20-D-1282

March 3, 2021
JCR Green Bond Evaluation b y Japan Credit Rating Agenc y, Ltd.
Japan Credit Rating Agency, Ltd. (JCR) announces the Annual Review Results of its Green Bond Evaluation.

JCR Reviewed Green Bond Evaluation on
Bonds of Fuyo General Lease Co., Ltd.
Subject:

Fuyo General Lease Co., Ltd.'s 17th unsecured corporate
bonds (limited to corporate bonds with a special agreement on
the same priority) (Green Bond)

Type

:

Bonds

Issue amount:JPY 10 billion

Interest rate:

0.210%

Date of Issuance:

November 2, 2018

Redemption Date:

November 2, 2023

Method of Repayment:

BulletUse of proceeds:

Refinancing and new investment for construction ofphotovoltaic power generation facilities<Green Bond Review Results>
Overall Evaluation

Green 1

Greenness Evaluation(Use of Proceeds)
Management, Operation, andTransparency Evaluation

g1
m1

1. Evaluation Overview
On October 26, 2018, JCR assigned "Green 1" for the "JCR Green Bond Evaluation" to unsecured corporate bonds (the"Bonds") of Fuyo General Lease Co., Ltd. The proceeds of the Bonds were used to refinance the fund for constructing
new and existing solar power generation facilities.
Fuyo General Lease Co., Ltd. (the “Company”) is a general leasing company established in 1969 by six Fuyo Group
companies centered on the former Marubeni Iida (currently named as Marubeni) and the former Fuji Bank (currently
named as Mizuho Bank). Its strengths lie in leasing information-related equipment, office equipment, and real estate.
The company is actively engaged in M&A and business alliances and is expanding its business domains.

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The subject to be evaluated is 5-year unsecured bonds issued by the Company in November 2018. The proceeds fromthe issuance of the Bonds will be used to refinance our capital to construct its existing and new solar power generation
facilities. At the time of the issuance, JCR confirmed that the Company’s department in charge had scrutinized theoutline and risks assumed in the operation of the solar power generation facilities for all of its solar power generation
facilities. As a result, JCR evaluated that there was little possibility of a serious negative effect on the environment
exceeding the environmental improvement effect, and that they are green projects which greatly contributes to the CO2
emission reduction.
Through the review of the Bonds, JCR confirmed that all of the four projects which are subject to the use of the proceeds
are without change from the outset, and that all of these solar power generation facilities were being operated without
problem. JCR also confirmed that the management and operation system is being maintained as originally planned, andthat appropriate disclosure is being made.
As a result of the above reviews based on the JCR Green Finance Evaluation Methodology, JCR maintained "g1" for"Greenness Evaluation (Use of Proceeds)" and "m1" for "Management, Operation and Transparency Evaluation."
Consequently, JCR maintained "Green 1" as the overall evaluation to the Bonds. The evaluation results are described indetail in the next chapter. The Bonds are also considered to meet the standards for items required by the Green Bond
Principles1 and the Ministry of the Environment's Green Bond Guidelines2.

2. Post-issuance Review Items
In this section, JCR describes the items to be confirmed in the post-issuance review. The review focuses on items whose
content has changed compared with the previous evaluation period.

(1) Use of Proceeds (Status of Appropriation)
JCR evaluates if the management of funds procured by the Bonds and the appropriation of funds procured forgreen projects been properly carried out in a manner specified by the issuer at the time of assigning the Green
Bond Evaluation.

(2) Appropriateness and Transparency Concerning Selection Standard and Processes of the Use ofProceeds
JCR evaluates if there are any changes to the objectives to be achieved through the Bonds, the criteria for
selecting green projects, the adequacy of the process, and the series of processes to be implemented.

(3) Appropriateness and Transparency of Management of the Proceeds
JCR evaluates whether the proceeds have been certainly allocated for green projects or not. JCR also evaluates
if there is a system and internal system in which the allocation status can be easily tracked and managed.

(4) Reporting
JCR evaluates if the environmental improvement effects resulting from the green project financed by the funds
procured by the Bonds are appropriately calculated according to the method stipulated by the issuer at the timeof assigning the Green Bond Evaluation.

(5) Environmental Initiatives of the Organization
JCR evaluates if the issuer's management is continuing to regard environmental issues as a high priority issue.

