SECOND PARTY OPINION
NYK LINE
GREEN/TRANSITION FINANCE FRAMEWORK

Prepared by: DNV Business Assurance Japan K.K.
Location: Kobe, Japan
Date: 25th January 2024
Ref. Nr.: PRJN-258246-2021-AST-JPN-Rev.1

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Executive Summary
Nippon Yusen Kabushiki Kaisha, also known as NYK Line (hereinafter, “NYK”) is one of theworld's leading shipping companies, founded in 1885. Currently, the NYK Group runs the liner &logistics business, bulk shipping business, and other businesses.
The NYK Group established the "NYK Group ESG Story" in February 2021 to promote ESG
management that enables both maximization of earnings and social/environmental
sustainability concurrently. The “NYK Group ESG Story” sets out important issues (materiality),priority targets (action plans) including the environment, and has also promoted initiatives
related to contributions to the SDGs. In promoting these initiatives, the NYK Group has
positioned the climate transition strategy that the NYK Group intends to achieve GHG emission
reduction targets of International Maritime Organization (IMO), which is an internationalorganization in the shipping industry, and the Ministry of Land, Infrastructure, Transport andTourism's (Maritime roadmap), etc., and NYK Group's GHG emission reduction targets, as well.
In November 2023, under the theme "Co-Creation for the Future", the “NYK Group ESG Story2023” was formulated and published, setting out growth strategies and non-financial targets
based on the NYK Group's materialities (material issues) of “safety,” “environment,” and“human resources,” as well as “governance” as a basis. At the same time, the “NYK Group
Decarbonization Story,” which sets out the Group's decarbonisation strategy and GHG emission
reduction targets for 2050, was also published.
The NYK Group intends to raise green/transition finance for activities to realize decarbonisation
strategy and achieve GHG emission reduction targets as an opportunity to disseminate the NYK
Group's environmental efforts to its stakeholders.
The NYK Group has revised the “NYK Green/Transition Bond Framework” formulated in 2021
and has newly established “NYK Green/Transition Finance Framework” (hereinafter, the“Framework”) in order to carry out this green/transition finance in a manner that conforms to
the internationally recognized framework (handbook, principles, guidelines, etc.).
DNV Business Assurance Japan K.K. (hereinafter, “DNV”), as an external reviewer, evaluatedthe eligibility of the Framework.
Specifically, DNV provided the eligibility evaluation for the Framework against the following
handbook, principle and guidelines which are widely recognized:--

Climate Transition Finance Handbook(International Capital Market Association, 2023, hereinafter CTFH)
Basic Guidelines on Climate Transition Finance(Financial Services Agency, Ministry of Economy, Trade and Industry, Ministry of theEnvironment, 2021, hereinafter CTFBG)
Green Bond Principles(International Capital Market Association, 2021, hereinafter GBP)
Green Bond Guidelines(Ministry of the Environment, 2022, hereinafter GBGLs)
Green Loan Principles(Loan Market Association (LMA) and others, 2023, hereinafter GLP)
Green Loan Guidelines(Ministry of the Environment, 2022, hereinafter GLGLs)

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The executive summary of the eligibility evaluation results for the four core common elements
defined by CTFH, CTFBG, GBP/GBGLs, and GLP/GLGLs as follows.

(1) Four common elements of CTFH/CTFBG (disclosure elements)
CTF-1. Fundraiser’s Climate Transition Strategy and Governance:
The transition strategy of the Fundraiser NYK Group is based on the transition pathway
including GHG emission reduction targets, which is consistent with the environmental goals
set by IMO, the Ministry of Land, Infrastructure, Transport and Tourism, etc. In addition, as
governance and disclosure related to execution of the finance, an internal system and an
information disclosure process based on TCFD* has been established. Furthermore, thecontribution to the SDGs, which will be described later, is also taken into consideration.
These are disclosed within the framework and satisfy the disclosure elements of CTF-1.
* TCFD: Task Force on Climate-related Financial Information Disclosure

