JCR Green Finance Evaluation
Last Updated: September 13, 2023

PrefaceGreen Bonds are debts whose use of proceeds is limited to the activities that positively contribute to theenvironment, such as taking measures for climate change, water resources and biodiversity. Specifically, thosebonds are issued by companies, local governments or other organizations with the following features: (i) the useof proceeds is allocated exclusively to green projects, (ii) proceeds are tracked and managed in a reliable mannerand (iii) transparency is ensured though reporting made after the issuance.1
In Japan, Ministry of Environment (hereinafter referred to as "MOE") published Green Bond Guidelines(hereinafter referred to as "Guidelines",) aiming to further spread green bonds by securing the credibility ofgreen bonds for environmental benefits and preventing greenwashing (not only green bonds but also otherfinancial products labeled as sustainable finance even though they do not actually provide any benefits to theoverall social environment) from being marketed.
In the Global Green Bond Principles2 (hereinafter referred to as "GBP") formulated by ICMA and the Guidelines
developed by MOE, it is recommended that issuers use the evaluation by other third parties since the objective
review by third party institutions is recognized as materiality regarding the alignment with GBP from theperspective of the healthy development of green bonds.
In 2018, Loan Market Association (hereinafter referred to as "LMA") and Asia Pacific Loan Market Association(hereinafter referred to as "APLMA") announced Green Loan Principles (hereinafter referred to as "GLP") for
loans with the purposes as same as those of GBP, and presentations were made in the ICMA annual meeting inthe same year to promote disseminating green bonds or green loans. In March 2020, MOE published Green Loan
and Sustainability Linked Loan Guidelines, reflecting the spread of green loans in the markets. MOE
subsequently revised the Green Loan and Sustainability Linked Loan Guidelines in 2022, strongly
recommending the external certification required by the latest Green Bond Principles be obtained, frameworks
be prepared by issuers and the green project categories be subdivided in the Attachment.
JCR initially included borrowings in the evaluation of the Green Bond Evaluation Methodology. JCR howeverchanged the name of the evaluation methodology to Green Finance Evaluation Methodology in June, 2019 while
simultaneously JCR's Green Bond Evaluation was implemented in accordance with the GBP for green bonds,
and JCR Green Loan Evaluation was carried out in conformity to the GLP for green loans (hereinafter, JCR
1 Refer to "Green Bond Guidelines in 2022 version" by MOE.
2 Green Bond Principles in 2018 version established by International Capital Market Association (hereinafterreferred to as "ICMA")

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Green Bond Evaluation and JCR Green Loan Evaluation are collectively referred to as JCR Green FinanceEvaluation.)
Green bonds must not only bring environmental benefits but also contribute to enhancing the long-term corporate
value of issuers and solving global issues. When ICMA's GBP was revised in 2018, the use of proceeds of green
bonds was mapped to those to which green bonds are contributable in 17 Sustainable Development Goals("SDGs"3) and 169 targets. JCR will take account of the degree of contributions to SDGs, based on the mapping
announced by ICMA when evaluating green finance. JCR will provide JCR Green Finance Evaluation as areview by other third parties to green bonds and green loans, reflecting the concept of GBP, GLP and Guidelines.
JCR has adopted high transparent evaluation systems, such as evaluation through scoring respective evaluation
factors in JCR Green Finance Evaluation with which issuers or borrowers4 (hereinafter referred to as "issuers
or others") can clearly grasp the improvements as green finance and investors also can precisely make better
decisions hereon.
In September 2019, JCR became the first approved verifier of Climate Bonds Initiative (hereinafter referred toas "CBI") in Japan and has started to provide verification reports to obtain Climate Bond Certification with green
bonds and green loans separately from JCR’s original Green Finance Evaluation since then. In verification
reports, JCR will verify the eligibility of Climate Bond in accordance with Climate Bond Standard, Taxonomy,
Sector Criteria and Climate Resilience Principles stipulated by CBI.
In JCR Green Finance Evaluation, JCR will refer to the Taxonomy, Sector Criteria and Climate Resilience
Principles of Climate Bonds Initiative as the approved verifier of CBI; however, JCR may present viewpoints
differently from CBI since Japanese specific environmental issues, industrial structures or energy mix should betaken into consideration. JCR aims to contribute to disseminating the knowledge on green finance,
growing/developing sound green finance markets and improving global environmental issues through providing
both of the JCR Green Finance Evaluation and the verification of Climate Bonds Certification.
JCR Green Finance Evaluation Methodology is described as follows:I

Evaluation Target
JCR Green Finance Evaluation is applicable to various financing tools, such as bonds or loans whose use ofproceeds are green projects exemplified in GBP, GLP and Guidelines. Industrial sectors or categories of thetarget issuers or others include:(1) Corporation, financial institutions, governments, local governments, international financial
institutions, government-sponsored enterprises(2) Project finance3 Sustainable Development Goals ("SDGs") are universal development goals adopted by UN Summit in 2015 to"leave no one behind" in both developed and developing countries

4 In evaluating green finance for SPCs' or Project Companies' financing, those issuers include sponsors or asset

management companies who are integrally involved in actual business operations.
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(3) Investment corporations(4) Asset-backed securities
In cases where an investment corporation and all of its assets fall under GBP and green projects exemplified in
Guidelines, investment equities may also be evaluated based on this evaluation method by applying mutatis
mutandis to GBP. Focal points in such case are set forth in "V. JCR's Key Consideration in This Factor."

II Basic Structure of JCR Green Finance Evaluation
JCR divides JCR Green finance Evaluation into the followings three phases.
In "Evaluation Phase 1," JCR conducts the Greenness Evaluation of the target bonds. In particular, JCR firstly
evaluates whether the target project is categorized into green projects. In cases where a project falls under green
projects, JCR evaluates the project, focusing on the use of proceeds (a percentage allocated to green projects.)
In "Evaluation Phase 2," JCR carries out "Management, Operation and Transparency Evaluation." JCR evaluates
whether (1) the management/operation systems and transparency of issuers or others are well developed; (ii)green projects will be certainly implemented or the use of proceeds will be definitely used as planned and (iii)the degree of disclosure in a series of processes (the certainty of realizing the aforementioned Greenness
Evaluation) is realizable.
In "Evaluation Phase 3," JCR comprehensively evaluates the project, adding Management, Operation andTransparency Evaluation to Greenness Evaluation and determines JCR Green Finance Evaluation.
JCR Green Finance Evaluation Flow

Phase 1:
Greenness
Evaluation

Phase 3:Overall Green FinanceEvaluation
Phase 2:
Management,
Operation andTransparency
Evaluation

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III Evaluation Framework in Each Evaluation Phase
1. Evaluation Phase 1: Greenness Evaluation
In this evaluation phase, in cases where the target business is categorized into a green project, JCR will confirm
the use of proceeds (a percentage allocated to the green project) and will evaluate the greenness of green financeon a scale of five from "g1" to "g5" as follows:
Percentage allocated to the proceeds of green projects

Greenness
Evaluation

100% - 90% (Almost all the proceeds are allocated to green projects)

g1

89% - 70% (Most of the proceeds are allocated to green projects)

g2

69% to - 50% (More than half of the proceeds are allocated to green projects)

g3

49% - 30% (Low amount of the proceeds are allocated to green projects)

g4

29% - 10% (Very low amount of the proceeds are allocated to green projects)

g5

Less than 10％

N/A

2. Evaluation Phase 2: Management, Operation and Transparency Evaluation
In this evaluation phase, JCR will evaluate the management, operation and transparency of issuers or others,
based on four evaluation factors regarding the management, operation and transparency provided by GBP, GLP
and Guidelines (please refer to IV. Evaluation Methodology.) The evaluation will be made on a scale of fivefrom "m1" to "m5" as follows:
Scores of Management, Operation and Transparency Evaluation

