SECOND PARTY OPINION
TOKYO CENTURY CORPORATIONSUSTAINABILITY-LINKED FINANCE AND
TRANSITION-LINKED FINANCE FRAMEWORK
Prepared by: DNV Business Assurance Japan K.K.
Location: Kobe, Japan
Date: 7 May 2024
Ref. Nr.: PRJN- 722384-2024-AST-JPN-01

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Contents

Executive Summary

3

I. Introduction

10

II. Scope and Objectives

18

III. Responsibilities of Tokyo Century and DNV

19IV. Basis of DNV’s Opinion

20

V. Work Undertaken

23

VI. Findings and DNV's Opinion

24

Schedule-1 Selection Process of Eligible Fundraisers by Tokyo Century as an Enabler (quoted from the
Framework)30

Schedule-2 Key Performance Indicators (KPIs) and Sustainability Performance Targets (SPTs) as an Enabler
31
Schedule-3 Sustainability-Linked Finance Eligibility Assessment Protocol as an Enabler

32

Revision History
Revision
Number0

Date of Issue
7 May 2024

Main Changes
InitialDisclaimer
Our assessment relies on the premise that the data and information provided by Fundraiser to us as part of our review procedures have been provided in good faith. Because of
the selected nature (sampling) and other inherent limitation of both procedures and systems of internal control, there remains the unavoidable risk that errors or irregularities,
possibly significant, may not have been detected. Limited depth of evidence gathering including inquiry and analytical procedures and limited sampling at lower levels in theorganization were applied as per scope of work. DNV expressly disclaims any liability or co-responsibility for any decision a person or an entity may make based on thisStatement.

Statement of Competence and Independence
DNV applies its own management standards and compliance policies for quality control, in accordance with ISO/IEC 17021:2011 - Conformity Assessment Requirements forbodies providing audit and certification of management systems, and accordingly maintains a comprehensive system of quality control, including documented policies andprocedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We have complied with the DNV Code of
Conduct1 during the assessment and maintain independence where required by relevant ethical requirements. This engagement work was carried out by an independent team ofsustainability assurance professionals. DNV was not involved in the preparation of statements or data included in the Framework except for this Statement. DNV maintains
complete impartiality toward stakeholders interviewed during the assessment process.

1 DNV Code of Conduct is available from DNV website (www.DNV.com)

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Executive SummaryTokyo Century Corporation (hereinafter, “Tokyo Century” or “Enabler” *1) was formed throughthe merger of Century Leasing System, Inc. and Tokyo Leasing Co., Ltd., and with its founding
business in leasing, they are engaged in co-creation with domestic and overseas partnercompanies in five business fields: "Domestic Leasing Business Field," "Automobility Business
Field," "Specialty Business Field," "International Business Field," and "Environmental
Infrastructure Business Field." Tokyo Century is developing a business model that combines“FINANCE x SERVICES x BUSINESS."The Tokyo Century Group has set a target to reduce its greenhouse gas (hereinafter, “GHG”)
emissions to net zero by FY 2040 compared to FY 2021, with an interim target of a 50%
reduction in GHG emissions by FY 2030.
Recognising that tackling environmental issues is one of its social responsibilities, Tokyo Century
is committed to carry out its corporate activities that take environmental conservation into
account in all areas of its business activities in order to realise a sustainable, recycling-oriented
economic society, and as a funder, supports investments and loans that contribute to lowcarbon and decarbonisation by its fundraisers. They believe that it is essential to support thepromotion of low-carbon and decarbonisation in the aircraft and shipping business sectors,
which have particularly high GHG emissions; thus, as an Enabler, they have followedinternational frameworks and have established the Tokyo Century Sustainability-Linked Financeand Transition-Linked Finance Framework (hereinafter, “the Framework”).
The Framework is structured as a comprehensive framework that includes the elements
necessary for Tokyo Century to execute the following financing as an Enabler.
- Sustainability-Linked Finance (Loan and Equity*2)- Transition-Linked Finance (Loan and Equity*2)
As an external reviewer, DNV Business Assurance Japan K.K. (hereinafter, “DNV”) provided aneligibility assessment of the Framework. Specifically, DNV has conducted eligibility assessment
on Tokyo Century’s business plans and structure through applying and referring*2 to theframework (e.g., principles and guidelines) centred around the following to properly assess anddetermine fundraisers’ business activities, which are eligible for Tokyo Century's SustainabilityLinked Loan and Transition-Linked Loan, are adequately contributing to the transition strategy
and to the realisation of low-carbon and decarbonisation.
- Sustainability-Linked Loan Principles (SLLP), LMA et al, 2023
- Sustainability-Linked Loan Guidelines (SLLGL), Ministry of the Environment, 2022
- Climate Transition Finance Handbook (CTFH), International Capital Market Association (ICMA),
2023- Basic Guidelines on Climate Transition Finance (CTFBG), FSA, METI, MOE, 2021
A summary of the results of Tokyo Century's assessment of the fundraisers' eligibility
assessment process against the common elements set out in the above Framework is shown on
the following page.

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*1

Enabler：In this report, the Enabler is defined as the transition finance body (the entity that procures thefunds,
including investments and loans) underlined below, as describes in the relevant questions in the“Climate Transition Finance Handbook” (ICMA) and the “Basic Guidelines on Climate Transition Finance”(Financial Services Agency, Ministry of Economy, Trade and Industry, Ministry of the Environment).
“Financial institutions that finance (transition) projects”“Entities that plan to take initiatives that enable others to implement transition strategies
through their own products and services. In such cases of financial institutions, a financier
should articulate how the underlying projects or activities themselves fit into the fundraiser’s
strategy”.
This report is to evaluate the eligibility of financial institution’s plans and structures as Enablers toevaluate that targeted transition projects and activities contribute to the realization of appropriate
transition strategies of the fundraiser.

*2

Since this equity is different from loan instruments, available principles and requirements are referred for
eligibility assessment with understanding the five requirements of the SLLP (including *SLLGL) and the fourcommon elements of the CTFH and CTFBG

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<Assessment Result of Fundraiser’s SLLP Eligibility Assessment Process as an Enabler>
From the documents and information provided by Tokyo Century, DNV has confirmed that Tokyo
Century, as an Enabler, has an SLLP eligibility assessment process for the Fundraisers that iseligible. SLLP-1 to SLLP-5 below are the findings and DNV's opinion on the five SLLP
requirements (including *SLLGL).