1

ICMA(International Capital Market Association) Green Bond Principles 2018 Edition
https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/2

http://greenbondplatform.env.go.jp/pdf/greenbond_guideline2017.pdf, Ministry of the Environment Green Bond Guidelines 20172/6
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3. Contents of Review(1) Use of Proceeds (Status of Appropriation)a.

The projects which are subject to the use of the proceeds are 4 solar power generating facilities.

<Outline of Use of Funds>
Project Name

Shichikashuku
Narahaoya
Namie Sakai I
Namie Sakai II
Sum

Location

OutputCapacity(kW)*Annual Power
Generation(Estimate)(MWh)**

Annual CO 2
Reduction(Estimate)(t-CO2)***

13,90912,868

6,717

23,94024,044

10,62732,601
27,33431,884
26,733
95,52914,093
11,81643,253

Katta-gun Shichikashuku
Town, Miyagi
Futaba-gun Narama Town,
Fukushima
Futaba-gun Namie Town,
Fukushima*: Electricity consumption on an output size basis is shown.
** : Annual Power Generation (Estimate) is based on the Company's planned power generation for FY 2021.
*** : Calculating CO2 reductions = Assumed annual power generation x Adjusted emissions factors.
Regarding the adjusted emission coefficient, figures are published by the Ministry of the Environment for eachpower company and for each fiscal year.

b.

All projects subject to the use of funds have been completed and commenced operations. JCR confirmed
through an interview with the Company that there were no events such as shutdown of the operation, etc.
due to damage to the facilities of the subject project.

c.

Significant negative impacts on the environment have not been identified, including significant sedimentrelated disasters and complaints from local residents.

(2) Appropriateness and Transparency Concerning Selection Criteria and Processes of the Use ofProceeds
At the time of this evaluation last year, JCR evaluated that the Company’s selection criteria and the process forsolar power generation facilities as appropriate. At this time, the selection criteria and the process of theCompany have not been changed, and JCR evaluated that these selection criteria are still appropriate.

(3) Appropriateness and Transparency of Management of the Proceeds
JCR evaluated the Company’s cash management as appropriate at the time of the previous evaluation. The
entire amount of the proceeds for the issuance of the Bonds has been appropriated for the refinancing of funds
for the construction of solar-related facilities, etc. promptly after the issuance, and there will be no unallocatedfunds.

(4) Reportinga. Reporting on the Status of Fund Allocation
The entire amount of the proceeds in lieu of the issuance of the Bonds is disclosed on the Company's websitethat they are immediately appropriated for the refinancing of funds for the construction of solar power-related
facilities and other matters specified in advance after the issuance. Reporting on fund appropriations is therefore
undertaken appropriately.
b. Reporting on Environmental Improvement Effects
The Company discloses the theoretical figures of the estimated annual power generation and CO2 savings forthe entire target of the use of funds as a report on the environmental improvement effects. At the time of theimplementation of this review, JCR confirmed that the above theoretical values were properly disclosed.
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(5) Organizational Environmental Initiatives
The Company is the core company of the Fuyo Lease Group, which is composed of the Company and its groupcompanies. In light of the importance of environmental initiatives as a core company, JCR assessed that theGroup's initiatives could be viewed in short as the Company's initiatives.
The Fuyo Lease Group, composed of the Company and Group companies, identifies materiality in four steps
that incorporate the perspectives and requests of internal and external stakeholders. Materiality consists of six
items: "Addressing Climate Change Issues and Renewable Energy," "Promoting Health and Welfare," "Providing
Safe and Living Urban Development and Transportation Methods," "Realizing Economic Growth and Job
Satisfaction," "Contributing to the Establishment of a Recycling-Oriented Society," and "Diversity and Work
Style Reform." Each materiality has been disclosed with the themes of initiatives, the goals to be achieved, theKPIs, and the contributions to society and the environment (outcomes). As shown that the company also clarifies
its stance of working on each issue and the status of achievement in addition to its stance on the issues theCompany considers important.
Among the materiality items, the Company indicated “Expanding the Supply of Renewable Energy”, which
relates to the use of proceeds of the Bonds, as one of the themes for initiatives under "Addressing Climate Change
Issues and Renewable Energy".