CTF-2. Business model environmental materiality:
The planned transition strategies and transition pathway are associated with the NYK
Group's priority targets and materiality. These are disclosed within the Framework andsatisfy the disclosure elements of CTF-2.
CTF-3. Climate transition strategy to be science-based including targets and pathways:
NYK's transition strategy is defined by science-based targets and pathways. Specifically,
NYK applies GHG emission reduction targets set by IMO and Ministry of Land,
Infrastructure, Transport and Tourism as described in CTF-1, in addition to the long-termtargets, the short- and medium-term targets, the process to achieve the targets, andenvironmental benefits of the target project are the criteria for evaluation. It is qualified
and quantified along with the baseline for the evaluation. These are disclosed through the
Framework or second-party opinion and satisfy the disclosure elements of CTF-3.
CTF-4. Implementation transparency:
NYK has established an internal management system and process for determining basic
investment plans for executing transition strategies. Specifically, a ship decarbonization
investment plan has been developed for 2030, taking into account CTF-1 to CTF-3. This
investment plan identifies the assets/technologies and amounts to be invested in. These
are disclosed through the Framework etc., or this Second Party Opinion and satisfy thedisclosure elements of CTF-4.

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(2) Four common elements of GBP/GBGLs and GLP/GLGLs
GBP/GLP-1. Use of Proceeds:
NYK defines the eligibility criteria for the use of proceeds as green/transition projects thatmeet the requirements of transition strategies and related frameworks. Specifically, it
refers to project, to directly and indirectly contribute to and support the fuel conversion andtechnology innovation of ships and vessels, and projects related to the energy efficiency ofequipment related to the ships and vessels operation and renewable energy. The proceeds
will be used for capital investment, R&D, business development/operation, working capital,
or multiple of these projects as new financing and refinancing of new or existing
expenditures. These projects have been evaluated that they will have clear environmental
benefits on the transition strategy, and are expected to contribute to the SDGs. These
processes are in compliance with GBP/GLP-1.
GBP/GLP-2. Process for Project Evaluation and Selection:
NYK ensures that the green/transition projects meet the GBP/GLP-1 eligibility criteria anddo not conflict with the pre-defined exclusion criteria in the Framework. Specifically, theESG Management Group, Decarbonization Group and the Finance Group evaluate and selectprojects based on a comprehensive analysis of finance, technology, and market
environment, and the final decision is made by the executive officer in charge of finance.
These processes are in compliance with GBP/GLP-2.
GBP/GLP-3. Management of Proceeds:
The Finance Group manages the proceeds for each project using the internal system andforms. The proceeds will be allocated within two years from issuance. In addition, theunallocated amounts of the proceeds are managed in cash or cash equivalents until the
allocation. If green/transition finance is executed under this Framework in the future, it will
be disclosed in statutory documents etc. prior to execution or clearly stated in relevant
contractual documents.
GBP/GLP-4. Reporting:
NYK plans to report on the status of proceeds allocation and environmental benefits(impacts) through NYK Group website until the full amount of the proceeds is allocated.
This includes the allocated amount, unallocated amount (new/refinancing), allocatedproject outline, GHG emission reduction amount or ratio (%) and other qualified indicatorsand quantified value of environmental benefits for each project category. For ongoingprojects, progress and expected environmental benefits will be reported. Any majorchanges in transition strategies, pathways, allocation plans or performance will also bereported in a timely manner or in the reporting. In the case of loans, however, the method
and scope of reporting on the allocation status of proceeds and environmental benefits(impacts) will be determined at the request of the lender.