Evaluation

100-80 scores (the management and operational structure is well established and verytransparent. The implementation of projects and the allocation of proceeds inaccordance with the plan are significantly promising.)

m1

79-60 scores (the management and operational structure is in place and highly
transparent. The implementation of projects and the allocation of proceeds inaccordance with the plan are generally promising.)

m2

59-40 scores (there are some problems with the management and operation
structure and transparency and some concerns about the implementation ofprojects and the allocation of proceeds in accordance with the plan.)m3

39-20 scores (there are problems with the management and operation structure andtransparency and concerns about the implementation of projects and the allocationof proceeds in accordance with the plan.)m4Less than 20 scores (there are serious problems with the management andoperation structure and transparency and the implementation of projects andthe allocation of proceeds in accordance with the plan cannot be expected.)

m5

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3. Evaluation Phase 3: Overall Evaluation
In this evaluation phase, JCR will comprehensively evaluate the project (JCR Green Finance Evaluation) basedon Greenness Evaluation from g1 to g5, taking Management, Operation and Transparency Evaluation from m1
to m5 into consideration.
Specifically, JCR will make JCR Green Finance Evaluation from Green 1 to Green 5 in accordance with theundermentioned JCR Green Finance Evaluation Matrix.
Green 1 is the highest green finance evaluation in JCR Green Finance Evaluation, which is assigned to green
finance with the highest evaluation (g1+m1) in both Greenness Evaluation and Management, Operation andTransparency Evaluation.

[JCR Green Finance Evaluation Matrix]
Management, Operation and Transparency Evaluation

Greenness Evaluation

m1

m2

m3

m4

m5

g1

Green 1

Green 2

Green 3

Green 4

Green 5g2

Green 2

Green 2

Green 3

Green 4

Green 5

g3

Green 3

Green 3

Green 4

Green 5

N/A

g4

Green 4

Green 4

Green 5

N/A

N/A

g5

Green 5

Green 5

N/A

N/A

N/A

4. Presentation of JCR Green Finance Evaluation
JCR Green Finance Evaluation is mainly made on Overall Evaluation from Green 1 to Green 5, together with a
combination of Greenness Evaluation from g1 to g5 and Management, Operation and Transparency Evaluationfrom m1 to m5.

[JCR Green Finance Evaluation]

Overall
Evaluation

Greenness
Evaluation（Use of Proceeds）

Management,
Operation andTransparency Evaluation

Green 1 - Green 5

g1 - g5

m1 - m5

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IV Evaluation Methodology (Confirming, Evaluating and Scoring Evaluation
Factors)
1. Phase 1: Greenness Evaluation Factors
JCR confirms the following factors to evaluate greenness.
(i) JCR reviews whether the target project is categorized into green projects.
Review whether the target project falls under green projects(1) The proceeds financed with bonds or loans to be evaluated are allocated to green projects thatsatisfy the undermentioned requirements in addition to green projects illustrated in GBP, GLP and
Guidelines.)(2) The green project clearly has environmental benefits. It is obvious that the green project inquestion contribute to global objectives, such as SDGs, through the ICMA’s mapping.
(3) Environmental benefits obviously exceed environmental disadvantages (it is preferable that both
environmental benefits and disadvantage be evaluated quantitatively and comparable.)
The projects have no significant harm impacts on other green projects, do not always use only
technologies with fossil fuels, and aim to decarbonize or reduce carbon over time (Do No
Significant Harm Assessment.)(4) JCR takes six steps stipulated in CBI’s Climate Resilience Principles 5 when evaluating climatechange adaptation projects.
JCR evaluates whether climate resilience is taking into consideration by referring to the check
items in CBI’s Sector Criteria6 if any in climate change mitigation projects as well.
* In cases where the environmental disadvantages exceed the environmental benefits, such use of proceeds
may be out of evaluation although other evaluation factors' scores mark high.

(ii) JCR confirms the use of proceeds (a percentage allocated to green projects) in cases where thetarget project is catgorized as green projects.

2. Phase 2: Management, Operation and Transparency Evaluation Factors(i) Four major factors to be considered in management, operation and transparancy evaluation andtheir score distribution are as follows:

Major Evaluation Factors

Score Distribution

1. Appropriateness and Transparency concerning the Selection
Criteria and Processes of the Use of Proceeds

25%

2. Appropriateness and Transparency of Management ofProceeds

25%

3. Reporting System25%

4. Environmental Efforts as the Organization

25%

5 Refer to CBI Website: https://www.climatebonds.net/climate-resilience-principles
6 Refer to CBI Website: https://www.climatebonds.net/standard/sector-criteria

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(ii) The factors of evaluation subdivision that compose of major evaluation factors are as follows:
Factors of Evaluation Subdivision

1. Appropriateness and Transparency concerning Selection Criteria andProcesses of the Use of Proceeds(1) The greenness of each project is evaluated and confirmed by issuers or others.
(2) In cases where Green Project has both environmental benefits and disadvantages, issuers orothers take measures to avoid or mitigate such environmental disadvantages.
(3) (a)The environmental objectives, which issuers or others strive to realize through the green
finance to be evaluated (environmental benefits,) (b) criteria to decide whether the green projectthat is subject to allocation of proceeds satisfies the environmental objectives and (c) the process
to make the decision, are appropriate.
(4) The outline of the objectives, criteria and processes in the aforementioned (3) are well explained
to investors.

2. Appropriateness and Transparency of the Management of Proceeds(1) The plan to allocate the proceeds is appropriate (the ratio to new investment and refinancing isclarified. Look-back periods for refinancing projects are obviously defined.)(2) Systems are prepared to track and manage all the proceeds in a proper way (in case of evaluating
borrowing facilities, and a tracking management system is in place to identify the tranches
categorized into green investment and to ensure that the proceeds of the tranches are allocatedto green projects.)(3) Internal control systems are in place to check the tracking management system in the
aforementioned (2) by being audited internally or externally.
(4) Documentary evidence to manage the proceeds is appropriately retained.
(5) Plans are made to manage unallocated proceeds with safe and liquid assets. How to manage
unallocated proceeds are explained to investors in advance.

3. Reporting System(1) The use of proceeds is explained to investors with prospectuses or other legal documents inadvance.
(2) Plans are mapped out to disclose the latest information on the use of proceeds by green financeto the public after green bonds are issued or green loans are borrowed.
(3) Information should be disclosed at least once a year until all the proceeds are allocated. After that,any significant changes should be disclosed if any, as necessary.
(4) Disclosure includes the following factors:
Lists of green projects to which the proceeds are allocated
Overviews of each green project, including its progress
Amounts allocated to each green projects
Environmental benefits expected to be brought by each green project
Amounts or percentages, periods scheduled and management methods concerning unallocated
net proceeds(5) Appropriate key performance indicators are utilized, considering the nature of each green project
when disclosing environmental benefits. It is preferable that such environmental benefits bequantitative and the calculation formula and assumptions be prepared for simultaneous
disclosure.