Selection of Eligible Fundraisers (Lessees):
As an Enabler, Tokyo Century defines and selects businesses that meet the criteria in Table1 (Figure-1) as Eligible Fundraisers (Lessees), which are candidates to provide leases. After
understanding the environmental management policy and transition strategy of thefundraisers (Lessees), Tokyo Century will select some of the fundraisers (Lessees) as eligible
fundraisers (Lessees) once Tokyo Century can confirm subjected fundraisers’ suitability for
Sustainability-Linked Finance or Transition-Linked Finance.
In the case of fundraisers (Lessees) have never previously executed Sustainability-Linked
Loans and/or Transition-Linked Loans, a separate third-party assessment of the adequacy of
the KPIs/SPTs and transition strategy is required.
Table-1 Eligible Fundraisers (Lessees)

Eligible Fundraisers (Lessees)
Case 1.

Where a ‘Sustainability-Linked Framework’ or ‘Transition-Linked Framework’
has already been developed, for which an eligible assessment by a thirdparty assessment reviewer has been obtained.

The framework needs to be updated according to its content; However, it is
not necessary if it is within three years of its formulation.

Case 2.



Where there is a track record of executing ‘Sustainability-Linked
Loans/Bonds’ and ‘Transition-Linked Loans/Bonds’ for which a Frameworkhas not yet been developed, but for which a qualified assessment by a thirdparty assessment reviewer has already been obtained.

※ In principle, the eligible fundraisers (lessees) meet the two cases listed in Table-1, but the fundraisers
who can develop a new 'framework' or assess the execution of 'individual loans,' as described in Figure1, may also be eligible.

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Figure-1 Selection process for qualifying fundraisers (Lessees) (Table-1 explained as a block flow diagram)

Enabler SLLP-1. Selection of Key Performance Indicators (KPIs):
Tokyo Century selects the best and most meaningful indicators for fundraising using theframework from the KPIs defined by the fundraiser (lessee).
Enabler SLLP-2. Calibration of Sustainability Performance Targets (SPTs):
Tokyo Century selects the most appropriate indicators for funding through the framework fromamong the SPTs defined by the fundraiser (lessee), and the ambition of the SPTs will be
determined after consultation between Tokyo Century and the fundraiser (lessee).

Enabler SLLP-3. Finance Characteristics:
At least once a year, Tokyo Century determines the achievement of the SPTs determined
under SLLP-1 and SLLP-2. Tokyo Century also applies equity financing, as illustrated in the
diagram below, and will vary the equity and loan terms depending on whether the SPTs havebeen achieved, as follows:<Equity Characteristics>
If the SPTs are achieved, the funder (Lessor), a wholly owned subsidiary of Tokyo Century,
will in principle reduce the fundraiser's (Lessee's) lease payments once a year. In the eventof non-achievement, the funds remaining in the funder's (Lessor) ESG Reserve Account will
be donated to a fund designated by Tokyo Century for environmental protection activities or
distributed to anonymous investors.
<Loan Characteristics>

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If the SPTs are achieved, a reduction in the lease fee of the fundraiser (Lessee) and apreferential interest rate on the funder's (Lessor's) loan apply. If not achieved, the normalinterest rate applies.

Image of Tokyo Century’s Finance Scheme as an Enabler (left: aircraft leasing business, right: ship leasing business)

Enabler SLLP-4. Reporting:Once a year, Tokyo Century will confirm with the fundraisers (Lessee) and submit to theanonymous investors and lenders the results of the achievement of the SPTs determined in
SLLP-1 and SLLP-2 and the characteristics of the Financing. In addition, the status of theexecution of the Financing will be published on the website of Tokyo Century and in someother communication formats.
Enabler SLLP-5. Verification:
Tokyo Century will receive an independent third-party verification report from thefundraisers (Lessee) on the achievement of the SPTs against the set KPIs.

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<Assessment Result of Fundraiser’s SLLP Eligibility Assessment Process as an
Enabler>From the documents and information provided by Tokyo Century, DNV has
confirmed that Tokyo Century, as an Enabler, has a CTF eligibility assessment process for
eligible fundraisers (Lessees) to fund Transition Loans with general corporate purpose.
Enabler CTF-1 to CTF-4 below outline the eligibility assessment process for the fourcommon elements of the CTFH and CTFBG. DNV has confirmed through its assessment ofTokyo Century that the eligibility assessment process (Framework) is consistent with the
CTFH and CTFBG.

Enabler CTF-1. Fundraiser’s (Lessee) Climate Transition Strategy and Governance:
Climate Transition Strategy: Through its Framework, Tokyo Century ensures that thefundraisers' (Lessees’) transition strategies are consistent with the goals of the Paris
Agreement, have a concrete plan with a scientific basis, and that the plan is transparent
and sets credible and feasible targets. In addition, Tokyo Century will consider the main
GHG reduction measures and their contribution to the SDGs in the implementation of thefundraisers’ (Lessees’) transition strategies.
Governance: Tokyo Century checks what kind of organisational or meeting committee bodymanages the fundraisers’ (Lessees’) transition strategies and if such an organisation bodyhas implemented execution process. If the fundraisers (Lessees) intend to update or
already updated their transition strategies, Tokyo Century will check with the fundraisers(Lessees) and explain the changes and their reasons to stakeholders.

Enabler CTF-2. Business Model Environmental Materiality:
Environmental Materiality: In its materiality selection process, Tokyo Century ensuresthat its fundraisers' (Lessees') GHG reduction efforts contribute to the transformation ofcore business activities that are environmentally significant in terms of their businesscharacteristics, given that they have an impact on Tokyo Century's Scope 3.
Climate Change-related Scenarios: Tokyo Century confirms what scenarios thefundraisers’ (Lessees’) transition strategies are based on that have a scientific basis andthat it will consider several future scenarios that may affect the eligible projects that are
candidates for the use of the proceeds.

Enabler CTF-3. Climate Transition Strategy to be ‘Science-Based’ including Targets andPathways:
Science-based Strategies, Targets and Pathways: Tokyo Century confirms that thetargets and pathways quantified as absolute or relative values set by the fundraiser(Lessee) are set by reference to the scientifically based trajectories required to achieve thegoals of the Paris Agreement. It also ensures that the fundraiser's (lessee's) GHG emissions
reduction targets cover GHG protocols or are set by other appropriate indicators, targets,
etc., depending on business characteristics, technology development and reduction progress
timelines.

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Enabler CTF-4. Implementation Transparency:
Investment Plan: Tokyo Century confirms the overall investment plan for the realisation of
the fundraisers’ (Lessees’) transition strategies. If the timeline for realising the strategy islong or if the overall investment plan is difficult to set due to external factors other than thecompany itself, such as common technological innovation, Tokyo Century confirms theshort-term investment plan, including the project in question, to the extent practicable.
Just Transition, Mitigation of Negative Impacts and Avoidance of Lock-In: Tokyo
Century ensures that just transition, avoidance of lock-in and negative impacts areappropriately identified, considered and addressed in the fundraisers’ (Lessees’) transition
strategies and the impact of the introduction of the carbon tax.

