Second-Party Opinion

Marubeni Corporation Green Bond
Framework

Evaluation Summary
Sustainalytics is of the opinion that the Marubeni Corporation Green Bond Framework
is credible and impactful and aligns to the four core components of the Green Bond
Principles 2021. This assessment is based on the following:
The eligible categories for the use of proceeds
Renewable Energy, Environmentally Sustainable Management of
Living Natural Resources and Land Use, Sustainable Water andWastewater Management, and Pollution Prevention and Control, arealigned with those recognized by the Green Bond Principles.
Sustainalytics considers that investments in the eligible categories
will lead to positive environmental impacts and advance the UN
Sustainable Development Goals, specifically SDGs 6, 7 ,12 and 15.
Marubeni Corporation’s
process for evaluating and selecting projects is managed by the
Finance Department. The Finance Department, in consultation with
the Sustainability Management Department as well as relevantbusiness units, checks the eligible green project candidates andconfirms the alignment between the projects and the eligible criteria
defined in the Framework. The CFO makes the final decision
regarding the projects selected through this process. The process ofprior assessment of environmental and social risks using Marubeni’s
sustainability assessment tool is applied to all allocation decisions
made under the Framework. Sustainalytics considers this risk
management system to be adequate. Sustainalytics considers the
project selection process in line with market practice.
Marubeni Corporation’s process forthe management of proceeds is implemented through the Finance
Department. Using an internal management system, Marubeni
Corporation tracks and manages the status of proceeds’ allocation
to eligible projects at least once a year. In cases where any proceeds
remain unallocated, the amount equal thereto will be managed in
cash and cash equivalents. Marubeni Corporation’s processes for
management of proceeds is in line with market practice.
Until full allocation of the proceeds, Marubeni
Corporation intends to report on the proceeds’ allocation status andpositive environmental impacts on its website once a year. Marubeni
Corporation is also committed to reporting relevant impact indicatorsand obtaining post issuance reviews from an independent reviewer.
Sustainalytics views Marubeni Corporation’s allocation and impact
reporting as aligned with market practice.

© Sustainalytics 2021

Evaluation Date

August 26, 2021

Issuer Location

Tokyo, Japan

Report Sections
Introduction ............................................. 2
Sustainalytics’ Opinion ........................... 3
Appendices ............................................. 9

For inquiries, contact the Sustainable
Finance Solutions project team:
Kosuke Kanematsu (Tokyo)
Project Manager
kosuke.kanematsu@sustainalytics.com(+81) 3 4571 2343
Marie Toyama (Tokyo)
Project Support
Taku Kinomura (Tokyo)
Client Relations
susfinance.japan@sustainalytics.com(+81) 3 4510 7394

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Marubeni Corporation Green Bond Framework

Introduction
Marubeni Corporation (hereinafter “Marubeni” or the “Company”) is Japan’s leading trading company foundedin 1858, with over 100 locations across more than 60 countries and regions in the world and with 45,470 Group
employees (as of March 31, 2021). The company is engaged in diversified business activities, including
importing and exporting, as well as domestic business, and offers various services, and makes internal andexternal investments, and is involved in resource development in a wide range of fields, including lifestyle, ICT& real estate business, forest products, food, agribusiness, chemicals, energy, metals & mineral resources,
power business, infrastructure project, aerospace & ship, finance & leasing business, construction, industrial
machinery & mobility, and next generation business development.
Marubeni has developed the Marubeni Corporation Green Bond Framework (the “Framework”) under which it
intends to issue green bond and use the proceeds to finance and/or refinance, projects that deliverenvironmental benefits. The Framework defines eligibility criteria in four areas:
1.
2.
3.
4.

Renewable Energy
Environmentally Sustainable Management of Living Natural Resources and Land Use
Sustainable Water and Wastewater Management
Pollution Prevention and Control

Marubeni engaged Sustainalytics to review the Marubeni Corporation Green Bond Framework, dated August
2021, and provide a Second-Party Opinion on the Framework’s environmental credentials and its alignment
with the Green Bond Principles 2021 (GBP).1 This Framework has been published in a separate document.2
Scope of work and limitations of Sustainalytics’ Second-Party Opinion
Sustainalytics’ Second-Party Opinion reflects Sustainalytics’ independent 3 opinion on the alignment of thereviewed Framework with the current market standards and the extent to which the eligible project categories
are credible and impactful.
As part of the Second-Party Opinion, Sustainalytics assessed the following:The Framework’s alignment with the GBP, as administered by ICMA;
The credibility and anticipated positive impacts of the use of proceeds; andThe alignment of the issuer’s sustainability strategy and performance and sustainability risk
management in relation to the use of proceeds.

