ESG Policy
Chapter 1.
Article 1.
1.

General Provisions

PurposeThis ESG Policy (hereafter referred to as this "Policy") defines the basic principles
regarding the internal organizational structure, investment activities, and information
disclosure for Japan Industrial Solutions Co., Ltd. (hereafter referred to as the"Company") to promote responsible investment that contributes to sustainable value
creation by considering environmental and social issues, and corporate governance(hereafter referred to as "ESG investment").

2.

When the Company performs its fiduciary duties as the fund manager, it will contributeto value preservation and enhancement of the investee companies, therefore
contributing to stable and improved mid- to long-term investment performance bytaking into consideration ESG factors in investment activities and information
disclosure based on the United Nations Principles for Responsible Investment (PRI).

Article 2.

ESG issues

In performing its fiduciary duties as the fund manager, the Company will assess potential
investees and take actions for enhancing enterprise value of the investee companies throughconsideration of the following ESG issues, or risks and opportunities related to ESG factors.
(1) Environment
Includes pollution prevention, climate change, environmental conservation, energy
efficiency improvement, promotion of renewable energy, appropriate management of
hazardous substances, measures against natural disasters and waste management.
(2) Social issues
Includes compliance with labor standards, occupational health and safety, appropriate
management of employees, protection of human rights, appropriate management ofconfidential information, prohibition of illegal sales, product safety, and responsible supply
chain management.
(3) Corporate governanceIncludes elimination of anti-social organizations, prohibition of money laundering andterrorist financing, prohibition of bribery and corruption, appropriate business management,compliance with accounting and tax standards, prohibition of anti-competitive practices,1

inappropriate lobbying, prohibition of illegal political contributions and establishment of aninternal grievance mechanism.
Article 3.

Scope of application

This Policy is to be applied to the Company’s investment activities and information disclosure.
However, in cases where the Company decides that it is necessary to limit the incorporationof ESG, this Policy will be applied to the extent possible.
Article 4.

Laws and regulations to be referred to about ESG

The Company will confirm that the investee companies and their related companies comply
with the domestic laws and regulations of the countries and regions where they operate.
Article 5.

Organizational structure and responsibility

Organizational structure and responsibility regarding ESG are defined as follows.
(1) Board of Directors
The board of directors is responsible for decision making on significant issues including ESG
Policy, and supervising ESG related actions of the Company.
(2) Investment Committee and Portfolio CommitteeThe investment committee and the portfolio committee will carry out investment decisions,monitoring and value enhancement of the investee companies, and deliberations anddecisions on other matters of the investment funds managed by the Company, taking ESG
factors into consideration.
(3) ESG manager
ESG manager supervises ESG integration into the Company by maintaining theorganizational structure necessary for ESG integration, examining the appropriateness ofESG integration by the Company, and directing improvement actions. In addition, ESG
manager is to report on significant issues regarding ESG integration and status of ESG
related actions of the Company to the board of directors.
(4) Executives and staff
All executives and staff of the Company are to continuously develop their understanding ofESG through internal/external training.

Chapter 2.
Article 6.

ESG integration approach

ESG approach in investment activities

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The Company is, in principle, to integrate ESG into its investment activities as below.
(1) Screening
In the selection of investee companies, if the Company is aware of the fact that the potential
investee company’s business and other activities include restricted business activities underthe Act on Control and Improvement of Amusement Business, etc., activities controlled by orassociated with a member of organized crime syndicates, activities associated with child laboror forced labor prohibited by laws, manufacture or sale of cluster munitions, antipersonnel
landmines, or biochemical weapons, or the potential investee company is subject to economic
sanctions, or otherwise the potential investee company is involved with the activities that theCompany perceives as inappropriate in the spirit of this Policy, the Company shall not invest
in the potential investee company.
(2) Due diligence
In the case where the Company decides that ESG due diligence of the potential investee
companies is necessary, the ESG due diligence shall be conducted by the members of theCompany and/or external advisors. In the case where a significant ESG issue is identified
through ESG due diligence, the investment committee will discuss the issue.
(3) Use of proceeds
The Company does not provide investment which will be used for the manufacture ofweapons designed to kill or inflict structural damage during wars or armed conflicts, newconstruction of coal-fired power plants (including expansion of existing facilities), or new
thermal coal mining projects.
(4) Portfolio management
In the case where the Company decides that improvement actions of the investee companies
are necessary on ESG issues identified through ESG due diligence etc., the Company will
support the investee companies as necessary and monitor progress.
Article 7.
1.

Monitoring of the investee companies

The Company will make its best effort to monitor the investee companies’ approaches tomanagement of ESG issues. Investment officers are to request the investee companies
to report/disclose the ESG-related information as necessary. The reporting approach,contents, and frequency are to be agreed following discussion between the investment
officers and the investee companies’ personnel.

2.

In the case where a significant incident related to ESG (accident, suspension of operation,etc.) occurs, the incident shall be reported to the portfolio committee. The committee
will assess the significance of the incident, and escalate to the investment committee ofthe Company based on its assessed significance.

3Article 8.

Disclosure and reporting

The Company is to report the overview of the ESG integration into its investment activities
and the monitoring results of ESG related matters of the investee companies to investors etc.
as necessary.

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