In the "Renewable Energy Conversion of Fuyo Lease Group's Businesses toConsume Electricity,", which is also one of the themes under the same materiality, s,

the Company is aiming

to launch initiatives to promote the use of renewable energy throughout the Group following the Company's
joining RE100 in September 2018 as the first company in the leasing industry. The Company also indicated"support for the spread of renewable energy through the provision of financial services," an approach unique tothe financial industry as its theme for initiatives. The Fuyo Zero Carbon City Support Program3, which beganproviding services in October 2020, is one of the specific initiatives related to such themes. The Company has
set a quantitative target for the transaction volume of the program as one of the sustainability performance target
for the Sustainability Linked Bonds issued by the Company in December 2020, etc., and its attitude is considered
to be ambitious. Through these concrete initiatives, the Company intends to facilitate initiatives to reduce load
to environment broadly by including small and medium enterprises in addition to working on the issues on its
own.

Under the Frontier Expansion2021 medium-term management plan, which covers the period from fiscal

2017 to fiscal 2021, the Company indicated that energy and environment as a growth driver areas wheremanagement resources are concentrated in "Selection and Concentration of Strategic Fields", one of the threestrategic pillars. The Company is steadily pursuing environmental initiatives through its businesses, such as
achieving a 200MW green energy supply scale through the solar power generation business, a KPI set in themateriality of the plan, as of the end of March 2020. The Company’s system to perform initiatives forenvironment issues has become stronger including

establishment of the CSV Promotion Committee in October

2020 as an organization to set targets, monitor, and improve on the Group's CSV strategy, materiality, and ESG.
The Company not only actively proposes and provides products and services in environmental-related fields
through its leasing business, but also is actively promoting green energy supply as a renewable energy operator
on its own. The establishment of clear numerical targets in the Integrated Report and steady efforts toward them
have increased the viability of the organization's environmental efforts and are highly evaluated.

3

A program aimed at contributing to decarbonization in the Zero Carbon City region by promoting the "Zero Carbon City" measures
promoted by the Ministry of the Environment. Preferential financing will be provided based on funds procured through green bonds, etc.
for companies and organizations introducing renewable energy equipment, energy-saving equipment, electric vehicles (EVs, HVs, etc.)
and green purchasing equipment, etc. in the zero carbon city region. The equivalent of 0.2% of the contract amount will be contributed
from Fuyo General Finance's own funds and donated to incorporated associations, foundations, NPOs, etc. that contribute to the promotionof zero carbon cities.
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https://www.jcr.co.jp/en/(Reference) RE100
Abbreviation of Renewable Energy 100. An international business initiative in which companies with thegoal of procuring 100% of their business operations through renewable energy participate. There are 288
member companies worldwide (as of February 1, 2021). RE100 is organized in partnership with CDPs
(International NPOs that encourage companies to disclose their environmental impacts) by The Climate
Group (International NPOs that aim to realize a low-carbon society and call for climate change
countermeasures).

4. Conclusion
As a result of verifying the matters described in the previous section, JCR confirmed that 100% of the proceeds of theBonds have been allocated for the green projects, which was originally assumed to be used for funding, and that theassets subject to funding have sufficiently realized the effects of environmental improvement that were originallyassumed.
[JCR Green Bond 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

Not qualified

g4

Green 4

Green 4

Green 5

Not qualified

Not qualified

g5

Green 5

Green 5

Not qualified

Not qualified

Not qualified■ Scope of Subject
Issuer: Fuyo General Lease Co., Ltd. (Securities Code: 8424)
Review
Subject

Bonds No. 17(Green bonds)

Issue
AmountIssue Date

Redemption
Date

JPY 10 billion

November 2,
2018

November 2,
2023

Interest Rate

Evaluation

0.210%JCR Green Bond Evaluation : Green1
Greenness Evaluation: g1
Management, Operations and Transparency
Evaluation: m1(Responsible analysts for this evaluation) Rieko Kikuchi, Hiroya Kakiuchi