Based on its assessment of the Framework and other relevant documents and information
provided by Tokyo Century, DNV has confirmed that the Framework established by Tokyo
Century to promote leases executed through financing with general corporate purpose by
Tokyo Century as an Enabler meets the criteria required by the SLLP, SLLGL, CTFH andCTFBG, and is eligible.

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I. Introductioni.

About Tokyo Century
Tokyo Century was formed through the merger of Century Leasing System, Inc. andTokyo Leasing Co., Ltd., and with its founding business in leasing, they are engaged inco-creation with domestic and overseas partner companies to develop a business modelthat combines ‘FINANCE x SERVICES x BUSINESS." Specifically, Tokyo Century
operates in the following business areas:

Equipment Leasing
Segment: Provide finance and services for all types of properties,
including information and communications equipment,
office equipment, manufacturing facilities, construction
machinery, and commercial equipment.

Automobility
Segment: Provide high-quality services tailored to the purpose ofuse under an extensive service line-up ranging from
corporate and individual auto leasing to car rental.

Specialty Financing
Segment: Provide highly specialised finance and services inshipping, aviation, real estate, structured finance andprincipal investments.

International
Business Segment: Provide highly specialised finance and services that meetthe specific needs of each country by promoting an
alliance strategy with leading companies and financial
institutions in Japan and abroad as business partners.

Environmental
Infrastructure
Segment: In addition to the renewable energy business, thecompany provides various services that contribute to a
decarbonised society, including efficient business
management and profitability improvement services in
the power generation business.

Figure-2 Tokyo Century Group Management Philosophy

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ii.

Tokyo Century's Sustainability Initiatives
As a financial and service company, Tokyo Century, together with all its stakeholders,sees sustainability as the basis for achieving sustainable growth and increasing
corporate value and contributing to the realisation of a recycling-oriented economy andsociety. In its “Medium-Term Management Plan 2027 - TC Transformation andSustainable Growth,” formulated in May 2023, Tokyo Century has set the promotion of
ESG as a basic policy to enhance its corporate value over the medium to long term.
The company is committed to "Contribute to the creation of a sustainable economy andsociety," "Expand human capital investment and contribute to social infrastructuredevelopment for the resolution of social issues" and "Strengthen the effectiveness ofgovernance" to achieve sustainable growth and increase corporate value, thereby
contributing to and taking up the challenge of realising a sustainable economy andsociety.

Figure-3 Contribute to the creation of an environmentally sound, sustainable economy and society through ourbusiness activities

Established in April 2018, the Sustainability Committee is responsible for deliberations
related to sustainability management at Tokyo Century. This committee meets twice a year,
in principle. Important matters deliberated on by the Sustainability Committee are reported
to and discussed by the Management Meeting and the Board of Directors to allow foroversight by the Board of Directors.

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The Sustainability Committee is chaired by the president of the Corporate Planning Unit andpromotes initiatives for addressing materiality items that position sustainability as animportant management issue. In addition, the Sustainability Committee also collaborates
with the Comprehensive Risk Management Committee, which handles climate change risk
from the perspective of risk management. Regarding climate change risk as an operationalrisk in a non-financial risk category, Tokyo Century has a system in place to reportmonitoring results to the Board of Directors twice a year through the Comprehensive Risk
Management Committee as a risk indicator for non-financial information.

Figure-4 Structure for Promoting Sustainability Managementiii. Tokyo Century's Environmental Initiatives
The Tokyo Century Group recognises that addressing environmental issues is one of its
key management tasks and has formulated a basic environmental policy in line with theUnited Nations Sustainable Development Goals. Under this policy, Tokyo Century
contributes to and takes on the challenge of realising a sustainable, recycling-oriented
economy and decarbonised society by taking environmental issues into consideration
and addressing them in all areas of its business activities, including prevention ofenvironmental pollution, reduction of greenhouse gas emissions, mitigation of andadaptation to climate change, and conservation of biodiversity and ecosystems.

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iv. Tokyo Century's Climate Change Initiatives
In line with its management philosophy that is to ‘contribute to the creation of anenvironmentally sound, sustainable economy and society,' the Tokyo Century Group
recognises that addressing climate change is an important growth opportunity and has set'contributing to a decarbonised society' as one of Tokyo Century's materialities. They arepromoting initiatives aimed at both resolving social issues and increasing Tokyo Century's
sustainable growth and corporate value.
The Tokyo Century Group has a carbon neutrality policy and plans to be carbon neutral in FY
2040 compared to 2021 in Scope 1 and 2, with an interim target of a 50% reduction in FY
2030. For Scope 3, as shown in Figure-6, GHG emissions by category have been disclosed
and 90% of the GHG emissions are in category 13*. As well as expanding the scope of
calculation and refining the calculation method, Tokyo Century has taken various measures
to reduce GHG emissions in Scope 1 and 2, including reducing its own direct and indirectenergy-based emissions and decarbonising its biomass co-firing power plants in line with its
Transition Plan. In Scope 3, the company plans to reduce GHG emissions by increasing theratio of fuel-efficient aircraft in its aviation business, strengthening the handling of EV
vehicles in its Automobility business, and introducing renewable energy in its real estatebusiness.
*Category 13: Criteria for calculating GHG emissions from leased assets (downstream).

Figure-5 The Tokyo Century Group’s Carbon-Neutrality Policy

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Figure-6 Scope 3 GHG Emissions by Category (2022)

Reference Table: Tokyo Century Group GHG Emissions by Scope (prepared by DNV based on disclosed data)

GHG Emissions in 2022
(thousand t-CO2)
Scope 1

1,083

Scope 2 (L)＊15

Scope 37,727*) (L): location criteriav.

Tokyo Century’s Commitment to the SDGs
In order to identify materialities and organise their relationship to the SDGs, Tokyo
Century has implemented the following process:Consideration of 'key ESG issues' from the perspective of external stakeholders
Linking the Sustainable
Development Goals (SDGs)
to key ESG assessments
and non-financial disclosure
criteria (e.g., Dow Jones
Sustainability Index,
FTSE4Good Index) todetermine their importanceto stakeholders.

Consideration of 'key ESG
issues' from the company's
perspective

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Linking Tokyo Century's management philosophy and financial information to theSDGs, determining their importance to the company and creating a materiality map.
Management discussion and deliberation
After interviews with relevant departments, discussions in the Sustainability
Committee and the Management Board and Board of Directors, the five materialities
and the common foundations that support them were determined.