For the use of proceeds assessment, Sustainalytics relied on its internal taxonomy, version 1.10.1, which isinformed by market practice and Sustainalytics’ expertise as an ESG research provider.
As part of this engagement, Sustainalytics held conversations with various members of Marubeni’s Finance
Department to understand the sustainability impact of their business processes and planned use of proceeds,
as well as management of proceeds and reporting aspects of the Framework. Marubeni representatives haveconfirmed (1) they understand it is the sole responsibility of Marubeni to ensure that the information provided
is complete, accurate or up to date; (2) that they have provided Sustainalytics with all relevant information and(3) that any provided material information has been duly disclosed in a timely manner. Sustainalytics also
reviewed relevant public documents and non-public information.
This document contains Sustainalytics’ opinion of the Framework and should be read in conjunction with that
Framework.
Any update of the present Second-Party Opinion will be conducted according to the agreed engagement
conditions between Sustainalytics and Marubeni.
Sustainalytics’ Second-Party Opinion, while reflecting on the alignment of the Framework with market
standards, is no guarantee of alignment nor warrants any alignment with future versions of relevant market
The Green Bond Principles are administered by the International Capital Market Association and are available at https://www.icmagroup.org/greensocial-and-sustainability-bonds/green-bond-principles-gbp/.
2
The Marubeni Corporation Green Bond Framework is available on Marubeni Corporation’s website at:https://www.marubeni.com/en/sustainability/greenbond/3
When operating multiple lines of business that serve a variety of client types, objective research is a cornerstone of Sustainalytics and ensuring analyst
independence is paramount to producing objective, actionable research. Sustainalytics has therefore put in place a robust conflict management
framework that specifically addresses the need for analyst independence, consistency of process, structural separation of commercial and research (andengagement) teams, data protection and systems separation. Last but not the least, analyst compensation is not directly tied to specific commercial
outcomes. One of Sustainalytics’ hallmarks is integrity, another is transparency.
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Marubeni Corporation Green Bond Framework
standards. Furthermore, Sustainalytics’ Second-Party Opinion addresses the anticipated impacts of eligible
projects expected to be financed with bond proceeds but does not measure the actual impact. The
measurement and reporting of the impact achieved through projects financed under the Framework is the
responsibility of the Framework owner.
In addition, the Second-Party Opinion opines on the potential allocation of proceeds but does not guarantee
the realised allocation of the bond proceeds towards eligible activities.
No information provided by Sustainalytics under the present Second-Party Opinion shall be considered as
being a statement, representation, warrant or argument, either in favour or against, the truthfulness, reliability
or completeness of any facts or statements and related surrounding circumstances that Marubeni has madeavailable to Sustainalytics for the purpose of this Second-Party Opinion.

Sustainalytics’ Opinion
Section 1: Sustainalytics’ Opinion on the Marubeni Corporation Green Bond
Framework
Sustainalytics is of the opinion that the Marubeni Corporation Green Bond Framework is credible andimpactful, and aligns to the four core components of the GBP. Sustainalytics highlights the following elementsof Marubeni’s Green Bond Framework:

Use of Proceeds:- The eligible categories – Renewable Energy, Environmentally Sustainable Management of Living
Natural Resources and Land Use, Sustainable Water and Wastewater Management, andPollution Prevention and Control – are aligned with those recognized by the GBP.
- For existing projects, Marubeni does not set a look-back period, as refinancing is limited toequity investments and CAPEX. Sustainalytics considers this to be aligned with market practice.
- The company has committed to Sustainalytics that when it makes equity investments, it will only
invest in pure players who engage exclusively in, or generate at least 90% of their sales from thebusinesses that meet the eligibility criteria defined in the Framework.
- In the Renewable Energy category, Marubeni intends to allocate the proceeds to financing or
refinancing to investment, development, construction, management, and/or operation &maintenance of solar, wind, geothermal, biomass, and hydro power generation facilities.
Sustainalytics positively assesses the Company’s use of proceeds, considering the following
elements:

All Renewable Energy projects are limited to those with the CO 2 emission amount ofless than 100 g CO2/kWh.
Regarding biomass power generation, Marubeni intends to invest in facilities that use
virgin wood (wood pellets) from sustainable forest management certified by Forest
Stewardship Council (FSC).

Hydro projects are limited to those with up to 25 MW in installed capacity.
- In the Environmentally Sustainable Management of Living Natural Resources and Land Use
category, Marubeni intends to allocate the proceeds to tree planting, management, operation &maintenance, and research & development in relation to afforestation that has received
international third-party forest certifications: FSC certification and Programme for theEndorsement of Forest Certification (PEFC). Sustainalytics positively assesses this use ofproceeds. Please see Appendix 1 for how Sustainalytics assesses each of these forest
certifications.
- In the Sustainable Water and Wastewater Management category, Marubeni intends to allocate
the proceeds to investment, development, construction, management, and/or operation &maintenance related to water and sewage projects. Sustainalytics views that water and sewage
projects help reduce natural environment pollution in local communities and mitigate negative
impacts on human health from unpurified water. Sustainalytics positively assesses theCompany’s environmentally friendly water and sewage projects.
- In the Pollution Prevention and Control category, Marubeni intends to focus the proceeds on
investment, research & development, and equipment investment related to magnesium refining
business. Recycling methods will include (1) extracting magnesium components from mine3

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Marubeni Corporation Green Bond Framework







tailings and producing virgin metal by electrolytic smelting, and (2) producing recycled alloy byrecycling magnesium scraps.

Sustainalytics notes that Marubeni intends to finance a specific project of magnesium
extraction from tailings deposited in an abandoned mine site, and that primarymagnesium will be derived from electrolysis process powered by renewable energy (i.e.,
low-carbon hydro) with an estimate of substantially lower GHG emissions than(approximately 95% lower than) conventional process 4 . Nonetheless, Sustainalytics
encourages the Company to monitor and report on emissions intensity.
With regard to (2), Marubeni procures magnesium scraps derived from manufacturing
and processing plants from external scrap dealers, and recycles them. Sustainalytics
considers this use of proceeds to be aligned with market practice.
Project Evaluation and Selection:- Marubeni Corporation’s process for evaluating and selecting projects is managed by the Finance
Department. The Finance Department, in consultation with the Sustainability Management
Department as well as relevant business units, checks the eligible green project candidates andconfirms the alignment between the projects and the eligiblility criteria defined in the Framework.
The CFO makes the final decision regarding the projects selected through this process.
Sustainalytics considers this process to be aligned with market practice.
- Marubeni has a process in place for the prior assessment of environmental and social risks
related to investment, loans, and development projects by using its Sustainability Assessment
Tool. This process is applied to all allocation decisions made under the Framework. With regard
to human rights, the Company sets out its Human Rights Policy 5 and manages relevant risks
under the Sustainability Assessment Tool. Sustainalytics views that the Company’s system for
managing environmental and social risks is adequate and is aligned with market practice.
Please see Section 2 for details.
Management of Proceeds:
Using an internal management system, the Finance Department tracks and manages the statusof proceeds’ allocation to eligible projects at least once a year. Marubeni intends to complete
the allocation of proceeds within 12 months after the bond issuance. In cases where any
proceeds remain unallocated, the amount equal thereto will be managed in cash and cash
equivalents.
Sustainalytics views that the Company’s regular tracking and management of the proceeds, theexpected allocation period of the proceeds, and the method for managing unallocated proceeds
are all aligned with market practice.
Reporting:- After the green bond issuance, until full allocation of the proceeds, Marubeni intends to reporton the proceeds’ allocation status and positive environmental impacts on its website once ayear.
- Regarding the proceeds’ allocation status, the amount of allocation and the outstanding balanceof unallocated funds will be disclosed on a project portfolio basis.
- Regarding positive environmental impacts, Marubeni is committed to reporting relevant
quantitative metrics, such as the amount of CO2 emissions reduced and the planting area ofafforestation, depending on project categories.
- It is also committed to obtaining post issuance reviews from an external review provider.
- Based on the proceeds’ allocation status, the frequency and availability of impact reporting, andMarubeni’s commitment to obtaining post issuance reviews, Sustainalytics considers theCompany’s reporting to be aligned with market practice.