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Important explanation of the Green Bond Evaluation
1. Assumptions, Significance, and Limitations of JCR Green Bond Evaluation
JCR Green Bond Evaluation, which is granted and provided by Japan Credit Rating Agency (JCR), is a comprehensive expressionof JCR's current opinion on the extent to which the funds procured from the issuance of green bonds, which are subject to evaluation,
are allocated to green projects defined by JCR and the extent to which the management, operation, and transparency of the use ofgreen bonds are ensured. JCR Green Bond Evaluation does not fully indicate the extent to which the funds procured from suchgreen bonds are allocated and the management, operation, and transparency of the use of the funds are ensured.
JCR Green Bond Evaluation evaluates the plan or status of the appropriation of funds at the time of the green bond issuance planor at the time of issuance, and does not guarantee the status of the appropriation of funds in the future. In addition, JCR Green Bond
Evaluation does not prove the environmental effects of green bonds and is not responsible for their environmental effects. JCR
confirms that the effects of the funds procured from the issuance of green bonds on the environment are measured quantitatively
and qualitatively by the borrower or by a third party requested by the borrower, but in principle it does not directly measure theeffects.
2. Methods used in the conduct of this evaluation
The methods used in this evaluation are listed on JCR website (Sustainable Finance & ESG in https://www.jcr.co.jp/en/) as JCR
Green Finance Evaluation Methodology.
3. Relationship with Acts Related to Credit Rating Business
JCR Green Bond Evaluation is determined and provided by JCR as a related business, which is different from the activities related
to the credit rating business.
4. Relationship with Credit Ratings
The evaluation differs from the Credit Rating and does not promise to provide or make available for inspection a predetermined
Credit Rating.
5. Third-party character of JCR
There is no conflict of interest related to capital or human resources relationships between the subject of this evaluation and JCR.
■Disclaimers

The information contained in this document has been obtained by JCR from the Issuer and from accurate and reliable sources. Provided, however, that such information
may be erroneous due to human, mechanical or other reasons. Accordingly, JCR makes no representation or warranty, express or implied, as to the accuracy, results,
accuracy, timeliness, completeness, marketability, or fitness for a particular purpose of such information, and JCR assumes no responsibility for any error, omission, or
result of using such information. In no event shall JCR be liable for any special, indirect, incidental or consequential damages of any kind, including opportunity loss,
monetary loss, which may arise from any use of such information, whether contractual, tort, negligence or other cause of liability, and whether or not such damages areforeseeable or unforeseeable. JCR Green Bond Evaluation does not express any opinion on the various risks (credit risk, price fluctuation risk, market liquidity risk,etc.) associated with the green bond, which is the subject to the evaluation. JCR Green Bond Evaluation is a comprehensive statement of opinion at the present time of
JCR and is not a statement of fact and does not make any recommendations regarding risk judgment or the decision to purchase, sell or hold individual bonds, commercial
paper, etc. JCR Green Bond Evaluations may be changed, suspended, or withdrawn due to changes in information, lack of information, or other reasons. All rights tothis document, including data from the JCR Green Bond Evaluation, are held by JCR. Reproduction, adaptation, modification or alteration of this document, in whole
or in part, including data from the JCR Green Bond Evaluation, without the permission of JCR is prohibited.

■Glossary

JCR Green Bond Evaluation: JCR Green Bond Evaluation evaluates the extent to which the funds procured from the Green bond are allocated to the Green Project as
defined by JCR, and the extent to which the management, operation, and transparency of the Green Loan are ensured. Evaluations are graded on a scale of 5, beginningwith the top, using the Green1, Green2, Green3, Green4, and Green5 symbols.

■Status of registration as an external reviewer of green finance・ Ministry of the Environment's external green bond reviewer registration
・ ICMA (registered as an observer with the International Capital Markets Association)
・Climate Bonds Initiative Approved Verifier・Members of the Working Group on UNEP FI Positive Impact Finance Principles■Status of registration as a credit rating agency etc.
・ Credit Rating Agency: the Commissioner of the Financial Services Agency (Rating) No.1
・ EU Certified Credit Rating Agency
・ NRSRO: JCR has registered with the following four of the five credit rating classes of the Securities and Exchange Commission's NRSRO(Nationally RecognizedStatistical Rating Organization. (1)Financial institutions, broker dealers, (2) insurance companies, (3) general business corporations, and (4) government and local
governments. If the disclosure is subject to Section 17g-7(a) of the Securities and Exchange Commission Rule, such disclosure is attached to the news releases postedon the JCR website (https://www.jcr.co.jp/en/).

■ For further information, contact

Information Service Dept. TEL: 03-3544-7013

FAX: 03-3544-7026

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

Copyright © Japan Credit Rating Agency, Ltd. All rights reserved.

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