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Factors of Evaluation Subdivision

4. Environmental Efforts taken by the Organization(1) The management positions environmental issues as material and prioritized issues in their
management strategies. Policies and plans on sustainability, including the environmental issues,
are formulated, and key sustainability issues are recognized and identified.
(2) Internal departments/divisions with expertise in the environment issues, such as issuers or others
or external institutions are involved in the process.
(3) Clear policy and the process are in place for the issuance of green bonds or the borrowing of green
loans and also concrete criteria are in place to determine the green projects to which the proceeds
are allocated.
(4) Issuers or others verify their green projects and environmental policy by seeking feedback fromexternal environmental experts.

V JCR's Key Consideration in Each Evaluation Factor
1. Greenness Evaluation (First Phase)
It is essential for green finance that the proceeds be allocated to green projects with concrete environmental
benefits. It is also important that the credibility of green bonds or green loans be ensured by excluding the socalled "greenwashing bonds" or "greenwashing loans," which appeal as green bonds or green loans and which
actually have no clear environmental benefits, or the proceeds are not appropriately allocated to green projects,
from green bond markets or green loan markets in order to encourage to develop sound green bond markets andgreen loan markets. Considering the aforementioned matters, JCR shall thoroughly confirm the greenness of theuse of proceeds by referring to the green projects exemplified in GBP, GLP and Guidelines (please refer to the
Attachment 1 for details.) Green projects include other related and supporting expenditures, such as R&D andcover several business categories and cases with environmental objectives; however, not limited to these projects,
JCR may find other cases as green projects by its own judgment.
Green finance can include not only new investment but also refinancing. In cases where refinancing is included,
it is preferable that issuers or others unveil the respective ratios of new investment to refinancing and theinvestment or project portfolios subject to refinancing. It is also desirable that periods covered by green projects
to be refinanced (lookback periods) be indicated.
In case of green loans, credit lines may be evaluated and in such a case, it is preferable that the tranches applicable
to investment in green projects be confirmed and track and management be made.
JCR shall confirm whether the benefits concerned are consistent with international targets when evaluating
environmental benefits. Efforts to link the achievement of SDGs with the investment required for which havebeen developed in international political frameworks for the last few years according to ICMA. JCR shall referto the mapping7of the green, social and sustainable bonds, with the SDGs targets announced by ICMA in June

7 https://www.icmagroup.org/green-social-and-sustainability-bonds/mapping-to-the-sustainable-development-goals/

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2018 to unveil the environmental benefits of the target projects, which contribute to the SDGs' objectives ortargets.
Although the use of proceeds is green, some projects may simultaneously entail environmental disadvantages.
JCR therefore confirms whether the environmental disadvantages are well considered by its internal
departments/divisions or external experts qualitatively and quantitatively in order to take necessary measures toavoid or mitigate such a disadvantages. As a result, in cases where the environmental disadvantages exceed theenvironmental benefits, JCR may not, in principle, provide green finance evaluation.
The use of proceeds must be clearly linked to green eligible projects determined by investment corporations inadvance although the evaluation target is investment equities. Whenever the proceeds are financed throughinvestment equities, these investment corporations must disclose that they will disclose specific assets to beacquired and that the assets in question are green-eligible in reference to the selection criteria stipulated by themin advance to investors. All eligible green assets held by those investment corporations are subject to evaluation
since investment equities will be mixed with other investment equities after the procurement.
The types and environmental benefits of green projects may change day after day due to technological innovation.
JCR will carry out greenness evaluation by referring to the green project types and calculation formula ofenvironmental benefits that are effective at the time of evaluation.

2. Management, Operation and Transparency Evaluation (Second Phase)(1) Appropriateness and Transparency concerning the Selection Criteria and Processesof the Use of Proceeds
JCR confirms whether the following factors are internally well considered and established, and the details
are sufficiently explained to investors in advance when evaluating green finance.
i. The objectives that will be realized through the green finance by issues or others (such as theprevention of climate change or energy saving)ii. The selection criteria of green projects (how to evaluate and select a project that is assumed to haveconcrete environmental benefits for the objectives)
iii. The outlines of the process to determine the project ((a) is it appropriate as the allocation target ofproceeds, considering its objectives and criteria assumed? And (b) how to decide whether the green
project meets the environmental objectives by whom and which criteria are used?)
It is preferable that there be internal specific departments/divisions or feedback from external institutions bereceived when determining targets, criteria and processes.
In case of investment equities, the entire selection criteria and processes shall be evaluated when acquiring
assets of the corporation in question since the selection criteria and entire processes of the use of proceeds
include the means of financing all green eligible assets.

(2) Appropriateness and Transparency concerning Management of Proceeds
It is assumed that there are various ways to manage proceeds depending upon issuers or others; however,JCR confirms that the proceeds financed by the issuance of green bonds, the borrowings of green loans or
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the issuance of investment equities are ensured to allocate to green projects and whether mechanisms andinternal systems are in place to easily track and manage the allocation status. Some examples of tracking andmanaging proceeds are described in Guidelines; however, tracking and managing systems should be well
explained to investors as well.
JCR gives importance to whether proceeds financed through green finance are scheduled to be used for green
projects at an early stage and to the evaluation of management and operation methods for unallocatedproceeds.

(3) Reporting System
Issuers or others should annually prepare and report the latest information concerning the use of proceeds
until all the proceeds will be allocated, if necessary, according to GBP and GLP. Specifically, the outlines ofgreen projects to which the proceeds are allocated, the amounts allocated and the environmental effects
anticipated should be included (it is preferable that both quantitative and qualitative performance indicators
be used.)JCR evaluates whether reporting systems are planned in a detailed and effective manner before the issuanceof green bonds and after the execution of green loans at the time of issuing green bonds or making green
loans, based on GBP, GLP and Guidelines.
In case of investment equities, impact reporting should cover all the green eligible assets of the investment
corporations as they will be intermingled as part of the capital stock. No time limit can be set for reporting
due to the nature of investment equities. As long as the investment corporations exist, the reporting should
include predetermined items as environmental benefits (impacts) around once a year, and the event concerned
and the subsequent measures should be included in reporting in the event of a partial sale or loss of green
eligible assets.

(4) Environmental Efforts taken by the Organization
It is important for the management to regard environmental issues as a matter of high priority for management,
and green finance policies, processes and the selection criteria of green projects are clearly positioned byestablishing departments/divisions specializing in environmental issues or in collaboration with externalorganizations in order for issuers or others to issue the green bonds to be targeted or make/manage green
loans and disclose appropriate information to investors.
The department in charge of environmental issues is not necessarily specialized in environmental issues only;
however, it is preferable that issuers or others ensure personnel who professionally consider the organization's
efforts for green finance and environmental issues.