Alignment with Green Bond Principles 2021
Sustainalytics has determined that the Marubeni Corporation Green Bond Framework aligns to the four corecomponents of the GBP. For detailed information please refer to Appendix 2: Green Bond/Green Bond
Programme External Review Form.

4
5

Marubeni Corporation, Press release, at: https://www.marubeni.com/en/news/2019/release/20191212E.pdf
Marubeni Corporation, ”Respect for Human Rights”, at: https://www.marubeni.com/en/sustainability/social/human_rights/
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Marubeni Corporation Green Bond Framework
Section 2: Sustainability Strategy of Marubeni
Contribution of framework to Marubeni Corporation’s sustainability strategy
In its Management Philosophy,6 Marubeni is committed to contributing to solving environmental and social
issues through business activities. It is working on sustainability with focus on the following four categories
of Environmental and Social Materiality: (1) Climate Change, (2) Sustainable Forestry, (3) Human Rights andCo-development with Communities, and (4) Sustainable and Resilient Value Chains. 7
As efforts to address climate change, Marubeni has formulated a long-term vision on climate change, 8 whichaims for achieving net-zero GHG emissions by 2050 and contributing to low-carbon/carbon-free goals throughbusiness activities. Within the Action Plans towards 2030, 9 consistent with these goals, Marubeni has set thefollowing targets: Against the 2019 level, halve the CO 2 emissions emitted by Marubeni and its consolidated
subsidiaries (Scope 1 and Scope 2); and, against the 2019 level, reduce by one fifth the CO 2 emissions emitted
by associate investees of the Marubeni Group (Scope 3, Category 15 (Investments)). Another target is toexpand the volume of carbon stocks in its forests from about 11 million tons of CO 2 equivalents in 2021 to 19
million tons. This will be achieved by enlarging afforestation, growing stock of forest per unit area, and throughthe proper management of managed forests.
As its climate change countermeasures, the Company aims to double its “Green Revenue” to 1.3 trillion yen by
FY2023 compared with FY2017. 10 Green revenue is defined as sales from six businesses, including
businesses dealing in power generation from renewable energy sources; products certified as contributing tosustainable forestry, fisheries, etc.; businesses (recycling-related, etc.) contributing to waste reduction;businesses (water business, etc.) contributing to efficient use of resources; businesses (real estate, etc.)
contributing to environmental impact; and businesses that contribute to the dissemination of EVs (electricvehicles). In terms of renewable energy business, Marubeni engages in solar, wind, geothermal, biomass, andmicro-scale hydro-power generation. It aims to increase the proportion of renewable energy power generationin the net generation capacity by its asset to approximately 20% by 2023.11
Based on Marubeni’s abovementioned policies and goals, Sustainalytics is of the opinion that the use ofproceeds defined in the Framework is in alignment with the Company’s sustainability strategy and supports
its initiatives to address key environmental and social issues.
Well-positioned to address common environmental and social risks associated with the projects
Sustainalytics recognizes that while eligible projects defined in the Framework are expected to provide positiveenvironmental impacts, they are exposed to environmental and social risks. Major risks include adverse
effects on ecosystems, noise and vibration, air pollution, workers health and safety, associated with thedevelopment and operation of large-scale facilities such as power generation and recycling facilities, as wellas environmental and social risks related to production sites for biomass fuel. In addition, as some of eligible
projects under the Renewable Energy category are located in Saudi Arabia, there might be risks associatedwith the human rights issues that the country is having. Sustainalytics is of the opinion that Marubeni is well
positioned to manage and reduce environmental and social risks associated with eligible projects through thefollowing policies and measures:Before embarking on new business loans and investments and pushing forward with development
projects, Marubeni uses a sustainability assessment tool 12 to identify environmental and social risks
associated with each project. For environmental risk assessment, the Company examines theimplementation status of environmental impact assessment required by laws and regulations in the
countries and regions where it operates and, based on its own standards, assesses items such as climatechange, environmental pollution, biodiversity, resource management, countermeasures, andmanagement procedures. Social risk assessment mainly covers occupational safety and health andMarubeni Corporation, ”Marubeni Management Philosophy”, at: https://www.marubeni.com/en/company/policy/
Marubeni Corporation, ”Materiality for Marubeni Group”, at: https://www.marubeni.com/en/sustainability/group/materiality/
8
Marubeni Corporation, ”The Marubeni Long-Term Vision on Climate Change: Towards Net-Zero GHG Emissions”, at:https://www.marubeni.com/en/news/2021/release/data/20210309E.pdf
9Marubeni Corporation, ”The Marubeni Long-Term Vision on Climate Change: Towards Net-Zero GHG Emissions”, at:https://www.marubeni.com/en/news/2021/release/data/20210309E.pdf
10Marubeni Corporation, ”Materiality for Marubeni Group”, at: https://www.marubeni.com/en/sustainability/group/materiality/
11
Marubeni Corporation, ”Climate Change”, at: https://www.marubeni.com/en/sustainability/environment/approach/
12
Marubeni Corporation, ”Our Views on Sustainability and Organization”, at: https://www.marubeni.com/en/sustainability/group/index.html
675

