20-D-1032

December 28, 2020

Third-Party Opinion on Positive Impact FinanceEvaluation by Sumitomo Mitsui Trust Bank, Limited.
to Sumitomo Dainippon Pharma Co., Ltd.
Japan Credit Rating Agency, Ltd. (JCR) provided a third party opinion to Positive Impact Finance ("PIF") provided by
Sumitomo Mitsui Trust Bank, Limited (SMTB) to Sumitomo Dainippon Pharma Co., Ltd. ( Sumitomo DainipponPharma)<Executive Summary>This Third-Party Opinion examined the PIF ("the Finance") implemented by SMTB to Sumitomo Dainippon Pharma
on its suitability to the PIF Principles and the PIF Model Framework ("the Model Framework") for financial products
which allow borrowers not to limit the use of proceeds established by the United Nations Environmental Programme
Finance Initiative ("UNEP FI"). To ensure the transparency and objectivity of evaluation which are recommended in
PIF Principle 4, JCR, as an independent third-party organization, reviewed (1) the rationality of SMTB’s PIF
evaluation for Sumitomo Dainippon Pharma and the impacts related to the identified impact indicators; and (2)Compliance of SMTB's PIF evaluation framework and the Finance to PIF Principles.

(1) The rationality of SMTB's PIF evaluation for Sumitomo Dainippon Pharma and theimpacts related to the identified impact indicators
Sumitomo Dainippon Pharma is a global pharmaceutical company with strengths in the fields of psychoneurosis anddiabetes, mainly in Japan, North America and China.
In Psychiatry & Neurology area (global), Sumitomo Dainippon Pharma has a world-class position in sales anddevelopment pipeline numbers in the psychotic and neurological drug market, including LATUDA®, an atypicalantipsychotic drug that sells more than JPY 190 billion worldwide (4% global market share in 2018: USD 2.2 billion).
In Diabetes area (Japan), Sumitomo Dainippon Pharma has a broad lineup of products, including Trulicity®, withrevenue of JPY 30 billion, and Equa® and EquMet®, with revenue of JPY17.1 billion, and has established a top-level
position in the domestic market in this field (12% domestic market share in FY2019 : JPY 69.3 billion).
Sumitomo Dainippon Pharma with high unmet medical needs aims to become a global leader in the three focus
research areas (Psychiatry & Neurology, Oncology, and Regenerative Medicine / Cell Therapy), which strongly
influence healthy life expectancy. It is also working on the frontier business, where it can expect synergies with its
best-in-class drug development and pharmaceuticals business, which focus on values, and aims to establish its position
as a "Global Specialized Player" position in 2033.
Based on the Basic Environment Policies established by the Board of Directors, Sumitomo Dainippon Pharma has
formulated the three-year Mid-term Environmental Plan and Annual Implementation Plan. It intends to increase its
corporate value through evaluating the content of initiatives at the Environmental and Safety Committee to respond torisks and opportunities appropriately. In fiscal 2019, new environmental targets up to fiscal 2030 were formulated forrealizing a sustainable society.
Sumitomo Dainippon Pharma identified the material issues (materiality) in July 2018, which is an important issue for
its CSR-based management. As the initial process of identifying materiality, it gave a consideration on global society
issues and ESG trends with reference to SDGs, GRI guidelines, ISO26000, FTSE4Good, MSCI evaluation items, etc.,
and identify issues to be considered. The issues were narrowed down in light of the expectation of the stakeholders toSumitomo Dainippon Pharma, and these were classified and prioritized from the viewpoint of "Societal Significance"and "Importance to Sumitomo Dainippon Pharma’s Business". Materiality was updated in August 2019 based on the1/3
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Sumitomo Dainippon Pharma classified them into two categories: "Materiality linked to value creation (11 items),"
where solving issues is important for its sustainable growth, and "Materiality that forms the foundation for business
continuity (9 items)," where solving issues is essential for its sustained growth. The updates were resolved after
deliberation in the Management Committee and was shared with all the directors at the Executive Committee.
Details of the goals, management status, and results of Sumitomo Dainippon Pharma's sustainability initiatives can beseen in the Integrated Report, ESG Data Table, website, etc. The results of environmental, social, and economicinitiatives are disclosed through various media, and are readily available for stakeholders to monitor the results.
In this financing, a holistic analysis was conducted on the overall business activities of Sumitomo Dainippon Pharma,and individual impacts related to the three themes of "Development of innovative products and healthcare solutions,"“Contribution to global health, Improvement of healthcare infrastructure in developing countries and Initiatives toimprove access to medicines," and "Environmental Initiatives" were identified as the impacts to be monitored in lightof the organizational structure and activities related to sustainability described above for this financing, and impact
indicators (KPIs) were set for each.
Monitoring will be conducted on the above-mentioned KPIs of individual impacts relating to the three themes.
JCR checked the details of holistic analysis and the processes of identifying impacts for this financing in line with theitems indicated in the model and concluded that the analysis was properly conducted. The categories and KPIs
identified as impacts for this financing were selected in line with "Materiality linked to value creation" and"Materiality that forms the foundation for business continuity" in the Sumitomo Dainippon Pharma's materiality, and it
is expected that this financing will promote Dainippon Sumitomo Pharma's future efforts regarding the materiality.
As a result of examining the impacts based on KPI in accordance with the evaluation criteria exemplified in the PIF
Principles, JCR concluded that diversification, effectiveness, efficiency and additionality can be expected. The KPIs
are also appropriate in respect of the impact identification and sustainability activities described above. JCR also
concluded that the monitoring policy of the financing is appropriate in terms of the details of the impact identificationand the KPIs.
Based on the above, JCR concludes that the holistic impact analyses (impact identification, assessment, andmonitoring) on the Model Frameworks that captures the three aspects of SDGs (environment, society, and economy)
are fully utilized in the financing.