Materiality

Priority materiality Initiatives

Contribution toContribute to widespread use of clean energy throughdecarbonized society

climate change response and environmental efforts

Creation of new businesses

Create new businesses by integrating new

driven by technicaltechnologies into financial services and contribute toInnovation

the digital economy

Contribution to social
infrastructure innovation

Sustainable resource use

Enhancement of work
environment, leading tostrengthening of humanresources

Shared platforms

SDGs

Respond to advances in global mobility services andcorporate with local communities to contribute tosocial infrastructure development
Contribute to development of a circular economy
focused on the value of assets

Promote human resource development, diversity, andworkstyle reforms that improve job satisfaction andfoster a sense of personal growth

Utilize diverse partnerships to create new value＊ The relevance to the SDGs was drawn from Green, Social and Sustainability Bonds: A High-Level
Mapping to the Sustainable Development Goals, published by ICMA, which sets out the Green
Bond Principles. It is complementary when executing Sustainability-Linked Loans and TransitionLinked Loans and is not directly associated with them as a financing objective.

vi. About the Sustainability-Linked Finance and Transition-Linked Finance Framework
Tokyo Century has established the Tokyo Century Sustainability-Linked Finance andTransition-Linked Finance Framework (hereinafter, “the Framework”) based on aninternational framework in order to promote finance with general corporate purpose as
an Enabler to contribute to the environment by supporting the implementation ofenvironmental strategies by lessees.
The Framework is structured as a comprehensive document containing the elements
required for Tokyo Century to execute with general corporate purpose as an Enabler.

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The framework specifically referred to and applied by this Framework is described in the'Standards/guideline to be applied or referred to' in section II below.

Enabler Name: Tokyo Century Corporation
Framework Name: Tokyo Century Sustainability-Linked Finance and Transition-Linked Finance Framework
Name of External Review Organisation: DNV Business Assurance Japan K.K.
Date of Report: 7 May 2024

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vii. Tokyo Century's Financing Scheme as an Enabler
Tokyo Century will promote finance for aircraft and ship leasing projects. Specificfinancing schemes are shown in Figure-7 and Figure-8. Financing under the Framework
will be provided as a low-carbon and decarbonising financing entity of the fundraiser(Lessee) with KPIs/SPTs in accordance with the SLLP and SLLGL. If funding is provided
as Transition-Linked Finance, the fundraiser’s (Lessee's) transition strategies will also
be confirmed as CTFH and CTFGB compliant.

Figure-7 Scheme diagram when the fundraiser (Lessee) is an airline

Figure-8 Scheme diagram when the fundraiser (lessee) is a shipping company

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II. Scope and Objectives
DNV has been commissioned by Tokyo Century to provide an eligibility assessment on the
Framework. Our objective has been to implement an assessment on the adequacy of theeligibility assessment process for fundraisers (Lessees) by Tokyo Century as an Enabler andwhether it is aligned with the SLLP, SLLGL and/or CTFH, CTFBG, and to provide a second
party opinion on the eligibility of the Framework.
DNV, as an independent external reviewer, has identified no real or perceived conflict ofinterest associated with the delivery of this second party opinion for Tokyo Century.
In this report, no assurance is provided regarding the financial performance of individual
Sustainability-Linked Loans and Transition-Linked Loans, the value of any investments, or the
long-term environmental benefits of the transaction.
(1) Structure of finance at the time of finance execution☒

Stepping up the structure☒

Changes in reimbursement structures*Any of the above or others, set individually based on the internal processes of the fundraiser (lessee) at
the time of financing execution.

(2) Scope of review*
The review assessed the following elements and confirmed their alignment with the main thrust of the five
key elements of the SLLP:☒

Evaluate all the following elements(all elements reviewed)☐

Only some elements are rated (partial review)☒

Selection of KPIs☒

Finance Characteristics☒

Calibration of SPTs☒

Reporting☒

Verification*The scope of review is to be applied as a part of the evaluation of the transition finance with general
corporate purpose*The four disclosure elements of CTFH/CTFBG are also included in the scope of the review.

(3) Role(s) of review providers (General Corporate Purpose)☒

Second Party Opinion☐

Certification☐

Verification☐

Rating*The scope of the review is applied as the evaluation part for the Transition Finance with general
corporate purpose.
*The four disclosure elements of CTFH/CTFBG are also included in the scope of the review.

(4) Standards/guidelines to be applied

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No.

Standards/Guidelines

Scheme Owner

1.

Sustainability-Linked Loan Principles(SLLP) *1

Loan Market Association (LMA) and others,
2023

2.

Sustainability-Linked Loan Guidelines
Ministry of the Environment, 2022
(SLLGL)* 1

3.

Climate Transition FinanceHandbook (CTFH)*2

4.
*1

International Capital Market Association(ICMA), 2023

Application
Level*3
Apply

Apply
Apply

Basic Guidelines on Climate
Apply
FSA, METI, MOE, 2021
Transition Finance (CTFBG)*2
This includes compliance with the five core elements that must be met if the loan is to be executed as atransition loan with general corporate purpose, meeting the four elements of a transition.

*2

Climate transition: The concept of climate transition focuses principally on the credibility of an issuer’s(fundraiser’s (Lessee’s)) climate change-related commitments and practices. (Quoted from CTFH andCTFBG)*3

Apply: Assessment that Tokyo Century qualifies or has a suitability assessment process to determine
eligibility for all elements of each principle and guideline required for executing finance with general
corporate purpose as an Enabler.

III. Responsibilities of Tokyo Century and DNVTokyo Century has provided the information and data used by DNV during the delivery ofthis review. DNV’s second party opinion represents an independent opinion and is intended
to inform Tokyo Century and other interested stakeholders in the finance as to whether theestablished criteria have been met, based on the information provided to us. In our work,
we have relied on the information and the facts presented to us by Tokyo Century. DNV is
not responsible for any aspect of the nominated assets or organisations referred to in thisopinion and cannot be held liable if estimates, findings, opinions, or conclusions areincorrect. Thus, DNV shall not be held liable if any of the information or data provided by
Tokyo Century’s management and used as a basis for this assessment were not correct orcomplete.

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IV. Basis of DNV’s Opinion
To provide as much flexibility for the Enabler, Tokyo Century as possible, we have adapted
our assessment methodologies, which incorporates the requirements of the SLLP, SLLGL,CTFH and CTFBG, to create a Tokyo Century Finance with general corporate purpose.
Eligibility Assessment Protocol (hereinafter, “Protocol”). Please refer to Schedules-3 to 4.
The Protocol is applicable to finance under the SLLP, SLLGL, CTFH and CTFBG, which arecarried out by Tokyo Century as Enabler.
DNV, as an independent external reviewer, provides second party opinion according to theProtocol.
Our Protocol includes a set of suitable criteria that can be used to underpin DNV’s opinion.
The overarching Sustainability-Linked Finance and Climate Transition Finance principles
behind the criteria are as follows:“product incentivises the fundraiser (lessee) to achieve material (as climate transition),
ambitious, pre-determined, regularly monitored and externally verified ESG (on climatetransitions) through KPIs and SPTs”“provide an investment opportunity with transparent sustainability credentials for the
Climate Transition Finance”
As per our Protocol, the criteria against which the finance with general corporate purpose
has been reviewed are grouped into four common elements (disclosure elements)
respectively (1) and (2) below. DNV will also review whether Tokyo Century has an
appropriate suitability assessment process in place for elements (1) and (2) when assessing
a fundraiser's (Lessee's) approach to finance with general corporate purpose as an Enabler.