VI. Evaluating Climate Transition Finance
1. Definition and Significance of Climate Transition FinanceTransition Finance to decarbonized society in order to mitigate climate change (Climate Transition Finance) isa sustainable finance framework that supports the industries that are emitting a large amount of CO2 and that
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have not had much access to financing in the sustainable finance markets so far only when the industries areworking to reduce CO2 emissions in accordance with long-term strategies.
Compared to the rest of the world, Japan's CO2 emissions are large, raking the top 10 and have significant
impacts on the global environment as a whole. On the other hand, decarbonization initiatives are progressively
discussed in Japan, with Prime Minister Suga declaring virtually zero emissions by 2050 in his policy statement
on October 26, 2020, and making the announcement of Green Growth Strategy toward carbon neutrality inDecember 2020. It is said that huge investment is required to achieve the goals in the Paris Agreement (aiming
to limit global warming ideally to 1.5°C and, at the very least, to well below 2°C, compared with pre-industrial
levels) and some estimates suggest that Asia as a whole will need to invest approximately 1,300 trillion yen overthe next 10 years to combat global warming. Under these circumstances, it is difficult to cover all the investment
demand needed to realize carbon-neutral society only with green finance for green projects that have alreadybeen established as clean technologies. It is an urgent task for companies to accelerate finance for thedevelopment, implementation and diffusion of low-carbon technologies on the path to decarbonization.
Capital markets play an important role in enabling climate transitions by encouraging efficient financing frominvestors for issuers or others who are seeking to address climate change risks. In response, ICMA established aworking group on Climate Transition in February 2020, with over 80 financial institutions, investors andevaluation agencies as members, and ICMA's Climate Transition Finance Handbook was submitted on
December 10, 2020. Prior to this in Japan, "Study Group on Financing for Environmental Innovation"(Chairperson: Kunio Ito, Project Professor, Graduate School of Business Administration, Hitotsubashi
University), organized by the Ministry of Economy, Trade and Industry, published "Concept of Climate
Transition Finance." In January 2021, "Transition Finance Environment Improvement Study Group" wasscheduled to formulate domestic basic guidelines for financing through transition bonds or loans, based on thecontents of the handbook as well.
In light of this domestic and international situation, JCR provides Climate Transition Finance Evaluation inaccordance with Green Finance Evaluation Methodology for financing whose use of the proceeds is specified asnecessary for the transition to decarbonized society.

2. Valuation Systems on Climate Transition FinanceThree evaluation phases are used for evaluation mechanisms, similar to those of Green Finance. When the useof proceeds includes those applicable to green projects and those relevant to transition projects, or when the useof proceeds is subject to only the project for climate transition (transition projects,) the evaluation is conducted
as Climate Transition Finance.

2-1. Evaluation Phase 1: Climate Transition Evaluation
In Climate Transition Evaluation in Evaluation Phase 1, in cases where the target projects are categorized intogreen projects or transition projects, the use of proceeds (a percentage of proceeds allocated to green/transition

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projects) will be confirmed and the eligibility of the use of proceeds for the transition finance will be evaluatedon a scale of five from gt1 to gt5 according to the following concept.
Percentage of Proceeds Allocated to Green/Transition Projects

Evaluation

100-90% (almost all of the use of proceeds will be allocated togreen/transition projects)

gt1

89-70% (majority of the use of proceeds will be allocated togreen/transition projects)

gt2

69-50% (more than half of the use of proceeds will be allocated togreen/transition projects)

gt3

49-30% (allocation ratio to green/transition projects is low)gt4

29-10% (allocation ratio to green/transition projects is very low)gt5

Less than 10%

N/A

2-2. Evaluation Phase 2: Management, Operation and Transparency Evaluation
In Evaluation Phase 2, the management, operation, and transparency of issuers or others will be evaluated on ascale of five from m1 to m5, based on the four evaluation factors on management/operation systems andtransparency as indicated by GBP, GLP and Guideline, and the details are as follows. (Please refer to IV.
Evaluation Methodology. In Evaluation Subdivisions, Green shall be replaced with Green/Transition.) The
evaluation symbols shall be used for both Green Finance and Climate Transition Finance in Evaluation Phase 2.
Score of Management, Operation and Transparency Evaluation

Management, Operation, andTransparency Evaluation

100-80 scores (the management and operational structure is wellestablished and very transparent. The implementation of projects and theallocation of proceeds in accordance with the plan are significantly
promising.)

m1

79-60 scores (the management and operational structure is in placeand highly transparent. The implementation of projects and theallocation of proceeds in accordance with the plan are generally
promising.)

m2

59-40 scores (there are some problems with the management andoperation structure and transparency and some concerns about theimplementation of projects and the allocation of proceeds inaccordance with the plan.)m3

39-20 scores (there are problems with the management and operation
structure and transparency and concerns about the implementation ofprojects and the allocation of proceeds in accordance with the plan.)m4Less than 20 scores (there are serious problems with the management
and operation structure and transparency and the implementation ofprojects and the allocation of proceeds in accordance with the plancannot be expected.)

m5

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122-3. Evaluation Phase 3: Overall Evaluation
In Evaluation Phase 3, the overall evaluation (JCR Climate Transition Finance Evaluation) is determined basedon Climate Transition Evaluation from gt1 to gt5 and taking the Management, Operation and Transparency
Evaluation from m1to m5 into consideration.
Specifically, JCR Climate Transition Finance Evaluation from Green 1 to Green 5 is determined in accordancewith the undermentioned JCR Climate Transition Finance Evaluation Matrix.
Green 1 (T) is the highest level of the JCR Climate Transition Finance Evaluation. Green 1 (T) is given to the
Climate Transition Finance that has obtained the highest evaluation (gt1+m1) in both Climate Transition
Evaluation and Management, Operation and Transparency Evaluation.

[JCR Climate Transition Finance Evaluation Matrix]
Management, Operation and Transparency Evaluation

Greenness/Transitional
Evaluation

m1

m2

m3

m4

m5

gt1

Green 1(T)Green 2(T)Green 3(T)Green 4(T)Green 5(T)gt2

Green 2(T)Green 2(T)Green 3(T)Green 4(T)Green 5(T)gt3

Green 3(T)Green 3(T)Green 4(T)Green 5(T)

N/A

gt4

Green 4(T)Green 4(T)Green 5(T)

N/A

N/A

gt5

Green 5(T)Green 5(T)

N/A

N/A

N/A

2-4. Presentation of JCR Climate Transition Evaluation
JCR' evaluation on Climate Transition Finance is indicated by focusing on JCR Climate Transition FinanceEvaluation from Green 1(T) to Green 5(T), which is the overall evaluation, together with Green/Transitional
Evaluation from gt1 to gt5 and Management, Operation and Transparency Evaluation from m1 to m5.

[JCR Climate Transition Finance Evaluation Results]

Overall
Evaluation

Greenness/
Transition
Evaluation（Use of Proceeds）

Management,
Operation andTransparency Evaluation

Green 1 - Green 5

g1 - g5

m1 - m5

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3. Differences from Green Finance Evaluation in Climate Transition FinanceThe differences between Climate Transition Finance Evaluation and Green Finance Evaluation exist mainly in
Evaluation Phase 1. Evaluation is made by basically replacing Green Project with Green/Transition Project in
Evaluation Phase 2. The same screening factors are used in Evaluation Phase 1; however, the eligibility isdetermined by confirming the following points regarding Greenness/Transition (environmental benefits) of theuse of proceeds.
Screening to Determine whether Project qualifies as Green/Transition Project(1) Proceeds financed by the bonds or borrowings to be evaluated are allocated togreen/transition projects (projects that meet the following requirements, projects that are
not included in the aforementioned but contribute significantly to CO2 reduction and are
one of the main measures to realize companies' transition strategies in addition to thoseexemplified in GBP, GLP and Guidelines.)(2) The green/transition projects concerned have clear environmental benefits and are
obviously contributable to international goals, such as SDGs and the Paris Agreement.
(3) The environmental benefits clearly exceed the environmental disadvantages (preferably
quantified and comparable.)
The projects will not cause significant harm to other green projects. (Do No Significant
Harm Assessment)
The projects are not anchored in fossil fuel-based technologies
The projects aim to decarbonize or reduce carbon emissions in the long run.
In cases where "fair transitions" are required for transition projects, it is preferable thatthe measures taken by issuers or others be fully included in the plans.
(4) In case of evaluating climate transition projects, the following four factors as indicated in
Climate Transition Finance Handbook8 should be confirmed.