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Marubeni Corporation Green Bond Framework








human rights. If any risk is identified, the Company conducts additional examination and sees how thesituation is improved until all concerns are gone.
The Company has formulated its Basic Policy on Human Rights 13 and is committed to complying withhuman rights-related international standards, such as the UN’s Universal Declaration of Human Rights, 14
and applicable laws and regulations of the countries and regions where it operates.
The Company has formulated its Basic Policy on Occupational Health and Safety,15 which commits to(1) Continuous improvement of occupational health and safety management system, (2) Compliancewith applicable laws and regulations, (3) Fostering safety awareness through training, (4) Risk reduction
and continuous improvement of work environment, (5) Support for maintaining and promoting health,and (6) Highly transparent information disclosure. In this way, it is working to ensure healthy, safe
working environments for all Group employees and executives, as well as contractors, business partners,
other relevant stakeholders working at labor sites.
To reduce environmental and social risks throughout its supply chain, the Company has formulated its
Basic Supply Chain Sustainability Policy,16 which sets forth guidelines on (1) Observance of laws, (2)Respect for human rights, (3) Conservation of the environment, (4) Fair transactions, (5) Safety and health,(6) Quality control, and (7) Disclosure of information, and requires business partners to comply with them.
In an event that a vendor has failed to meet labor standards specified in these guidelines, the Company
requires the vendor to make improvements and, based on the progress of improvement measures taken,
examines whether to continue its relationship with the vendor.
Marubeni has formulated its Forest Management Policy,17 which applies to woodchip manufacturing andforest plantation operations. Based on this policy, the Company commits to complying with international
standards relevant to the forestry industry and has set 12 guidelines on sustainable forest management,
including forbiting forest plantation operations in forests with high conservation value (HCV) and on
peatland. It also commits to not tolerating any form of child labor or forced labor and to following theprinciple of Free, Prior and Informed Consent (FPIC) when starting new forestry operations on the lands
where indigenous and local communities hold legal or customary rights. Regarding the procurement ofwoodchips for biomass fuel, the Company commits itself, in its Procurement Policy for forest-derived
products,18 to not handling procured products produced from illegally logged timber, products procured
from suppliers involved in severe environmental and social controversies, such as the destruction of HCV
forests, and products from genetically modified wood. The Company also commits itself to promoting
the handling of materials certified by credible international forest certification systems. It also conducts
due diligence on its suppliers in order to achieve product procurement based on the Procurement Policy.

Section 3: Impact of Use of Proceeds
All four use of proceeds categories are aligned with those recognized by the GBP as project categories thatgenerate positive environmental impacts. Sustainalytics has focused on two below where the impact is
specifically relevant in the local context.
Importance of promoting renewable energy
CO2 emissions from the global power sector in 2019 was 13.6 Gt, accounting for 41% of energy-related CO 2
emissions.19 According to the International Energy Agency (IEA)’s Sustainable Development Scenario (SDS), 20
a scenario in line with climate targets of the Paris Agreement, the power sector needs to reduce CO 2 emissions
by 4% annually on average by 2030. In 2019, however, the sector reduced CO 2 emissions only by 1.3%,
significantly lower than the level suggested by the SDS.21 The SDS also requires the sector to dramaticallyincrease the proportion of renewable energy in power generation from 27% in 2019 to approximately 50% by2030.22In the Renewable Energy category, Marubeni intends to allocate the green bond proceeds to projects related
to solar, wind, geothermal, biomass, and hydro power generation inside and outside Japan. In Japan in FY2019,
Marubeni Corporation, ”Respect for Human Rights”, at: https://www.marubeni.com/en/sustainability/social/human_rights/
Office of the High Commissioner for Human Rights (UN Human Rights), “The Universal Declaration of Human Rights”, at :https://www.ohchr.org/EN/UDHR/Pages/UDHRIndex.aspx
15
Marubeni Corporation, ”Ensuring Occupational Health and Safety”, at: https://www.marubeni.com/en/sustainability/social/safety/
16
Marubeni Corporation, ”Basic Supply Chain Sustainability Policy”, at: https://www.marubeni.com/en/sustainability/social/supply_chain/
17
Marubeni Corporation, ”Sustainable Forestry”, at: https://www.marubeni.com/en/sustainability/environment/forest/
18
Marubeni Corporation, “Sustainable Forestry”, at: https://www.marubeni.com/en/sustainability/environment/forest/
19
International Energy Agency (IEA), ”Tracking Power 2020”, at : https://www.iea.org/reports/tracking-power-2020
20
International Energy Agency (IEA), ” Report extract Sustainable Development Scenario”, at : https://www.iea.org/reports/world-energymodel/sustainable-development-scenario
21International Energy Agency (IEA), ”Tracking Power 2020”, at : https://www.iea.org/reports/tracking-power-2020
22
International Energy Agency (IEA), ”Renewable Power”, at : https://www.iea.org/reports/tracking-power-2020/renewable-power
13
14