(1) Five Elements of SLLP and SLLGL *1
Principle One: Selection of Key Performance Indicators (KPIs)
The Fundraiser (Lessee) of Sustainability-Linked Finance or Transition-Linked Financeshould clearly communicate to investors or lenders the overarching sustainability
objectives set out in the sustainability strategy and how these objectives align withthe proposed SPTs. KPIs should be reliable, material to the Fundraiser's (Lessee's)
core sustainability and business strategy, address relevant ESG challenges of theindustry sector and be under management control.
Principle Two: Calibration of Sustainability Performance Targets (SPTs)
The SPTs should be ambitious, meaningful and realistic. The target setting should bedone in good faith and based on a sustainability improvement in relation to apredetermined performance target benchmark.

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Principle Three: Finance Characteristics
The finance should include the financial and/or structural impact depending onwhether the selected KPIs reach (or not) the predefined SPTs. The financedocumentation needs to require the definitions of the KPI(s) and SPT(s) and thepotential variation of structural characteristics of sustainability-linked finance ortransition-linked finance. Any fallback mechanisms in case the SPTs cannot becalculated or observed in a satisfactory manner, should be explained.
Principle Four: Reporting
The fundraiser (Lessee) should publish and keep readily available and easily
accessible up to date information on the performance of the selected KPI(s), as well
as a verification assurance report (see Principle Five) outlining the performanceagainst the SPTs and the related impact and timing of such impact on the finance’s
financial and/or structural characteristics, with such information to be provided tothose institutions participating in the finance or to investors participating in thefinance at least once per annum.
Principle Five: Verification
The Fundraiser (Lessee) should have its performance against its SPTs independently
verified by a qualified external reviewer with relevant expertise, at least once perannum. The verification of the performance against the SPTs should be made publicly
available.
*1: The Sustainability-Linked Finance DNV Assessment Protocol consists of five requirements set out based on
the SLLP (2023) and encompasses the SLLGL.

(2) Transition Loan Eligibility Assessment of Fundraisers (Lessees) for theTransition Loan with General Corporate Purpose as an Enabler(Four common elements of CTFH and CTFBG)
Principle One: Fundraiser’s (Lessee’s) climate transition strategy andgovernance
The financing purpose should be for enabling a Fundraiser’s (Lesse’s) climate change
strategy.
Principle Two:Business model environmental materiality

The planned climate transition trajectory should be relevant to the environmentallymaterial parts of the Fundraiser’s (Lessee’s) business model.
Principle Three: Climate Transition Strategy to be ‘Science-Based’ including
Targets and Pathways
Fundraiser’s (Lessee’s) climate transition strategy should reference science-basedtargets and transition pathways.

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Principle Four: Implementation Transparency
Market communication in connection with the offer of a financing instrument which
has the aim of funding the Fundraiser’s (Lessee’s) climate transition strategy should
also provide transparency of the underlying investment program.

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V. Work Undertaken
Our work constituted a comprehensive review of the available information, based on theunderstanding that this information was provided to us by Tokyo Century in good faith. We
have not performed an audit or other tests to check the veracity of the information provided
to us. The work undertaken to form our opinion includes:i. Pre-Financing Assessment•

Creation of an Enabler-specific Protocol, adapted to the purpose of the Tokyo
Century’s Finance with general corporate purpose, as described above and in
Schedules-3 to 4 to this assessment;•

Assessment of documentary evidence provided by Tokyo Century on the Finance withgeneral corporate purpose and supplemented assessment by a comprehensive
desktop research. These checks refer to current assessment best practice andstandards methodologies;•

Discussions with Tokyo Century, and review of relevant documentation;•

Documentation of findings against each element of the criteria;•

Where necessary, documentation of an eligibility assessment against the assessment
results of the Finance with general corporate purpose implemented by the Enabler,
Tokyo Century.

ii. Post-Financing Assessment (*not included in this report)•

Interview with Enabler and review of relevant document control;•

Field research and inspection (if necessary);•

Document creation of post-financing observation results.

Page 23 of 38

VI. Findings and DNV's Opinion
DNV’s findings and opinions are described as follows:
DNV reviewed whether Tokyo Century, as an Enabler, has an appropriate eligibility
assessment process for the following elements when assessing the Fundraiser's (Lessee’s)
initiatives to finance with general corporate purpose.
In Tokyo Century’s assessment process, a company is considered as an eligible fundraiser(Lessee) if it meets any of the following criteria:①

A framework for finance with general corporate purpose has been developed, certified
by a third-party independent evaluation body.
Although the framework has not yet been developed, there is a track record of
executing the finance with general corporate purpose that has been certified by a thirdparty independent evaluation body.
At present, there is no track record for both ① and ②, but it is possible to develop a
new 'framework' or to be evaluated the execution of the finance with general corporate
purpose.

②③

Enabler SLLP-1 to SLLP-5 and Enabler CTF-1 to CTF-4 below outline the eligibility
assessment process for the five common elements of SLLP and SLLGL and the fourcommon elements of CTFH and CTFBG.
Through the assessment to Tokyo Century, DNV has confirmed that the eligibility
assessment process is aligned with the SLLP, SLLGL, CTFH and CTFBG.

(1) Findings and DNV’s opinions on the five SLLP requirements
Process for Selecting Eligible Fundraisers (Lessees):-

The process for selecting qualified fundraisers (Lessees) for Tokyo Century is
shown in Figure-1.

-

Tokyo Century only provides funding as an Enabler to the Fundraisers (Lessees)that meet the criteria in Table-1. Furthermore, Tokyo Century plans to confirm
and understand the environmental management policy and transition strategy of
the Fundraiser (Lessee) and select the Lessee that can be confirmed as eligible for
Sustainability-Linked Finance or Transition-Linked Finance as a Fundraiser(Lessee).
In the case of the Fundraisers (Lessees) that have not previously executed
Sustainability-Linked Loans and Transition-Linked Loans, a separate third-party
assessment of the adequacy of the KPIs/SPTs and transition strategy will be
required-Page 24 of 38

Table-1 (Reiterated) Eligible Fundraisers (Lessees)

Eligible Fundraisers (Lessees)
Case 1.

Where a ‘Sustainability-Linked Framework’ or ‘Transition-Linked
Framework’ has already been developed, for which an eligible assessment
by a third-party assessment reviewer has been obtained.

The framework needs to be updated according to its content; However, it is
not necessary if it is within three years of its formulation.

Case 2.