Four factors to be confirmed in addition to the above in case of Climate Transition Finance(1) Transition strategies
and governance ofissuers of others(2) Should beenvironmental key
issues in thecompany's businessmodelsWill the use of proceeds be for projects or assets that contribute tostrategies on transition for the issuers' or others' climate change
mitigation?
Is the use of the "Transition" label in financing intended to help issuers
or others realize their corporate strategies to transition to businessmodels that effectively address climate change-related risks andcontribute to achieving the goals of the Paris Agreement?
Given there are impacts on the current materiality identification, isthe trajectory of issuers' or others' climate transition strategies
relevant to environmental key issues in the issuers' or others' businessmodels?

8 Refer to ICMA's website at https://www.icmagroup.org/sustainable-finance/the-principles-guidelines-andhandbooks/climate-transition-finance-handbook

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(3) Should be based on
scientific evidence.

Are science-based targets and trajectories referenced to the climatechange strategies of issuers or others?
Does the migration roadmap meet the followings?
(i) Quantitatively measurable(ii) Consistent with generally recognized science-based goal settings(iii) Publicly disclosed (including milestones at midpoints)(iv) Certified and verified by independent third parties.

(4) Transparency should
be ensured

Has the company disclosed (or will it disclose) its investment plans forthe use of proceeds to the extent possible, including capital
expenditures and working capital?
*R&D expenses can be included.
Does the expenditure go beyond Business as Usual?
Can clear explanations be provided as to how this expenditure willcontribute to the implementation of Climate Transition Strategy?

VII. Evaluating Blue Finance
1. Definition and Significance of Blue Finance"The ocean makes up 70% of the Earth's surface and is the biosphere for 80% of the world's life. The ocean
produces 50% of the oxygen needed by humans, absorbs 25% of the carbon dioxide and 90% of the additional
heat from these emissions. The ocean is an important buffer against the impacts of climate change.
The ocean also has unimaginable biodiversity and provides us with many of the resources necessary for life,
including food, jobs, minerals and energy. The ocean is however under unprecedented threats as a result of
human activities. If we aim to solve critical challenges, such as climate change, food security crises, disease
pandemics, biodiversity losses due to ocean pollution, economic disparity or conflicts, we must act now toprotect our ocean." (Excerpt from Ocean Conference Draft Declaration)
Sustainable Blue Economy Finance Principles9were formulated for the first time in the world as international
guiding frameworks for banks, insurance companies and investors to finance sustainable ocean economies in2018. The Principles consist of 14 ocean-specific criteria that are intended for the financial industry to encourage
to finance to promote the implementation of the SDG Target 14 (Life below water) and the sustainability ofocean-based industries. The Principles were mapped out by the European Commission, WWF, World Resources
Institute (hereinafter referred to as "WRI") and European Investment Bank (hereinafter referred to as "EIB") andsubsequently transformed into Sustainable Blue Economy Finance Principles (hereinafter referred to as"SBEFP") by the United Nations Environment Programme Finance Initiative (hereinafter referred to as "UNEP
FI".) In March 2022, UNEP FI, with financial assistance from the European Commission, published Diving
Deep: Finance, Ocean Pollution and Coastal Resilience, which is a practical guide to sustainable finance.

9 Case studies of blue finance are introduced on the UNEP FI Website athttps://www.unepfi.org/blue-finance/resources/case-studies/

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The United Nations further agreed in the 2022 UN Ocean Conference in Lisbon in June 2022 to declare theimplementation of scientific and innovative action plans on sustainable development among participating
countries so as to support the implementation of the SDG 14, a draft of which was published.10
The United Nations Global Compact mapped out the Sustainable Ocean Principles, which set forth principles
on actions that should be taken by business corporations to address ocean issues. International financial
institutions are also increasingly defining Blue Economy or Blue Finance and developing finance frameworks.
In January 2022, International Finance Corporation (hereinafter referred to as "IFC") established Blue Finance
Guidelines, which specify the types of the use of proceeds that contribute to SDG Goals 6 and 14 respectively,
with the aim of promoting blue finance in IFC's investments/loans and disseminating blue finance globally.
While principles and guidelines published by various international organizations are largely consistent with theidea of supporting financing projects, which promotes sustainable economic growth through the sustainable useof ocean resources and that contribute to the SDG Goal 14, the definition and concept of eligible projects that
may address finance vary. IFC also includes projects that solve non-ocean-related water issues, such as watersupply and sewage and that contribute to the SDG target 6.
In September, 2023, ICMA, IFC, UNEP FI, UNGC and ADB publicly disclosed "A Practitioner's Guide for
Bonds to Finance the Sustainable Blue Economy: SBE Guide.11" JCR is, in principle, to evaluate Blue Financein accordance with SBE Guide in and after the date last updated although JCR defined Blue Finance by referringto the Guidance of IFC and UNEP FI and evaluated it prior to the date last modified. JCR evaluates freshwaterrelated projects although SBE Guide covers only marine-related projects since IFC includes freshwater-related
projects. JCR is to confirm the alignment concerned with SBE Guide on marine-related projects and IFC
Guidelines for Blue Finance on freshwater-related projects. JCR shall confirm the alignment with marine-related
projects by referring to SBE Guide and freshwater-related projects by referencing to IFC Guidelines for Blue
Finance. JCR will also evaluate UNEP FI SBEFP based on reference when confirming the environmental
disadvantages or other related matters.

2. Evaluation Systems on Blue FinanceThree evaluation phases are used for evaluation mechanisms, similar to those of Green Finance. The original
eligibility criteria shall be formulated for the eligibility of the use of proceeds by considering the Green ProjectClassification and SBE Guides stipulated by ICMA and IFC Guidelines.

10 The 2022 UN Ocean Conference (in Lisbon)

A/CONF.230/2022/12 2022 United Nations Conference to Support the Implementation of Sustainable
Development Goal 14: Conserve and sustainably use the oceans, seas and marine resources for sustainable
development
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2-1. Evaluation Phase 1: Blueness Evaluation
In cases where target projects are categorized into blue projects in evaluating blueness in Evaluation Phase 1,
the use of proceeds will be confirmed and the eligibility hereof for Blue Finance will be evaluated on a scale offive from b1 to b5 according to the following concepts.
Percentage of Proceeds Allocated to Blueness Project

Blueness Evaluation

100-90% (almost all of the use of the proceeds will be allocated toblue projects)

b1

89-70% (majority of the use of the proceeds will be allocated to blue
projects)

b2

69-50% (more than half of the use of the proceeds will be allocatedto blue projects)b3

49-30% (allocation ratio to blue projects is low)b4

29-10% (allocation ratio to blue projects is very low)b5Less than 10%

N/A

2-2. Evaluation Phase 2: Management, Operation and Transparency Evaluation
In Evaluation Phase 2, the management, operation, and transparency of issuers or others will be evaluated on ascale of five from m1 to m5 below, based on the four evaluation factors on management/ operation systems andtransparency as indicated by GBP, GLP and Guidelines. (Refer to IV. Evaluation Methodology. In Evaluation
Subdivisions, Green shall be replaced with Blue.) The same symbols will be used for both Green Finance andBlue Finance in Evaluation Phase 2.
Score of Management, Operation and Transparency Evaluation

Management, Operation andTransparency Evaluation

100-80 scores (the management and operational structure is wellestablished and very transparent. The implementation of projects andthe allocation of proceeds in accordance with the plan are significantly
promising.)