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Marubeni Corporation Green Bond Framework
while the proportion of renewable energy in total power generation was 18.1%, fossil fuel-based thermal power
generation accounted for 75.7%.23 In April 2021, the Japanese government committed itself to reducing GHG
emissions by 46% compared with FY2013 levels by FY2030. 24 As part of the energy mix aligned with thiscommitment, it is considering to increase the proportion of renewable energy to 36–38% by FY2030. 25
Furthermore, having committed to net-zero GHG emissions by 2050, the government has formulated a Green
Growth Strategy,26 which describes the policy direction and action plan towards achieving carbon neutrality in
2050. In the Strategy, the government expresses its intent to promote the use of renewable energy, setting areference target of covering 50–60% of electric power generation with renewable energy.
Considering the above, Sustainalytics views that Marubeni’s use of proceeds in the Renewable Energy
category contributes to the reduction of CO2 emissions by the global power sector and Japan’s achievementof medium- to long-term climate change targets.
Contribution to the reduction in GHG emissions through sustainable forest management
According to the UN’s Intergovernmental Panel on Climate Change (IPCC), the forest sector (forestry and otherland use changes) can contribute to reducing GHG emissions through prevention of emissions to theatmosphere by conserving existing carbon pools in soils or vegetation and through increasing the size ofexisting carbon pools and thereby extracting carbon dioxide (CO 2) from the atmosphere.27 On the other hand,deforestation and forest degradation may cause stored GHG to be emitted back into the atmosphere.28 The
forest sector accounted for 11% of the world’s total GHG emissions in 2010.29 The conservation and expansionof forests plays an important role in reducing GHG emissions.
In the Environmentally Sustainable Management of Living Natural Resources and Land Use category, Marubeni
intends to allocate the proceeds to afforestation that have received FSC or PEFC certification mainly inIndonesia, which has been facing deforestation and forest degradation since the 1970s.30 In Indonesia, 63%
of GHG emissions are caused by forestry and other land use changes as well as peatland and forest fires. 31 In
its Nationally Determined Contribution (NDC) submitted to the UN in 2021, 32 Indonesia expressed its
determination to reduce GHG emissions by 29% by 2030, compared with those in the business-as-usual
scenario (Unconditional reduction scenario 1). 33 Furthermore, it eyes the possibility of reducing GHG
emissions even by 41% with the help of international communities (Conditional reduction scenario 2). 34 To
those ends, Indonesia has set aggressive goals of reducing GHG emissions from the forest sector (land usechange and forestry) by 66% compared with 2010 levels by 2030 in Scenario 1 and even by 89% in Scenario 2.
The government aims to achieve these goals through such measures as restoring 12 million-hectare degraded
land, preventing deforestation and forest degradation, afforestation and reforestation, and sustainable forest
management.

“Agency for Natural Resources and Energy, “FY2019 Energy Supply and Demand Report (Final Figures) (Japanese only)”, at:https://www.meti.go.jp/press/2021/04/20210413004/20210413004-1.pdf
24
Press conference by the Prime Minister on the greenhouse gas reduction targets and the declaration of a state of emergency,” the Office of the Prime
Minister”, at: https://www.kantei.go.jp/jp/99_suga/statement/2021/0422kaiken.html
25
Ministry of Economy, Trade and Industry, "Outline of the Basic Energy Plan (Draft)", at:https://www.enecho.meti.go.jp/committee/council/basic_policy_subcommittee/2021/046/046_004.pdf
26
Ministry of Economy, Trade and Industry, “Green Growth Strategy through Achieving Carbon Neutrality in 2050 (Japanese only)”, at:https://www.meti.go.jp/press/2021/06/20210618005/20210618005-3.pdf
27
Intergovernmental Panel on Climate Change (IPCC), “Climate Change 2014 Synthesis Report”, at:https://www.ipcc.ch/site/assets/uploads/2018/02/SYR_AR5_FINAL_full.pdf
28World Wide Fund for Nature (WWF）, ”INDC Analysis: An Overview of the Forest Sector” , at:https://wwfint.awsassets.panda.org/downloads/r2_wwf_indc_brief.pdf
29
Intergovernmental Panel on Climate Change (IPCC), “Climate Change 2014 Synthesis Report”, at:https://www.ipcc.ch/site/assets/uploads/2018/02/SYR_AR5_FINAL_full.pdf
30
Natural Environment Planning Division, Nature Conservation Bureau, Ministry of the Environment, "Forests of the World and Conservation Methods", at:
http://www.env.go.jp/nature/shinrin/fpp/worldforest/index4-2.html
31“Updated Nationally Determined Contribution Republic of Indonesia 2021”, at:https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Indonesia%20First/Updated%20NDC%20Indonesia%202021%20%20corrected%20version.pdf
32“Updated Nationally Determined Contribution Republic of Indonesia 2021”, at:https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Indonesia%20First/Updated%20NDC%20Indonesia%202021%20%20corrected%20version.pdf
33
Unconditional reduction scenario 1 is a GHG emission reduction scenario in which a county makes self-help efforts to reduce emissions without
international support.
34
Conditional reduction scenario 2 is a GHG emission reduction scenario in which a county makes self-help efforts and receives international support to
reduce emissions.
23

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Marubeni Corporation Green Bond Framework
Based on the above, Sustainalytics is of the opinion that Marubeni’s use of proceeds in the Environmentally
Sustainable Management of Living Natural Resources and Land Use category contributes to restoring forestsand soil in Indonesia, helps it achieve its climate targets, and contributes to global GHG emission reduction
through international forest conservation.
Alignment with/contribution to SDGs
The Sustainable Development Goals (SDGs) were set in September 2015 by the United Nations General
Assembly and form an agenda for achieving sustainable development by the year 2030. The bond(s) issued
under the Marubeni Corporation Green Bond Framework advances the following SDGs and targets:
Use of Proceeds
Category
Renewable Energy

SDG

SDG target

7. Affordable and clean
energy7.2 By 2030, increase substantially the share of
renewable energy in the global energy mix

15. Life on land

15.b Mobilize significant resources from all
sources and at all levels to finance sustainable
forest management and provide adequate
incentives to developing countries to advancesuch management, including for conservation
and reforestation

6. Clean water andsanitation

6.3 By 2030, improve water quality by reducing
pollution, eliminating dumping and minimizing
release of hazardous chemicals and materials,
halving the proportion of untreated wastewaterand substantially increasing recycling and safe
reuse globally