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Table-1 NYK Green/transition Bond Nominated Projects
Project
Classification*1
01

Category*2*3

Offshore Wind
Power *1-

Renewable Energy

Fuel Conversion
Technology
Innovation
Clean
Transportation
Fuel Conversion
Technology
Innovation
Clean
Transportation
Clean
Transportation
Energy efficiency

02

Green Terminal *1

03

Ammonia-fueled
vessel *1-

04

Hydrogen-fueled
vessel *1

-

05
06

LNG-fueled vessel
LNG-bunkering
vessel07

LPG-fueled vessel

08

Operation
efficiency &optimization-

Project Overview & Target Activities- Self-elevating platform(SEP)- Crew transport vessel (CTV)- New construction andexpansion of green
terminals- Ammonia-fueled ammonia
gas carrier and tugboat- Introduction of ships
equipped with high-powerhydrogen fuel cells- LNG-fueled vessel- LNG-bunkering vessel- LPG-fueled vessel- Technology developmentthat contributes tooperational efficiency andoptimization

Contribution
to SDGs

Targetactivities:-Capital
investment-R&D funds-Businessdevelopment-Operation
funds-Working
capital, etc* 1 Project 01 to 04 have been evaluated as green project.
* 2 Projects that have been confirmed to be eligible as green projects can be incorporated into green bond, and in addition,
they are admitted by CTFBG to be incorporated as part of transition bond.
* 3 Projects that are currently categorized as transition projects can be regarded as green projects due to the application andapplication of future technological innovations (e.g., application of green fuel, achievement of performance that meets CO 2
emission standards as a green project, etc.)

DNV has confirmed that the Framework meets the criteria required by the relevant handbook,principles and guidelines and is eligible by evaluation based on related documents andinformation provided by NYK including the Framework.

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Contents
Executive Summary

2

Ⅰ Introduction

7

Ⅱ Scope and Objectives

15

Ⅲ Responsibilities of NYK and DNV

16

Ⅳ Basis of DNV’s Opinion

17

Ⅴ Work Undertaken

19

Ⅵ Findings and DNV’s Opinion

20

Ⅶ Assessment Conclusion

31

Schedule-1 NYK Green/Transition Finance Nominated Project33

Schedule-2 Climate Transition Finance Eligibility Assessment Protocol

34

Schedule-3 Green Finance Eligibility Assessment Protocol

40

Revision history
RevisionNo.

Date of Issue

0

1 July 2021

1

25 January 2024

Main Changes
InitialChanges in application criteria
Climate Transition Finance Handbook 2023 (updated)
Green Bond Guidelines 2022 (updated)
Green Loan Principles 2023, Green Loan Guidelines 2022 (newly
added)
Revised in line with the NYK Group ESG Story 2023 and the revised NYK
Green/Transition Finance Framework

Disclaimer
Our assessment relies on the premise that the data and information provided by Issuer 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 ofevidence gathering including inquiry and analytical procedures and limited sampling at lower levels in the organization were applied as per scopeof work. DNV expressly disclaims any liability or co-responsibility for any decision a person or an entity may make based on this Statement.

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 for bodies providing audit and certification of management systems, and accordingly maintains a comprehensive
system of quality control, including documented policies and procedures 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 maintainindependence where required by relevant ethical requirements. This engagement work was carried out by an independent team of sustainability
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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Ⅰ Introduction
i. About the Fundraiser
Nippon Yusen Kabushikikaisha, also known as NYK Line (hereinafter, “NYK”) is one of theworld's leading shipping companies, founded in 1885. Currently, the NYK Group runs theliner & logistics business, bulk shipping business, and other businesses.
ii. NYK’s Environmental Initiatives
The NYK Group established the "NYK Group ESG Story" in February 2021 and has promoted
ESG management that enables both maximization of earnings and social/environmental
sustainability concurrently. In November 2023, under the theme "Co-Creation for the
Future", the “NYK Group ESG Story 2023” was formulated and published, setting out growthstrategies and non-financial targets based on the NYK Group's materialities (material issues)of “safety,” “environment,” and “human resources,” as well as “governance” as a basis. At
the same time, the “NYK Group Decarbonization Story,” which sets out the Group's
decarbonisation strategy and GHG emission reduction targets for 2050, was also published.
NYK publishes its ESG activities including the roadmap toward decarbonization and its
achievements on its website.
The “NYK Group ESG Story” sets out important issues (materiality), priority targets (actionplans) including the environment, and has also promoted initiatives related to contributions
to the SDGs.
As the engine for implementing ESG management, NYK also established an ESG Strategy
Headquarters in April 2023, comprising the ESG Management Group and the Decarbonization
Group, which discusses ESG management plans and strategies at the ESG Strategy
Committee and then makes management decisions at the Management Meeting and Boardof Directors.