m1

79-60 scores (the management and operational structure is in placeand highly transparent. The implementation of projects and theallocation of proceeds in accordance with the plan are generally
promising.)

m2

59-40 scores (there are some problems with the management andoperation structure and transparency and some concerns about theimplementation of projects and the allocation of proceeds inaccordance with the plan.)m3

39-20 scores (there are problems with the management and operation
structure and transparency and concerns about the implementation ofprojects and the allocation of proceeds in accordance with the plan.)m4Less than 20 scores (there are serious problems with the
management and operation structure and transparency and theimplementation of projects and the allocation of proceeds inaccordance with the plan cannot be expected.)

m5

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172-3. Evaluation Phase 3: Overall Evaluation
In Evaluation Phase 3, the overall evaluation (hereinafter referred to as "JCR Blue Finance Evaluation") will be
determined based on Blueness Evaluation from b1 to b5 by taking Management, Operation and Transparency
Evaluation from m1 to m5 into consideration.
Specifically, JCR Blue Finance Evaluation from Blue 1 to Blue 5 shall be determined in accordance with the"JCR Blue Finance Evaluation Matrix" below.
Blue 1 is the highest level of the JCR Blue Finance Evaluation. Blue 1 is given to the Blue Finance that has
obtained the highest evaluation (b1+m1) in both Blueness Evaluation and Management, Operation andTransparency Evaluation.

[JCR Blue Finance Evaluation Matrix]
Management, Operation and Transparency Evaluation

Blueness Evaluation

m1

m2

m3

m4

m5

b1

Blue 1

Blue 2

Blue 3

Blue 4

Blue 5b2

Blue 2

Blue 2

Blue 3

Blue 4

Blue 5b3

Blue 3

Blue 3

Blue 4

Blue 5

N/A

b4

Blue 4

Blue 4

Blue 5

N/A

N/A

b5

Blue 5

Blue 5

N/A

N/A

N/A

2-4. Presentation of JCR Blue Finance Evaluation
JCR's evaluation on Blue Finance is indicated by focusing on JCR Blue Finance Evaluation from Blue 1 to Blue5, which is overall evaluation, together with Blueness Evaluation from b1 to b5 and Management, Operation andTransparency Evaluation from m1 to m5.

[JCR Blue Finance Evaluation Results]

Overall
Evaluation

Blueness
Evaluation（Use of Proceeds）

Management,
Operation andTransparency Evaluation

Blue 1 - Blue 5

b1 - b5

m1 - m5

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3. Differences from Green Finance Evaluation in Blue FinanceThe differences between Blue Finance Evaluation and Green Finance Evaluation mainly exist in Evaluation
Phase 1. In Evaluation Phase 1, the same screening factors will be used; however, the alignment will be
determined by confirming the following factors on Blueness (environmental benefits) of the use of proceeds.

Screening Factors whether Project is Categorized into Blue Projects(1) Do the proceeds financed by the bonds or borrowings to be evaluated fall under blue
finance areas as described in SBE Guide for marine-related projects and IFC Guidelines for
freshwater-related projects?
(2) Does the blue project has clear environmental benefits related to the sustainable marine
economy or water infrastructures? Does the blue project has clear contributions to theachievement of at least one of the targets related to SDG Target 6 or 14?
(3) Does the project fall under one of the project classifications indicated in GBP or GLP?
(4) Will not the implementation of projects pose serious risks to the achievement of other
SDG targets (especially 2, 7, 12 and 13?)(5) Do the environmental benefits clearly exceed the environmental disadvantages(preferably quantified and comparable?)
Has it been confirmed that the project will not cause significant harm to other green/blueprojects?
Does the target project operates in accordance with IFC Performance Standard, WorldBank EHS Guidelines or ESG standards equivalent to the aforementioned?
Is the project not an exempted project (offshore oil and gas mining operations, deep sea
mining operations and other sectors considered to have unsustainable practices in place)as defined by SBE Guide and UNEP FISBEFI (Minimum Safeguard?) Are the environmental
disadvantages appropriately managed/alleviated in the context of UNEP FISEFI?
(6) Do financial institutions comply with UNEP FI's Sustainable Blue Finance Principles in caseof loans?

VIII Evaluating Green Finance Framework
JCR may conduct the Green Finance Framework Evaluation for the green bond's issuance or the green loan's
borrowing policy of issuers or others, instead of individual green bond's issuance or separate green loan's
borrowing policy to confirm the alignment with GBP, GLP or Guidelines at the request of issuers or others. In
such a case, this evaluation method shall apply mutatis mutandis; however, the evaluation mark shall be indicatedwith (F) at the end of the evaluation mark. The same applies to Climate Transition Finance Evaluation and Blue
Finance Evaluation.
Green Finance Framework Evaluation involves evaluation on the green finance policy of issuers or others anddoes not include Greenness Evaluation and Management, Operation, and Transparency Evaluation of theindividual uses of proceeds implemented based on the policy concerned. Accordingly, it is necessary toseparately evaluate individual bonds/loans for green finance. As the framework evaluation is to confirm the

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consistency with GBP and Guidelines at the time of evaluation, it is essential to request JCR to review theframework evaluation and update the evaluation when any changes in the framework or major revisions in GBP
are made. If the framework is modified without any updated evaluation by JCR, or if frameworks do not comply
with GBP due to its revisions, JCR's evaluation prior to such event will be invalid.

IX Assumption and Limit of this Evaluation
JCR's green finance evaluation is to confirm that the environmental benefits are appropriately calculated at thetime of planning to issue green bonds or borrow green loans or issuing green bonds or borrowing green loans
quantitatively or qualitatively by issuers or others or the third parties who made the request. This evaluation does
not guarantee that such benefits will continue in the future.
The impacts on the environmental benefits and disadvantages of green projects are calculated by internalorganizations/personnel with special knowledge or by external institutions, based on the details disclosed byissuers or others. JCR evaluates the impacts based on the aforementioned results and it will not calculate theimpacts by itself.

X Periodical Review
JCR may review periodically in cases where it finds the necessity to follow up the unallocated proceeds or toconfirm whether impact reporting on planned environmental benefits is carried out.
In the event that evaluation is made against green finance frameworks, such as green finance, including
investment equities, a periodic review, in principle, shall be conducted on the implementation of financing basedon such framework and the status of allocation and green-eligible assets.

■Disclaimers

The information contained in this document may be mistaken due to human, mechanical or other reasons. JCR therefore makes no representation or warranty, express or
implied, as to the accuracy, result, appropriateness, timeliness, completeness, marketability, or fitness for any particular purposes of such information, and JCR assumes
no responsibility for any errors, omissions or consequences of using such information. JCR shall not be liable for any losses of opportunities and extraordinary, indirect,
incidental or consequential damages of any kind, including any losses of money, which may result from any use of such information under any circumstances, whether
contractual liability, tort liability, negligence or other causes of liability, and whether such damages are foreseeable or unforeseeable. The information concerned is acomprehensive statement of opinion of JCR at the present time and is not a statement of a fact and does not make any recommendations regarding credit risk decisions
or the decision to purchase, sell or hold individual bonds, commercial paper or the like. All rights to this document are held by JCR and it is prohibited to duplicate,translate, or alter, whether in whole or in part, without permission from JCR, including data of JCR Green Finance Evaluation.