12. Responsible
consumption andproduction

12.5 By 2030, substantially reduce waste
generation through prevention, reduction,
recycling and reuse

Environmentally
Sustainable Managementof Living Natural
Resources and Land Use

Sustainable Water andWastewater
Management
Pollution Prevention andControl

Conclusion
Marubeni has developed the Marubeni Corporation Green Bond Framework under which it may issue green
bonds and use the proceeds to finance and/or refinance projects related to Renewable Energy,
Environmentally Sustainable Management of Living Natural Resources and Land Use, Sustainable Water andWastewater Management, and Pollution Prevention and Control. Sustainalytics considers that the projects
funded by the green bond proceeds are expected to have provide positive environmental impact.
The Framework outlines a process by which proceeds will be tracked, allocated, and managed, andcommitments have been made for reporting on the allocation and impact of the use of proceeds. Furthermore,
Sustainalytics believes that the Framework is aligned with the Company’s sustainability strategy and that theuse of proceeds categories will contribute to the advancement of the UN Sustainable Development Goals 6,
7, 12 and 15. Additionally, Sustainalytics is of the opinion that Marubeni has adequate measures to identify,
manage and mitigate environmental and social risks commonly associated with the eligible projects fundedby the use of proceeds.
Based on the above, Sustainalytics is of the opinion that Marubeni is well-positioned to issue green bonds andthat the Framework is robust, transparent, and in alignment with the four core components of the GBP.

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Appendices
Appendix 1: Sustainalytics’ Analysis of FSC and PEFC Certifications
FSC

PEFC

Background

Founded in 1993 after the 1992 Earth
Summit in Rio failed to produce any
international agreements to fight against
deforestation, FSC aims to promotesustainable forest management practice.

Basic Principles



PEFC was founded in 1999 in response to thespecific requirements of small- and family forest
ownersasaninternationalumbrellaorganization
providing
independent
assessment, endorsement and recognition ofnational forest certification systems.

Maintenance and appropriateenhancement of forest resources and theircontribution to the global carbon cycle
Maintenance and enhancement of forest
ecosystem health and vitality

Maintenance and encouragement of
productive functions of forests (wood andno-wood)
Maintenance, conservation and appropriateenhancement of biological diversity inforest ecosystems

Maintenance and appropriateenhancement of protective functions inforest management (notably soil andwater)

Maintenance of socioeconomic functions
and conditions
Compliance with legal requirements











GovernanceCompliance with laws and FSC
principles
Tenure and use rights andresponsibilities
Indigenous peoples' rights
Community relations and workers'
rightsBenefits from the forests
Environmental impact
Management plans
Monitoring and assessment
Special sites – high conservation value
forests (HCVF)
Plantations

The General Assembly, consisting of all FSC
members, constitutes the highest decisionmaking
body.
At the General Assembly, motions areproposed by one member, seconded by two
more, and deliberated and voted on by all
members. Members are entitled to vote toamend the bylaws, initiate new policies, andclarify, amend or overturn a policy decisionbytheboard.
Members apply to join one of threechambers – environmental, social, or
economic – that are further divided into
northern and southern sub-chambers.
Each chamber holds 33.3% of the weight invotes, and within each chamber the votes
are weighted so that the North and South
hold an equal portion of authority, to ensure
influence is shared equitably between
interest groups and countries with different
levelsofeconomicdevelopment.
The votes of all individual members in each
sub-chamber represent 10% of the total voteof the sub-chamber, while the votes ofPEFC’s governance structure is formed by theGeneral Assembly (GA) which is the highest
authority and decision-making body. It is madeup of all PEFC members, including national andinternational stakeholders.
Members vote on key decisions including
endorsements, international standards, newmembers, statutes and budgets. All national
members have between one and seven votes,
depending on membership fees, whileinternational stakeholder members have one
vote each.
The Board of Directors supports the work of the
GA and together the GA and the Board make theformal approval of final draft standards.
Standards are developed by working groups.
In general, PEFC’s governance structure is more
representative of industry and government
stakeholders than of social or environmentalgroups, which gives industry and governments
more influence in the decision-making process.
However, the organization does include
stakeholders from all sectors.

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organizational members make up the other
90%.

Scope

Chain-of-CustodyNon-certified wood sources

The members vote for the board of directors,
which is accountable to the members. Thereis an international board elected by all
members and a US board, elected by the USbased members.
FSC is a global, multi-stakeholder owned
system. All FSC standards and policies are
set by a consultative process. There is an
FSC Global standard and for certain
countries
FSC
National
standards.
Economic, social, and environmental
interests have equal weight in the standard
setting process. FSC follows the ISEAL Codeof Good Practice for Setting Social andEnvironmental Standards.
 The Chain-of-Custody (CoC) standard
is evaluated by a third-party body thatis accredited by FSC and compliant
with international standards.
 CoC standard includes procedures for
tracking wood origin.
 CoC standard includes specifications
for the physical separation of certified
and non-certified wood, and for thepercentage of mixed content (certified
and non-certified) of products.
 CoC certificates state the geographicallocation of the producer and thestandards against which the process
was evaluated. Certificates also state
the starting and finishing point of the
CoC.

FSC’s
Controlled
WoodStandard
establishes requirements to participants toestablish supply-chain control systems, anddocumentation to avoid sourcing materials
from controversial sources, including:
a.

b.

35

Illegally harvested wood, including
wood that is harvested without
legal authorization, from protectedareas, without payment ofappropriate taxes and fees, using
fraudulent papers andmechanisms, in violation of CITES
requirements, and others,
Wood harvested in violation of
traditional and civil rights,

Multi-stakeholder participation is required in thegovernance of national schemes as well as in
the standard-setting process. Standards andnormative documents are reviewed periodicallyat intervals that do not exceed five years. The
PEFC Standard Setting standard is based on
ISO/IEC Code for good practice forstandardization (Guide 59)35 and the ISEAL Codeof Good Practice for Setting Social andEnvironmental Standards.
 Quality or environmental management
systems (ISO 9001:2008 or ISO
14001:2004 respectively) may be used to
implement the minimum requirements forchain-of-custody management systems
required by PEFC.
 Only accredited certification bodies canundertake certification.
 CoC requirements include specifications
for physical separation of wood andpercentage-based methods for productswith mixed content.
 The CoC standard includes specifications
for tracking and collecting and maintaining
documentation about the origin of thematerials.
 The CoC standard includes specifications
for the physical separation of certified andnon-certified wood.
 The CoC standard includes specifications
about procedures for dealing withcomplains related to participant’s chain ofcustody.
The PEFC’s Due Diligence System requires
participants to establish systems to minimize
the risk of sourcing raw materials from:a.

forest management activities that do
not comply with local, national orinternational laws related to:o operations and harvesting,including land use
conversion,o management of areas withdesignated highenvironmental and culturalvalues,o protected and endangered
species, including CITES
species,ISO, “ISO/IEC Guide 59:2019”, (2019), at: https://www.iso.org/standard/23390.html.
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c.

d.

e.

