwayfacilities



Available space for wheelchairs passengers
Accessible restrooms for wheelchair passengers







Install platform doors
Install barrier free bathroom
Install elevators for platform access by wheelchairpassengers

Socioeconomic

improvement andempowerment
3

Contribution toSociety

Train cars1

2

Beneficiary

Pedestrian
walkways
network

Install safe and comfortable pedestrian walkways
including various types of open spaces, rest spaces
and lush excursion spaces for pedestrians tosocialize and relax

Page 35 of 41Persons withdisabilities
SeniorPregnant
Children andfamilies withchildrenAll railway users
including above
Local companies
Residents
All facility users
including above

 Ensuring
mobility
opportunities forthe sociallyvulnerable
 Improving safety

and comfort for
all railway users

East Japan Railway Company Sustainability Finance Framework Second Party Opinion

Schedule-2 Sustainability Finance Eligibility Assessment Protocol
The following checklists (1)～(4) are DNV assessment protocol developed for the East Japan Railway Company Sustainability Finance Eligibility
Assessment based on the requirements of the SBG, GBP, SBP and GBGLs. The "relevant document checked" in the Work Undertaken includes
internal documents, etc. of the fundraiser, which are provided by East Japan Railway Company to DNV as evidence for the eligibility judgment.
The East Japan Railway Company Sustainability Finance Framework and statutory documents listed in the table will be published separately as
investor explanatory documents.

(1) Use of Proceeds
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1aType offinance

The Sustainability Finance must fall in one of thefollowing categories, as defined by SBP and GBP.

Confirmed documents:- East Japan Railway Company
Sustainability Finance
Framework

Based on the documentation review andconsultations, DNV has confirmed that thefinance falls into the category below:- (Standard) Sustainability Finance- Sustainability Revenue Finance- Sustainability Project Bond
- Sustainability Security Finance
1b

Project
categories

The cornerstone of a Sustainability Finance is theutilization of the proceeds of the finance whichshould be appropriately described in the legal
documentation for the security.

(Standard) Sustainability Bond
Interviews with stakeholders
Confirmed documents:- East Japan Railway Company
Sustainability Finance
Framework
Interviews with stakeholders

Page 36 of 41

DNV has confirmed that the East Japan Railway
Company's sustainability projects, etc. identified
in the framework fall into the following
representative green and social eligible categories
as classified in the GBP and SBP.
<Green Projects>- Clean transportation (overall railtransportation)- Climate change response (overall railtransportation)- Renewable energy (solar power generation,wind power generation)

East Japan Railway Company Sustainability Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings- Green building<Social Projects>- Affordable basic infrastructure (train cars,
railway facilities, pedestrian walkways
network)- Socioeconomic improvement andempowerment

1c

Environment
al and social
benefits

All designated Sustainability Project categories
should provide clear greenly and/or social benefits,
which, where feasible, will be quantified or assessedby the fundraiser.

Confirmed documents:- East Japan Railway Company
Sustainability Finance
Framework
Interviews with stakeholders

1dRefinance
share

In the event that a proportion of the proceeds may
be used for refinancing, it is recommended thatfundraiser provide an estimate of the share offinancing vs. refinancing, and where appropriate,
also clarify which investments or project portfolios
may be refinanced.

Confirmed documents:- East Japan Railway Company
Sustainability Finance
Framework
Interviews with stakeholders

Page 37 of 41

DNV has confirmed that the green projects
contribute to the reduction of CO2 emissions fromrailway operations.
As for the sustainability project, DNV assessed it
as having sufficient benefits to improve social
issues as it enhances the convenience of public
transportation (railways) for a wide range ofrailway users, including the elderly andwheelchair users, taking into account thebackground to the enactment of the relevant
legislation (Barrier Free Act) and the actual
implementation state of accessible/universal
design.
DNV has confirmed that if the proceeds(excluding expenses) of sustainability finance,
etc. are used for refinancing, JR East will include
the allocation amount on a project basis and theamount allocated as refinancing in the disclosure
information on the allocation status published on
its website.

East Japan Railway Company Sustainability Finance Framework Second Party Opinion(2) Process for Project Evaluation and Selection
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

2aInvestment decision

The fundraiser of a Sustainability Financeshould outline the decision-making process it
follows to determine the eligibility of projects
using Sustainability Finance proceeds. This
includes, without limitation:

Confirmed documents:- East Japan Railway
Company
Sustainability Finance
Framework

DNV has confirmed that East Japan Railway Company
will select eligible projects for sustainability finance,
etc. in accordance with the framework and internal
regulations. Specifically, the procedure is as follows:

process・ A process to determine how the projects fit
within the eligible Sustainability (Green andSocial) Projects categories identified in the
Sustainability Finance Principles;
・ The criteria making the projects eligible forusing the Sustainability Finance proceeds; and・ The sustainability objectives for green andsocial2bFundraiser's
environmental andsocial governanceframework

In addition to criteria and certifications, theinformation published by fundraiser regarding
the Sustainability finance process is also
considered the quality of performance of thefundraiser's framework and environmental andsocial sustainability.