Where there is a track record of executing ‘Sustainability-Linked
Loans/Bonds’ and ‘Transition-Linked Loans/Bonds’ for which a Frameworkhas not yet been developed, but for which a qualified assessment by athird-party assessment reviewer has already been obtained.

※ In principle, the eligible fundraisers (lessees) meet the two cases listed in Table-1, but thefundraisers who can develop a new 'framework' or assess the execution of 'individual loans,'
as described in Figure-1, may also be eligible.

Figure-1(Reiterated) Selection process for qualifying fundraisers (Lessees) (Table-1 explained as a
block flow diagram)

Enabler SLLP-1. Selection of Key Performance Indicators (KPIs):-

From the KPIs defined by the Qualified Fundraiser (Lessee), Tokyo Century selects
the indicators that are most suitable and meaningful in raising funds using thisfinancing.

Page 25 of 38

Enabler SLLP-2. Calibration of Sustainability Performance Targets (SPTs):-

From among the SPTs defined by the Qualified Fundraiser (Lessee), Tokyo
Century will select the most appropriate indicators for raising funds using thisfinancing. The ambition of the SPTs will be determined after discussion between
Tokyo Century and the Qualified Fundraiser (Lessee).

Enabler SLLP-3. Finance Characteristics:-

At least once a year, Tokyo Century determines the achievement of the SPTs
determined under SLLP-1 and SLLP-2. Tokyo Century also applies equity
financing, as shown in Figures 7 and 8, and varies the equity and loan terms
depending on whether the SPTs have been achieved. Refer to the following:<Equity Characteristics>
If the SPTs are achieved, the Funder (Lessor), a wholly owned subsidiary ofTokyo Century, will in principle reduce the fundraiser’s (Lessor's) lease payments
once a year. In the event of non-achievement, the funds remaining in theFundraiser’s (Lessor’s) ESG Reserve Account will be donated to a funddesignated by Tokyo Century for environmental protection activities or
distributed to anonymous investors.

<Loan Characteristics>
If the SPTs are achieved, a reduction in the lease fee of the Fundraiser (Lessee)
and a preferential interest rate on the Funder’s (Lessor's) loan apply. If notachieved, the normal interest rate will be applied.

Enabler SLLP-4. Reporting:-Tokyo Century will confirm the results of the achievement of the SPTs and thecharacteristics of the Financing determined in SLLP-1 and SLLP-2 with theFundraiser (Lessee) once a year and submit them to the anonymous investor
and the lender. In addition, the status of the execution of the Financing will be
published on the website of Tokyo Century and through other communication
channels.

Enabler SLLP-5. Verification:-

Tokyo Century will receive an independent third-party verification report fromthe Fundraiser (Lessee) on the achievement of the SPTs against the set KPIs.

Page 26 of 38

(2) Adequacy of assessment process as an Enabler and DNV’s opinion against fourcommon elements (disclosure elements) of CTFH and CTFBG
Enabler CTF-1. Fundraiser’s (Lessee’s) Climate Transition Strategy andGovernance:-

Climate Transition Strategy: Through its framework, Tokyo Century ensures that
the Fundraisers’ (Lessees’) transition strategies are consistent with the goals of theParis Agreement, have a concrete science-based plan, and that the plan istransparent and sets credible and feasible targets. In the implementation of theFundraisers' (Lessees’) transition strategies, Tokyo Century will also consider themain means of GHG reduction and environmental and social impacts other thanclimate change, as well as the contribution to the SDGs.

-

Governance: Tokyo Century will ensure that the Fundraiser’s transition strategy
has processes in place to manage and implement its transition strategy and by
what organisational body/meeting committee body. If the fundraiser’s (Lessee's)
originally planned transition strategy is updated, whether due to external orinternal factors, Tokyo Century confirms with the Fundraiser (Lessee) and explains
the changes and their reasons to stakeholders.

Enabler CTF-2. Business Model Environmental Materiality:-

Environmental Materiality: Tokyo Century will ensure that the Fundraisers’(lessees’) efforts to reduce GHG emissions, which will have an impact on Tokyo
Century's Scope 3, contribute to the materiality selection process and to thetransformation of core business activities that are environmentally significant interms of business characteristics, both now and in the future. The Fundraisers'(lessees’) materiality selection process and the current and future contribution to
the transformation of core business activities that are environmentally importantdue to the nature of the business.

-

Consideration of Scenarios: Tokyo Century confirms what scenarios theFundraiser's (Lessee’s) transition strategy is based on that have a scientific basis
and that it will consider several future scenarios that may affect the eligible
projects that are candidates for the use of the funds.

Enabler CTF-3. Climate Transition Strategy to be ‘Science-Based’ including Targets
and Pathways:-

Science-based strategies, targets and pathways: Tokyo Century will ensurethat the quantified targets and pathways set by the Fundraiser (Lessee), either as
absolute or relative values, are set with reference to the science-based trajectories
required to realise the goals of the Paris Agreement. It also ensures that theFundraiser's (Lessee’s) GHG emissions reduction targets cover the GHG Protocol or
are set by other appropriate indicators, targets, etc., depending on businesscharacteristics, technology development and timelines for reduction progress.

Page 27 of 38

Enabler CTF-4. Implementation Transparency:-

Investment Plan: Tokyo Century checks the overall investment plan for therealisation of the Fundraiser's (Lessee's) transition strategy. If the timeline forrealising the strategy is long or if the overall investment plan is difficult to set due
to the factors other than the company itself, such as the external environment
surrounding the transition or the state of technological innovation, the short-term
investment plan, including the project in question, is confirmed to the extent
practicable.

-

Just Transition, Mitigation of Negative Impacts and Avoidance of Lock-in:
Tokyo Century will ensure that just transition, avoidance of lock-in and negative
impacts are appropriately identified, considered and addressed in the Fundraiser's(Lessee's) transition strategy, as well as the impact of the introduction of the
carbon tax.

(3)

External Review

In order to ensure credibility and transparency that the finance with general corporate
purpose to be implemented based on the results of the framework decision process(eligibility assessment results) is an appropriate linked loan, Tokyo Century confirms
through an external review that Tokyo Century's eligibility assessment has been properly
completed (a written statement of conformity will be obtained from the external
evaluation body)

Page 28 of 38

Assessment Conclusion
On the basis of the Framework and other relevant documentation and information provided
by Tokyo Century, and the work undertaken, it is DNV’s opinion that the Framework
established by Tokyo Century as an Enabler to promote lease executed through the financewith general corporate purpose meets the criteria required in the SLLP, SLLGL, CTFH andCTFBG, and is eligible.
Based on the above, we express our opinion that the finance with general corporate
purpose to be implemented by Tokyo Century as Enabler is consistent with the following
definitions and objectives of SLLP, SLLGL, CTFH and CTFBG.
“product incentivises the fundraiser (lessee) to achieve material (as climate transition),
ambitious, pre-determined, regularly monitored and externally verified ESG (on climatetransitions) through KPIs and SPTs”“provide an investment opportunity with transparent sustainability credentials for the
Climate Transition Finance”
DNV Business Assurance Japan K.K.
7 May 2024

Jun Chokai

Naoki Maeda

Technical Reviewer

Managing Director/SCPA Senior Vice President

DNV Business Assurance Japan K.K.