Japan Credit Rating Agency, Ltd.
Jiji Press Building, 5-15-8 Ginza, Chuo-ku, Tokyo 104-0061, Japan
Tel. +81 3 3544 7013, Fax. +81 3 3544 7026

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<Attachment 1>

Green Projects in Green Bond Principles by ICMAi, Green Loan Principles
by LMA, Green Bond Guidelines and Green loan Guidelines by Ministry ofEnvironment*The followings are just examples and not limited hereto. It is necessary to consider the applicability to green
projects in the future while paying close attention to trends in international treatment.
ICMA GBP/LMA GLPMOE Guidelines (in 2022)

Renewable energy(including power generation, transmission,
appliances or products)

1. Renewable energy projects (including power generation,transmission and appliances)
1-1 Power generation projects with renewable energy, suchas solar power, wind power, water power, biomass (limited
to those whose sustainability is confirmed or thosedeprived from waste,) or geothermal power
1-2 Projects to install electric power-cables to transmit orbatteries to store energy generated by renewable energy
and to maintain/manage, coordinate demand/supply or
store energy
1-3 Projects to manufacture equipment used by the
aforementioned projects, such as solar panels, electric
power-cables and batteries to store energy
1-4 Projects that use renewable energy power, such as solar
or geothermal power
1-5 Projects that use renewable energy for part or all of theelectricity used in offices, factories, residences or data
centers
1-6 Projects that provide ICT solutions contribute to
renewable energy (maintenance/management systems,
operation systems and optimal supply/demand
adjustments)
2. Projects for energy efficiency(including newly built/refurbished buildings, energy storage,
district heating, smart grids, appliances or products)
2-1 Projects for the construction/renovation of Net Zero
Energy House ("ZEH",) Net Zero Energy Building ("ZEB")
and other energy efficient buildings
2-2 Projects for construction/renovation of highly efficientbuildings (including thermal insulation,) such as offices,
factories or residences to obtain LEED, CASBEE and BELS inthe environment authentication systems
2-3 Projects to install appliances or facilities, which are highly
energy efficient to office, factories, houses or data centers
2-4 Projects that install equipment on the effective use ofenergy, such as energy storage, district heating/cooling or
smart grids
2-5 Projects for the provision of ICT solutions that contributeto energy conservation (BEMS, HEMS, CEMS, ITS or supply
chain management, ) and the introduction ofcommunication technologies with highly energy efficiency

Energy efficiency(such as newly built/refurbished buildings,
energy storage, district heating, smart grids,
appliances or products)

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ICMA GBP/LMA GLPMOE Guidelines (in 2022)

Pollution prevention and management(including reduction of air emissions,greenhouse gas control, soil remediation,
waste prevention, waste reduction, waste
recycling and energy/emission efficientwaste to energy)

3. Projects for pollution prevention and management(including wastewater treatment, greenhouse gas emission
control, soil purification, waste management of three R's(Reduce, Reuse and Recycle), thermal recycling and these
related environmental monitoring)
3-1 Projects that contribute to realizing circular economy(including designing/manufacturing energy efficient/longlife products, using materials with low environmental
effects, such as recycling materials or recyclable materials,
inverse manufacturing (designing/manufacturing products,
considering the flow of collection, degradation, selection
and reuse) and advanced waste collection/treatment(including waste disposal facilities that promote recycling
and collect energy)
3-2 Projects to control the emissions of hazardous chemicals
through introducing advanced facilities/technologies on
preventing the leakage, volatilization and penetration of
hazardous chemicals or using alternatives
3-3 Projects to design or manufacture products that
contribute to controlling the emissions ofchlorofluorocarbons
3-4 Projects to install facilities that contribute to theadvanced treatment and reuse of waste water fromfactories
3-5 Projects to treat contaminated soil
3-6 Projects that contribute to preventing pollution caused
by marine plastic waste
3-7 Projects that provides ICT solutions that contribute to theprevention and management of water pollutants, air
pollutants and hazardous chemicals and the control ofwaste disposal

Environmentally sustainable managementof living natural resources and land use(including environmentally sustainableagriculture; environmentally sustainable
animal husbandry; environmental smart
farm, such as biological grain management
or drip irrigation; environmentally
sustainable fishery and aquaculture;environmentally sustainable forestry,including afforestation or reforestation or
the preservation or restoration of naturallandscapes)

4. Projects for the sustainable management of natural
resources and land use(including sustainable agriculture, fisheries, aquaculture
and forestry; Integrated Pest Management ("IPM",) or drip
irrigation)
4-1 Projects to obtain certification on sustainability, such as
MSC or ASC concerning fisheries and aquaculture
4-2 Projects for the preservation/restoration of water
resources
4-3 Projects to obtain certification on sustainability, including
Forest Stewardship Council ("FSC") regarding forestry
4-4 Projects for sustainable afforestation and thepreservation/restoration of natural landscape
4-5 Projects that provide ICT solutions that contribute to thesustainable management of natural resources and land use(including traceability systems on the sustainability ofagricultural, forestry and fishery resources)
4-7 Projects, such as the preservation and creation of urban
green spaces or the formation of green networks incooperation with local governments
4-8 Projects that contribute to reducing the burdens on
natural resources

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ICMA GBP/LMA GLPMOE Guidelines (in 2022)

Terrestrial and aquatic biodiversity
conservation(including the protection of coastal, marine
or watershed environments)

5. Projects for terrestrial and aquatic biodiversity
conservation(including the protection of coastal, marine or watershedenvironments)
5-1 Projects to conserve wetland and coral leaf.
5-2 Projects to control wildlife damages or invasive species toprevent ecological damages caused by wildlife, including
deer or invasive species
5-3 Projects to regenerate the bank protection of rivers in a
way close to nature
5-4 Projects that provide ICT solutions that contribute tobiodiversity (such as ecosystem monitoring, forest
management systems, wildlife damage prevention systems
or biodiversity data analysis using satellites, aircraft or IoT)
5-5 Projects related to protected areas or Other Effectivearea-based Conservation Measures ("OECM") on land or in
the ocean
5-6 Projects for landscape conservation or restoration
6. Projects for clean transportation(including transportation using engines, railways, bicycles,
multi-modal, the means of transport with clean energy or
infrastructure development to reduce harmful emissions)6-1 Projects to develop and manufacture electric vehicles(such as electric cars, fuel cell vehicles, plug-in hybrid or
hybrid vehicles) or railways or infrastructure
improvements to use the aforementioned manufactured
goods
6-2 Projects to improve the efficiency of distribution systems
through the development of planned distribution bases,
intensive transportation networks, modal shifts or cosharing of transportation
6-3 Projects to introduce equipment to support
environmentally conscious driving (digital type operation
recorders)
6-4 Projects to develop facilities for park and ride and car
sharing
7. Projects for sustainable water resources management(including sustainable infrastructure for clean or drinking
water, wastewater treatment, sustainable urban drainage
systems, river training or other forms of flooding
mitigation)
7-1 Projects to preserve hydrologic cycles, such as water
source cultivation or the soil infiltration of rain water(including the development of green infrastructures)
7-2 Projects to develop facilities to protect flood damages
7-3 Projects to desalinate seawater
8 Projects for climate change adaptation
8-1 Agriculture, forestry, and fisheries:
Projects for the development and introduction of cropvarieties resistant to climate change or the introduction ofagriculture to reduce environmental loading
8-2 Water environment/water resources:
Projects for the efficient use of water resources of theintroduction of measures for drought
8-3 Natural ecosystem:
Projects for the development of green infrastructures, suchas ecosystem-based adaptation or Ecosystem-based
Disaster Risk Reduction ("ECODRR")
8-4 Natural disasters/coastal areas:
Projects to improve disaster prevention/mitigation
functions in logistics, railways, ports, airports, roads, water