Interviews withstakeholders-

Confirmed documents:- East Japan Railway
Company
Sustainability Finance
Framework
Interviews withstakeholders

Page 38 of 41

The Finance and Investment Planning Department
selects eligible projects and the Director in chargeof Finance and Investment Planning gives
approvals.
In assessing the eligibility of the projects, acomprehensive analysis and consideration offinancial, technical, operational, and market
environment and ESG risks is undertaken.

DNV has confirmed, through the assessment in
documentation and interviews, that the plannedsustainability finance, etc. is in line with the East Japan
Railway Company's business and environmental
initiatives such as "Move Up" 2027, Energy Vision
2027—Connect, Zero Carbon Challenge 2050, etc., andis closely related to the business and environmental
sustainability.

East Japan Railway Company Sustainability Finance Framework Second Party Opinion(3) Management of Proceeds
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

3aTracking

Proceeds for funds raised through Sustainability
Finance should be managed in sub-accounts,
incorporated into sub-portfolios, or tracked byother appropriate means. They should also be
evidenced by the fundraiser in a formal internal
process related to the fundraiser's investment
and financing operations for sustainability
projects.

Confirmed documents:- East Japan Railway
Company Sustainability
Finance Framework

DNV has confirmed that East Japan Railway Company
manages the proceeds of sustainability finance, etc. in cash
or cash equivalents, and that the allocation status ismanaged by the Finance and Investment Planning
Department on a quarterly basis until the proceeds are fully
allocated. The system for managing the allocation status is
stipulated in the Sustainability Reporting Manual (internal
document).

In the period for which Sustainability Finance is
to be managed, the balance of the tracked
proceeds should be periodically adjusted byamounts matching eligible project investments orloan disbursements made during that period.

Confirmed documents:- East Japan Railway
Company Sustainability
Finance Framework

Pending such investments or disbursements toeligible Sustainability Projects, the fundraiser
should make known to investors the intended
types of temporary investment instruments forthe balance of unallocated proceeds.

Confirmed documents:- East Japan Railway
Company Sustainability
Finance Framework

procedure1

3b

Tracking
procedure2

3c

Temporaryholdings

Interviews withstakeholders

Interviews withstakeholders

Interviews withstakeholders

Page 39 of 41

DNV has confirmed that the allocation status of proceeds(allocated amount and balance) is managed and adjusted
according to the above procedure. DNV has also confirmedthat East Japan Railway Company plans to use the codes
registered in the accounting system to manage expenditureon eligible projects, track the allocation status in a separate
spreadsheet and manage the unallocated and allocatedproceeds on a quarterly basis using a balance sheet.
DNV has confirmed that East Japan Railway Company will
disclose the allocation status of proceeds and the progress ofprojects on its website on an annual basis until the proceedsof sustainability finance, etc. are fully allocated. The
disclosure includes the amount of proceeds allocated basedon a project, the allocated amount of proceeds and theamount allocated to refinancing.

East Japan Railway Company Sustainability Finance Framework Second Party Opinion(4) Reporting
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

4aPeriodical
reportingIn addition to reporting on the use of proceeds
and the temporary investment of unallocatedproceeds, fundraisers should provide at least
annually a list of projects to which Sustainability
Finance proceeds have been allocated including:Confirmed documents:- East Japan Railway
Company Sustainability
Finance Framework

DNV has confirmed that East Japan Railway Company will
provide annual reporting on specific items required bysustainability finance, etc. (e.g., allocation status ofproceeds, effectiveness of project improvements,
environmental benefits, indicators that may contribute toimproving social issues) until the proceeds are fully
allocated.
The reporting plans to disclose the following information as
far as practicable per eligible project category or per
eligible project.

- confidentiality and/or competitive
considerations, where possible;-a brief description of the projects and theamounts disbursed, as well as the expectedenvironmental and social sustainable impact

Interviews withstakeholders<Green Projects>- Record of introducing trains, trains powered by electric
battery or hybrid train cars
- Energy-saving by using VVVF inverter, etc. (designed
value)- Details of R&D investment (train cars)- Details of maintenance, renovation and renewal ofequipment essential for railway operations, and disastercountermeasures (railway facilities)- Overview of renewable energy project (Name of the
project, location, output capacity in kW, CO2 reductions)- Overview of green eligible building- Type and rank of environmental certifications obtained- Primary energy consumption, CO2 emissions
Other<Social Projects>- Record of introducing train cars

Page 40 of 41

East Japan Railway Company Sustainability Finance Framework Second Party Opinion

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings- Number of train cars with wheelchair spaces and barrier
free spaces- Number of stations with platform doors, barrier freebathroom and elevators- Overview of pedestrian network facilities
Other

Page 41 of 41