(2) Compliance of SMTB's PIF Evaluation Framework and the Finance to PIF Principles
JCR checked SMTB's product origination, method, and the establishment of internal regulations and structures as well
as PIF product origination for Sumitomo Dainippon Pharma in line with the PIF Principles, and evaluated that those
met all requirements.
Based on the above, JCR confirmed that the Finance complies with PIF Principles and the Model Framework.

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Important explanation of this third-party opinion
1. Assumptions, Significance, and Limitations of JCR Third-party opinions
The third-party opinion granted and provided by Japan Rating Research Institute (JCR) is a comprehensive opinion of businessentities and procurement entities regarding their compliance with the Positive Impact Financial (PIF) Principles formulated by
the United Nations Environmental Programme Finance Initiative, and do not fully indicate the extent of the positive impact ofthe positive impact finance.
This third-party opinion is a statement of opinion on the current plan or status based on information provided by the client, theprocurement entity and the business entity, and information independently collected by JCR, and does not guarantee positive
results in the future. In addition, this third-party opinion does not quantitatively demonstrate the positive effects of PIFs, anddoes not represent a commitment to the effects of PIFs. JCR confirms that the funds procured from this project are quantitatively
and qualitatively measured by a procurement entity or a third party commissioned by a procurement entity with respect to thedegree of achievement of the impact indicators set by the Company. However, in principle, JCR does not directly measure thedegree of achievement.
2. International initiatives, principles, etc. referenced in the preparation of this third-party opinion
In preparing this opinion, JCR refers to the following principles and guides developed by the United Nations Environment
Programme Finance Initiative.
Positive Impact Financial Principles
Positive Impact Finance Model Framework, which does not limit the use of funds
3. Relationship with Acts Related to Credit Rating Business
Providing this third-party opinion is undertaken by JCR as a related activity and does not constitute an activity relating to thecredit rating business.
4. Relationship with Credit Ratings
The Assessment differs from the Credit Rating and does not promise to provide or make available for inspection a predetermined
Credit Rating.
5. Third-party character of JCR
There are no capitals or human relationships that could cause conflicts of interest between the business entity or procurement
entity of the PIF and JCR.

■Disclaimers

The information contained in this document has been obtained by JCR from the Business entities or procurement entities and from accurate and reliable sources.
Provided, however, that such information may be erroneous due to human, mechanical or other reasons. Accordingly, JCR makes no representation or warranty,
express or implied, as to the accuracy, results, timeliness, completeness, marketability, or fitness for a particular purpose of such information, and JCR assumes noresponsibility for any error, omission, or result of using such information. In no event shall JCR be liable for any special, indirect, incidental or consequential
damages of any kind, including opportunity loss, monetary loss, which may arise from any use of such information, whether contractual, tort, negligence or othercause of liability, and whether or not such damages are foreseeable or unforeseeable. This third-party opinion does not express any opinion on various risks (creditrisk, price fluctuation risk, market liquidity risk, price fluctuation risk, etc.) related to positive impact finance, which is subject to the evaluation. This third-party
opinion is a comprehensive statement of opinion at the present time of JCR and is not a statement of fact and does not make any recommendations regarding risk
judgment or the decision to purchase, sell or hold individual bonds, commercial paper, etc. This third-party opinion may be changed, suspended, or withdrawn due tochanges in information, lack of information, or other reasons. All rights to this document are reserved by JCR. No part or all of this document may be reproduced,
translated, modified or otherwise altered without the permission of JCR.

■Glossary

Third-Party Opinion: This Report, at the request of the client, provides a third-party opinion on the conformity of the Bank's Positive Impact Financial Assessment
Report to the United Nations Environmental Programme Finance Initiative's Positive Impact Finance Principles from an independent, neutral and impartial
standpoint.
Business entities: Financial institutions that implement positive impact finance.
Procurement entities: Operating companies, etc. that borrow through positive impact finance for positive impact business.

■ Registration as an External Evaluator of Sustainable Finance・ Members of the United Nations Environment Programme Financial Initiative Positive Impact Working Group・ Ministry of the Environment's external green bond reviewer registration
・ Climate Bonds Initiative Approved Verifier (Climate Change Initiative Accreditation Verification Organization)
・ ICMA (registration as an observer with the International Association of Capital Markets as an external evaluator) Member of the Working Group on Principlesof Social Bonds■Status of registration as a credit rating agency, etc.
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posted on the JCR website (https://www.jcr.co.jp/en/).

Japan Credit Rating Agency, Ltd.

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