Accreditation/verification

Conclusion

Wood harvested in forests wherehigh conservation values are
threatened by management
activities,
Wood harvested in forests being
converted from forests and otherwooded ecosystems toplantations or non-forest uses,
Wood from management units inwhich genetically modified trees
are planted.

FSC-accredited Certification Bodies (CB)conduct an initial assessment, uponsuccessful completion companies are
granted a 5-year certificate. Companies
must undergo an annual audit every year anda reassessment audit every 5 years.
Certification Bodies undergo annual audits
from Accreditation Services International(ASI) to ensure conformance with ISO
standard requirements.

health and labor issues,
indigenous peoples’ property,
tenure and use rights,
o payment of royalties andtaxes.
genetically modified organisms,
forest conversion, including
conversion of primary forests to forest
plantations.

o
o

b.
c.

Accreditation is carried out by an accreditationbody (AB). Like a certification body checks acompany meets the PEFC standard, theaccreditation body checks that a certificationbody meets specific PEFC and ISO
requirements. Through the accreditation
process PEFC has assurance that certification
bodies are independent and impartial, that they
follow PEFC certification procedures.

PEFC does not have their own accreditation
body. Like with the majority of ISO based
certifications, PEFC relies on national ABs under
the umbrella of the International Accreditation
Forum (IAF). National ABs need to be a memberof the IAF, which means they must follow IAF’s
rules and regulations.
Sustainalytics views both FSC and PEFC as being robust, credible standards that are based oncomprehensive principles and criteria that are aligned with ISO. Both schemes have received
praise for their contribution to sustainable forest management practices 36 and both have also
faced criticism from civil society actors.37,38 In certain instances, these standards go above andbeyond national regulation and are capable of providing a high level of assurance thatsustainable forest management practices are in place. However, in other cases, the standards
are similar or equal to national legislation and provide little additional assurance. Ultimately, thelevel of assurance that can be provided by either scheme is contingent upon several factors
including the certification bodies conducting audits, national regulations and local context.

FESPA, “FSC, PEFC and ISO 38200”, (2018), at: https://www.fespa.com/en/news-media/blog/fsc-pefc-and-iso-38200.
Yale
Environment
360,“Greenwashed
Timber:How
Sustainable
ForestCertification
Has
https://e360.yale.edu/features/greenwashed-timber-how-sustainable-forest-certification-has-failed.
38
EIA,“PEFC: A Fig Leaf for Stolen Timber”, (2017), at: https://eia-global.org/blog-posts/PEFC-fig-leaf-for-stolen-timber.
36
37

Failed”,(2018),

at:11

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Appendix 2: Green Bond / Green Bond Programme - External Review Form
Section 1. Basic Information
Issuer name:Marubeni Corporation

Green Bond ISIN or Issuer Green Bond Framework
Name, if applicable:

Marubeni Corporation Green Bond Framework

Review provider’s name:

Sustainalytics

Completion date of this form:

August 26, 2021

Publication date of review publication:

Section 2. Review overview
SCOPE OF REVIEWThe following may be used or adapted, where appropriate, to summarise the scope of the review.
The review assessed the following elements and confirmed their alignment with the GBP:☒

Use of Proceeds☒

Process for Project Evaluation and
Selection☒

Management of Proceeds☒

Reporting

ROLE(S) OF REVIEW PROVIDER☒

Consultancy (incl. 2nd opinion)☐

Certification☐

Verification☐

Rating☐Other (please specify):
Note: In case of multiple reviews / different providers, please provide separate forms for each review.

EXECUTIVE SUMMARY OF REVIEW and/or LINK TO FULL REVIEW (if applicable)
Please refer to Evaluation Summary above.

Section 3. Detailed review
Reviewers are encouraged to provide the information below to the extent possible and use the comment
section to explain the scope of their review.
1. USE OF PROCEEDS
Overall comment on section (if applicable):
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The eligible categories for the use of proceeds Renewable Energy, Environmentally Sustainable Managementof Living Natural Resources and Land Use, Sustainable Water and Wastewater Management, and Pollution
Prevention and Control, are aligned with those recognized by the Green Bond Principles. Sustainalytics
considers that investments in the eligible categories will lead to positive environmental impacts and advance
the UN Sustainable Development Goals, specifically SDGs 6, 7 ,12 and 15.

Use of proceeds categories as per GBP:☒

Renewable energy☐

Energy efficiency☒

Pollution prevention and control☒

Environmentally sustainable management ofliving natural resources and land use☐

Terrestrial and aquatic biodiversity
conservation☐

Clean transportation☒

Sustainable water and wastewater
management☐

Climate change adaptation☐

Eco-efficient and/or circular economy
adapted products, production technologies
and processes☐

Green buildings☐

Unknown at issuance but currently expected
to conform with GBP categories, or othereligible areas not yet stated in GBP☐

Other (please specify):

If applicable please specify the environmental taxonomy, if other than GBP:

2. PROCESS FOR PROJECT EVALUATION AND SELECTION
Overall comment on section (if applicable):
Marubeni Corporation’s process for evaluating and selecting projects is managed by the Finance Department.
The Finance Department, in consultation with the Sustainability Management Department as well as relevantbusiness units, checks the eligible green project candidates and confirms the alignment between the projects
and the eligible criteria defined in the Framework. The CFO makes the final decision regarding the projects
selected through this process. The process of prior assessment of environmental and social risks using
Marubeni’s sustainability assessment tool is applied to all allocation decisions made under the Framework.
Sustainalytics considers this risk management system to be adequate. Sustainalytics considers the project
selection process in line with market practice.