DNV Business Assurance Japan K.K.

Masato Kanedome

Akira Tsukasaki

Project Leader

Assessor

DNV Business Assurance Japan K.K.

DNV Business Assurance Japan K.K.

About DNV
Driven by our purpose of safeguarding life, property and the environment, DNV enables organisations to advance the safety andsustainability of their business. Combining leading technical and operational expertise, risk methodology and in-depth industry knowledge,
we empower our customers We continuously invest in research and collaborative innovation to provide customers and society with
operational and technological foresight.
With our origins stretching back to 1864, our reach today is global. operating in more than 100 countries, our 16,000 professionals are
dedicated to helping customers make the world safer, smarter and greener.
Disclaimer
Responsibilities of the Management of the Fundraiser and the Second-Party Opinion Providers, DNV : The management of the Fundraiser
has provided the Our statement represents an independent opinion and is intended to inform the Fundraiser management and otherinterested stakeholders in the Bond as to whether the established criteria are met. Our statement represents an independent opinion and isintended to inform the Fundraiser management and other interested stakeholders in the Bond as to whether the established criteria havebeen met, based on the information In our work we have relied on the information and the facts presented to us by the Fundraiser. Thus,
DNV shall be liable for any aspect of the nominated assets referred to in this opinion and cannot be held liable if estimates, findings,
opinions, or conclusions are incorrect. Thus, DNV shall be held liable if any of the information or data provided by the Fundraiser's
management and used as a basis for this assessment were not correct or complete

Page 29 of 38

Schedule-1 Selection Process of Eligible Fundraisers by Tokyo Century as an Enabler (quoted
from the Framework)
Table-1 and Figure-1 show the process for selecting Fundraisers (Lessees) in the Framework established for Tokyo Century to execute financing withgeneral corporate purpose as an Enabler.
DNV has confirmed that the Tokyo Century’s Fundraiser Selection Process is eligible and meets the criteria required by the relevant frameworks, SLLP,SLLGL, CTFH and CTFBG.
Table-1 (Reiterated) Eligible Fundraisers (Lessees)

Eligible Fundraisers (Lessees)
Case 1.

Where a ‘Sustainability-Linked Framework’ or‘Transition-Linked Framework’ has already beendeveloped, for which an eligible assessment by athird-party assessment reviewer has beenobtained.

The framework needs to be updated according to
its content; However, it is not necessary if it iswithin three years of its formulation.

Case 2.



Where there is a track record of executing‘Sustainability-Linked Loans/Bonds’ and ‘TransitionLinked Loans/Bonds’ for which a Framework has
not yet been developed, but for which a qualified
assessment by a third-party assessment reviewer
has already been obtained.

Page 30 of 38

Figure-1(Reiterated) Selection process for qualifying fundraisers(Lessees) (Table-1 explained as a block flow diagram)Schedule-2 Key Performance Indicators (KPIs) and Sustainability Performance Targets(SPTs) as an Enabler
KPIs Key performance indicators
Select the most appropriate and meaningful indicators for fundraising through this finance from the KPIs defined by theFundraisers (Lessees) who qualify in the process described in Schedule-1.

SPTs Sustainability Performance Targets
Select the most appropriate indicators for fundraising through this finance from the SPTs defined by the Fundraisers(Lessees) who qualify in the process described in Schedule-1.

Page 31 of 38

Schedule-3 Sustainability-Linked Finance Eligibility Assessment Protocol as an Enabler
The following checklists (SLLP-1 to SLLP-5) are DNV evaluation procedures created for the Framework eligibility assessment of Tokyo Century’s finance forthe general corporate purpose as an Enabler, based on the requirements of the SLLP and SLLGL. The Confirmed documents in the work undertaken
includes Enabler internal documents and other documents, which are provided by Tokyo Century to DNV as evidence for the eligibility decision.
In the case of Transition Loans for the general corporate purpose, the term should be read in the context of Transitions as appropriate.
*In the following requirements, "borrower" and "lender" may be read as "Fundraiser (Lessee)" and "Funder (Lessor)", respectively, as appropriate.

SLLP-1 Selection of KPIs (Key Performance Indicators)
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1a

KPI – material
to coresustainability
and businessstrategy

The fundraiser’s sustainability performance isConfirmed
Documents:- Framework

DNV has confirmed that Tokyo Century intends to confirm
the requirements set out on the left with the Fundraiser(Lessee) and select the indicators that are most suitable
and meaningful for the fundraising with this finance whenselecting from among the KPIs set out by the Eligible
Fundraiser (Lessee), as described in the Framework and
Schedule-2.

measured using sustainability KPIs that can be
external or internal. The KPIs should be material to
the fundraiser’s core sustainability and businessstrategy and address relevant environmental, social
and/or governance challenges of the industry sector
and be under management’s control. The KPI should
be of high strategic significance to the fundraiser’s
current and/ or future operations;
It is recommended that fundraiser communicate
clearly to investors the rationale and processaccording to which the KPI(s) have been selected
and how the KPI(s) fit into their sustainability
strategy.

Page 32 of 38

Interviews with
relevant
stakeholders

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1b

KPI Measurability

KPIs should be measurable or quantifiable on aconsistent methodological basis; externallyverifiable; and able to be benchmarked, i.e. as muchas possible using an external reference or definitions
to facilitate the assessment of the SPT’s level ofambition.

Confirmed
Documents:- Framework

DNV has confirmed that Tokyo Century intends to confirm
the requirements set out on the left with the Fundraiser(Lessee) and select the indicators that are most suitable
and meaningful for the fundraising with this finance whenselecting from among the KPIs set out by the Eligible
Fundraiser (Lessee), as described in the Framework and
Schedule-2.

Interviews with
relevant
stakeholders

Fundraiser are encouraged, when possible, to selectKPI(s) that they have already included in theirprevious annual reports, sustainability reports orother non-financial reporting disclosures to allow
investors to evaluate historical performance of the
KPIs selected. In situations where the KPIs have notbeen previously disclosed, fundraiser should, to theextent possible, provide historical externally verified
KPI values covering at least the previous 3 years.
1c

KPI – Clear
definition

A clear definition of the KPI(s) should be provided
and include the applicable scope or perimeter as wellas the calculation methodology.

Confirmed
Documents:- Framework
Interviews with
relevant
stakeholders

Page 33 of 38

DNV has confirmed that Tokyo Century intends toconfirm the requirements set out on the left with theFundraiser (Lessee) and select the indicators that are
most suitable and meaningful for the fundraising withthis finance when selecting from among the KPIs set out
by the Eligible Fundraiser (Lessee), as described in the
Framework and Schedule-2.