Clean transportation(such as electric, hybrid, public, rail, nonmotorized, multi-modal transportation,
infrastructure for clean energy vehicles andreduction of harmful emissions)Sustainable water resources andwastewater management(including sustainable infrastructure forclean and/or drinking water, wastewater
treatment, sustainable urban drainage
systems and river training or other forms offlooding mitigation)

Climate change adaptation(including information support systems,
such as climate observation or early warning
systems)

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ICMA GBP/LMA GLP

Eco-efficient, circular economy adapted
products or production technologies andprocesses (such as the development andintroduction of environmentally friendlier
products, with an eco-label orenvironmental certification, resourceefficient packaging or distribution)

Green buildings that meet regionally,nationally or internationally recognized
standards or certification

MOE Guidelines (in 2022)

infrastructures, waste treatment facilities, traffic safety
facilities or private real estate
8-5 Health:
Projects to provide weather information and Wet Bulb
Globe Temperature ("WGBT") or raise awareness for the
aforementioned, spread/enlighten preventive/dealingmeasures, provide information on occurrence status, install
air conditioners and dehumidifiers or create cool spots(sunshades or mists)
8-6 Industrial/economic activities:
Projects to ensure the sustainability of projects, such asmeasures for weather disasters in business offices,
relocation from areas with high climate risks, measures forheat or efforts to secure stable supplies of raw materials
8-7 National life/urban life:
Projects for the development of systems under which
prompt and appropriate emergency measures andrestoration can be taken in case of reduced/lacks of wateralong with the development of sewage facilities to preventthe floods of internal waters or the damage of facilities.
8-8 Projects for weather observation or monitoring and early
warning systems or projects that provide ICT solutions that
contribute to climate change adaptation
9. Projects for circular economy adapted products,
production technologies/processes and projects for ecoefficient products (such as the development andintroduction of environmentally friendlier products, with an
eco-label or environmental certification, resource-efficient
packaging and distribution or tools or services on circular
economy)9-1 Projects to manufacture the products which could obtainenvironmental certification or environmentally friendlier
products (including the development and introduction ofenvironmentally friendlier products, with an eco-label orenvironmental certification, resource-efficient packaging
and distribution, tools or services on circular economy or
the construction/improvements of factories/workplaces for
manufacturing the products concerned)
9-2 Projects to implement R&D or the introduction oftechnologies and products to reduce greenhouse gas
emissions (technologies or products related to projects
described in the relevant items, technologies on
separation, recovery, storage and the utilization ofhydrogen, ammonia and CO2, next-generation aircrafts or
ships. These are just examples and not limited hereto.)
10. Projects for Green Buildings
10-1 Projects to newly build or renovate Green Buildings thatare not only energy efficient but also address a wide rangeof considerations, such as water consumption or waste
management in compliance with domestic standards orenvironmental certification systems under which a highlevel of efficiency is demonstrated, such as CASBEE /LEED
certification

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<Attachment 2>

ICMA/IFC/UNEP FI/UNGC/ADB Bonds to Finance the Sustainable Blue Economy – A
Practitioner's Guide – Blue Project Classification to be Indicator
GBP Environmental Goals

Category and Sub-category ofBlue Project to be Indicator (withclosely related to GBP Category)

ClimateChangeMitigation

ClimateChangeAdaptation

NaturalResource
Conservation

Biodiversity
Conservation

Pollution
Prevention
and Control

1. Marine Climate Change
Adaptation and Resilience("Climate Change Adaptation")
Projects that support socialecological resilience andadaptation against climatechange, including theutilization of nature-based
solutions<Only projects within 50 km
from coasts or within themarine environment>
2. Management, Conservation
and Recovery of Marine
Ecosystem("Terrestrial and Aquatic
Biodiversity")<Only projects within themarine environment or within
100 km from coasts>
3. Sustainable Costal and Marine
Tourism
Projects that improve theenvironmental sustainability incostal and marine tourism
4. Sustainable Marine Value Chain("Environmentally sustainable
management by utilizing
living natural resources andland")
Projects that improve theenvironmental sustainability ofmarine value chainsa. Sustainable marine fishingmanagementb. Sustainable aquaculture
projects (algae, bivalve, fishand sea weed)c. Sustainability of fishery productsupply chains
5. Ocean Renewable Energy("Renewable Energy")
Projects that increase the ratioof marine renewable energy inthe total electricity generated
and Renewable Energy Projects
that protect the marine
environment while supporting
other SBE sectors
e.g.,

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GBP Environmental Goals

Category and Sub-category ofBlue Project to be Indicator (withclosely related to GBP Category)a. Offshore wind (Bottom-fixedand floating)b. Wavec. Tidald. Floating sunlighte. Ocean thermal energy
conversion

ClimateChangeMitigation

ClimateChangeAdaptation

NaturalResource
Conservation

Biodiversity
Conservation

Pollution
Prevention
and Control

6. Marine Pollution("Pollution prevention andcontrol"/"sustainable watersupply management"/"circular
economy adapted products,
production technologies andprocesses")
Projects that prevent, control
and reduce discharge of wastes
into coasts and the marine
environment
a. Water-drainage management
b. Solid waste managementc. Resource efficiency and circular
economy (Prevent and reduce
waste)
d. Non-point pollution
management<Limited only within 100 km fromcoasts for Water-drainage
Project. Limited only within 50 km
from coasts or rivers that flow
into the sea for Solid Waste
Project
Limited only within 200 km fromcoasts or within 50 km from rivers(or their tributaries) that flow
into the sea for Non-point
Pollution Project>
7. Sustainable Ports("Clean transport")
Projects that increase
environmental performance,
functions in ports andsustainability of infrastructure
8. Sustainable Marine Transport("Clean transport")
Projects that improve theenvironmental performanceand the sustainability ofmarine transport
9. Water Supply (facilities tosupply clean water efficiently,
research & study and design)*
1) Newly construct water supply
treatment/storage facilities
and sustainable supply
infrastructures (improve 20
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GBP Environmental Goals

Category and Sub-category ofBlue Project to be Indicator (withclosely related to GBP Category)per cent or more of NRW(Non-Revenue Water) (%))
2) Renovate the existing water
infrastructures (improve 20
per cent or more of NRW(Non-Revenue Water) (%))
3) More sustainable desalination
plants that protect the
depletion of ground water andwetlands and are helpful foravoiding hypersaline pollution
in the environment)
4) Technologies or facilities that
increase water efficiency, andwater management activities
that reduce water usage,
including the significant
reduction of water consumption
in land-based aquaculture,
agriculture and irrigation, andresidential/commercial andindustrial uses or loans orrefinancing to technologies (e.g.,
drip irrigation or water recycling
solutions.) that demonstratesignificant advantageous water
efficiency in documents

ClimateChangeMitigation

ClimateChangeAdaptation

NaturalResource
Conservation

Biodiversity
Conservation

Pollution
Prevention
and Control

GBP = Green Bond Principles: km = kilometers
Note: Symbols indicate the contribution of each category to achieving GBP environmental targets(i)= Level 1(ii)= Level 2(iii)= Level 3(iv)*Refer to the eligibility criteria of IFC Guidelines for Blue Finance for water supply related projects.
Source: ICMA/IFC/UNEP FI/UN Global Compact/ADB Bonds to Finance the Sustainable Blue Economy – A Practitioner’s Guide – IFC
Guidelines for Blue Finance

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