Evaluation and selection☒

Credentials on the issuer’s environmental
sustainability objectives☒

Documented process to determine thatprojects fit within defined categories☒

Defined and transparent criteria for projects
eligible for Green Bond proceeds☒

Documented process to identify andmanage potential ESG risks associatedwith the project13

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Marubeni Corporation Green Bond Framework☒

Summary criteria for project evaluation andselection publicly available☐

Other (please specify):☐

In-house assessment

Information on Responsibilities and Accountability☒

Evaluation / Selection criteria subject toexternal advice or verification☐

Other (please specify):

3. MANAGEMENT OF PROCEEDS
Overall comment on section (if applicable):
Marubeni Corporation’s process for the management of proceeds is implemented through the Finance
Department. Using an internal management system, Marubeni Corporation tracks and manages the status ofproceeds’ allocation to eligible projects at least once a year. In cases where any proceeds remain unallocated,
the amount equal thereto will be managed in cash and cash equivalents. Marubeni Corporation’s processes
for management of proceeds is in line with market practice.

Tracking of proceeds:☒

Green Bond proceeds segregated or tracked by the issuer in an appropriate manner☒Disclosure of intended types of temporary investment instruments for unallocatedproceeds☐

Other (please specify):

Additional disclosure:☐

Allocations to future investments only☒

Allocations to both existing and future
investments☐

Allocation to individual disbursements☐

Allocation to a portfolio of
disbursements☐

Disclosure of portfolio balance of
unallocated proceeds☐

Other (please specify):

4. REPORTING
Overall comment on section (if applicable):
Until full allocation of the proceeds, Marubeni Corporation intends to report on the proceeds’ allocation status
and positive environmental impacts on its website once a year. Marubeni Corporation is also committed toreporting relevant impact indicators and obtaining post issuance reviews from an independent reviewer.
Sustainalytics views Marubeni Corporation’s allocation and impact reporting as aligned with market practice.

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Use of proceeds reporting:☐

Project-by-project☒

On a project portfolio basis☐

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

Information reported:☒

Allocated amounts☒

Other (please specify): Thebalance of any unallocatedproceeds and information on
how unallocated proceeds, if any,
have been held in line with theguideline set in the“Management of the Proceeds”☐

Green Bond financed share of total
investment☐

Semi-annual

Frequency:☒

Annual☐Other (please specify):

Impact reporting:☐

Project-by-project☒

On a project portfolio basis☐

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

Information reported (expected or ex-post):☒

GHG Emissions / Savings☐

Energy Savings☐

Decrease in water use☒

Other ESG indicators (please
specify): Power generation
capacity (MW) for renewableenergy, planting area (ha) ofafforestation certified by
FSC/PEFC, water
management capacity ofwater supply and sewage,
magnesium smelting
capacity (t) of magnesium
refining☐

Semi-annual

Frequency☒

Annual☐Other (please specify):

Means of Disclosure☐

Information published in financial report☐

Information published in sustainability
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Information published in ad hoc
documents☐

Reporting reviewed (if yes, please specify which parts of the reporting are subject toexternal review):☒

Other (please specify): Within the
Company’s website

Where appropriate, please specify name and date of publication in the useful links section.
USEFUL LINKS (e.g. to review provider methodology or credentials, to issuer’s documentation, etc.)

SPECIFY OTHER EXTERNAL REVIEWS AVAILABLE, IF APPROPRIATE
Type(s) of Review provided:☐

Consultancy (incl. 2nd opinion)☐

Certification☐

Verification / Audit☐

Rating☐Other (please specify):

Review provider(s):Date of publication:

ABOUT ROLE(S) OF INDEPENDENT REVIEW PROVIDERS AS DEFINED BY THE GBPi.

Second-Party Opinion: An institution with environmental expertise, that is independent from the issuer may
issue a Second-Party Opinion. The institution should be independent from the issuer’s adviser for its Green
Bond framework, or appropriate procedures, such as information barriers, will have been implemented within
the institution to ensure the independence of the Second-Party Opinion. It normally entails an assessment of
the alignment with the Green Bond Principles. In particular, it can include an assessment of the issuer’s
overarching objectives, strategy, policy and/or processes relating to environmental sustainability, and anevaluation of the environmental features of the type of projects intended for the Use of Proceeds.

ii.

Verification: An issuer can obtain independent verification against a designated set of criteria, typicallypertaining to business processes and/or environmental criteria. Verification may focus on alignment withinternal or external standards or claims made by the issuer. Also, evaluation of the environmentally
sustainable features of underlying assets may be termed verification and may reference external criteria.
Assurance or attestation regarding an issuer’s internal tracking method for use of proceeds, allocation offunds from Green Bond proceeds, statement of environmental impact or alignment of reporting with the GBP,
may also be termed verification.

iii.

Certification: An issuer can have its Green Bond or associated Green Bond framework or Use of Proceeds
certified against a recognised external green standard or label. A standard or label defines specific criteria,
and alignment with such criteria is normally tested by qualified, accredited third parties, which may verify
consistency with the certification criteria.

iv.

Green Bond Scoring/Rating: An issuer can have its Green Bond, associated Green Bond framework or a key
feature such as Use of Proceeds evaluated or assessed by qualified third parties, such as specialised research
providers or rating agencies, according to an established scoring/rating methodology. The output may include
a focus on environmental performance data, the process relative to the GBP, or another benchmark, such as
a 2-degree climate change scenario. Such scoring/rating is distinct from credit ratings, which may
nonetheless reflect material environmental risks.

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