SLLP-2. Calibration of SPTs (Sustainability Performance Targets)
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

2aTarget Setting- Meaningful

The SPTs should be ambitious, realistic andmeaningful to the fundraiser’s business and beconsistent with the fundraisers’ overall strategic
sustainability/ESG strategy.

Confirmed
Documents:- Framework

DNV has confirmed that Tokyo Century intends toconfirm the requirements set out on the left with theFundraiser (Lessee) and select the indicators that are
most suitable and meaningful for the fundraising with thisfinance when selecting from among the KPIs set out by
the Eligible Fundraiser (Lessee), as described in the
Framework and Schedule-2.

Interviews with
relevant
stakeholders
2b2cTarget Setting- Meaningful

Target Setting–
benchmarks

SPTs should represent a material improvement in therespective KPIs and be beyond a "Business as Usual"
trajectory; where possible be compared to abenchmark or an external reference and be
determined on a predefined timeline, set before (orconcurrently with) the issuance of the loan.

Confirmed
Documents:- Framework

The target setting exercise should be based on a

Confirmed
Documents:
Framework

combination of benchmarking approaches:
1.

The fundraiser’s own performance over time
for which a minimum of 3 years, where
feasible, of measurement track record on theselected KPI(s) is recommended and whenpossible forward-looking guidance on the KPI

2.

The SPTs relative positioning versus thefundraiser’s peers where comparable oravailable, or versus industry or sector
standards

Page 34 of 38

Interviews with
relevant
stakeholders

Interviews with
relevant
stakeholders

As stated in the Framework and Schedule-2, when Tokyo
Century selects from among the SPTs specified by theeligible fundraiser (lessee), DNV confirms with thefundraiser (lessee) the requirements listed on the left.
After discussions, it was confirmed that the mostappropriate indicators for financing using this financing
will be selected.
DNV has confirmed that Tokyo Century intends toconfirm the requirements set out on the left with theFundraiser (Lessee) and select the indicators that are
most suitable and meaningful for the fundraising with thisfinance when selecting from among the KPIs set out by
the Eligible Fundraiser (Lessee), as described in the
Framework and Schedule-2.

Ref.

Criteria

Requirements
3.

Work Undertaken

DNV Findings

Confirmed
Documents:- Framework

DNV has confirmed that Tokyo Century intends toconfirm the requirements set out on the left with theFundraiser (Lessee) and select the indicators that are
most suitable and meaningful for the fundraising with thisfinance when selecting from among the KPIs set out by
the Eligible Fundraiser (Lessee), as described in the
Framework and Schedule-2.

Systematic reference to science-based
scenarios, or absolute levels (e.g. carbon
budgets) or official
country/regional/international targets or torecognised Best-Available-Technologies orother proxies.

2d

Target setting– disclosures

Disclosures on target setting should make clear
reference to:
1. The timelines of target achievement, thetrigger event(s), and the frequency of SPTs.
2. Where relevant, the verified baseline orreference point selected for improvement of
KPIs as well as the rationale for that baseline
or reference point to be used.
3. Where relevant, in what situations
recalculations or pro-forma adjustments ofbaselines will take place.
4. Where possible and taking into accountcompetition and confidentiality.

Page 35 of 38

Interviews with
relevant
stakeholders

SLLP-3. Loan Characteristics
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

3a

Loan
Characteristi
cs – SPT
Financial/str
ucturalimpactThe SLL will need to include a financial and/or
structural impact involving trigger event(s) based onwhether the KPI(s) reach the predefined SPT(s).

Confirmed
Documents:- Framework- Assessment
presentationmaterials

DNV has confirmed that the inclusion of trigger events in
the Framework complies with the requirements describedin the SLLP.

Interviews with
relevant
stakeholders

3b

Loan
Characteristi
cs – Fallback
mechanism

Any fallback mechanisms in case the SPTs cannot becalculated or observed in a satisfactory manner should
be explained.
Fundraisers may also consider including, where
needed, language in the bond or loan documentation
to take into consideration potential exceptional
events.

Page 36 of 38

Confirmed
Documents:- Framework- Assessment
presentationmaterials
Interviews with
relevant
stakeholders

Based on the description of certain loan agreements
executed under the Framework, DNV has identified
trigger events with specific SPT observation periods andperformance requirements and the extent of their impact
on the financial characteristics of the loan as the loaninterest rate or other financial incentives will change.
Specifically, the loan will be subject to a preferential
interest rate when the SPT is achieved and a normalinterest rate when the SPT is not achieved, depending on
the achievement of the SPT in a single year during theplanning period of the loan.
DNV will consider including language in the lease andloan agreements, as set out in the Framework and
Schedule-2, confirming with the Fundraisers (Lessees)
the requirements set out on the left when Tokyo Century
selects from among the SPTs set out by the eligible
fundraisers (Lessees). It was confirmed that this isplanned.

SLLP-4. Reporting
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

4aReportingFundraisers of SLLs should publish, and keep readily

Confirmed
Documents:- Framework
Interviews with
relevant
stakeholders

DNV has confirmed that Tokyo Century intends toconfirm the requirements set out on the left with theFundraiser (Lessee) and select the indicators that are
most suitable and meaningful for the fundraising with thisfinance when selecting from among the KPIs set out by
the Eligible Fundraiser (Lessee), as described in the
Framework and Schedule-2.

available and easily accessible:
Up-to-date information on the performance of theselected KPI(s), including baselines where relevant.
A verification assurance report relative to the SPT
outlining the performance against the SPTs and therelated impact, and timing of such impact, on the
loan’s financial and/or structural characteristics
Any information enabling investors to monitor thelevel of ambition of the SPTs.
This reporting should be published regularly, at least
annually, and in any case for any date/period relevant
for assessing the SPT performance leading to apotential adjustment of the SLB’s financial and/or
structural characteristics.

SLLP-5. Verification
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

5aExternal
Verification

Fundraisers should have its performance against each
SPT for each KPI independently verified by a qualified
external reviewer with relevant expertise, at least
once a year and for each SPT trigger event.

Confirmed
Documents:- Framework

As stated in the Framework and Schedule-2, regarding
the achievement of the SPTs against the KPIs selected by
Tokyo Century from among the KPIs set by the Qualified
Fundraisers (Lessee), DNV has confirmed that Tokyo

Page 37 of 38

Ref.

Criteria

Requirements

Page 38 of 38

Work Undertaken

DNV FindingsInterviews with
relevant
stakeholders

Century intends to receive a verification report from theFundraisers (Lessees) after they receive an independent
verification for KPI-related data by a qualified external
evaluation body with relevant expertise in SPTs trigger
events.