Figure-1 The NYK Group’s ESG Management Implementation Framework

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iii. About the Framework
To progress environmental initiatives, the NYK Group implements green/transition finance as
fundraising which promote activities aimed at achieving the environmental goals of theinternational Maritime Organization (IMO), an international organization in the shipping
industry, and the Ministry of Land, Infrastructure, Transport and Tourism, etc.*1, and the
NYK Group positions these kinds of fundraising as an opportunity to inform NYK Groupinitiative to stakeholders. The NYK Group has established the “NYK Green/Transition Finance
Framework” (hereinafter, the “Framework”) to implement it in a manner that meets theinternationally established framework.
This Framework focuses on promoting the green/transition strategy and achieving theenvironmental targets set out in the “NYK Group ESG Story 2023” and the “NYK Group
Decarbonization Story” published in November 2023, and is a revised version of the “NYKGreen/Transition Bond Framework” formulated in 2021. This Framework will be available for
the NYK Group's future green/transition finance implementation. The framework that the
NYK Group specifically referred to when formulating this Framework is described in Section
II (3) below.
*1: ”Initial IMO GHG Strategy” and “Roadmap to Zero Emission from International Shipping” prepared by
JSTRA, MLIT (Ministry of Land, Infrastructure, Transport and Tourism), and other maritime organizations.

iv. Fundraiser’s Contribution to the SDGs
Figure-2 shows the overall image of NYK Group’s efforts toward SDGs.
Table-2 shows the major SDGs related to this green/transition finance.
The NYK Group is working to resolve the issues of the 10 out of 17 targets in order tocontribute to the achievement of SDGs through its business activities. This green/transition
finance is directly and indirectly contributing to energy, industry and technology innovation,and climate change.

Figure-2 NYK Group’s initiatives for SDGs

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Table-2 Relationship between ESG approaches and SDGs
(SDGs that correspond to priority themes and activities related to green/transition finance)

Main Themes

Main activities

Green Business・ Offshore wind power and tidal power
・ LNG fuel supply business

Innovation

・ The concept ship NYK SUPER ECO SHIP
2050 (NYK SES 2050)

Safe operation andreduction ofEnvironmental burden
Conversion to nextgeneration fuels

SDGs

・ Employment of IoT, big data, AI, and otherdigital technologies
・ Adherence to environmental regulations
and reductions in CO2 emissions
・ Low carbonization of marine fuels
・ Decarbonization

v. Fundraiser’s Transition Strategy for Decarbonization(1) Strategies by sector (industry) at the international/national/regional level
Figure-3 shows the outlines of IMO’s GHG emission reduction pathway. IMO focuses on
measures for emission reduction, by design and technology (reduction of fuel consumption),
improvement of operation efficiency technological innovation and fuel conversion(introduction of low-carbon/zero-carbon fuel) and various technologies, and agreed on
indicators corresponding to short- and medium-term targets and long-term targets, andworked towards achieving them.
In March 2020, The Ministry of Land, Infrastructure, Transport and Tourism, as well as theshipping, shipbuilidng, and marine maritime industires, research institutes, and publi
institutions have collaborated to create a “Roadmap to Zero Emission from Internaional
Shipping” (Sponsored by Japan Ship Technology Research Association). This roadmap shows
Japan’s efforts (international treaty formmulation, technological development) in a mannerconsistent with the goals of IMO.

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Figure-3 IMO’s GHG emission reduction pathway(*1)
IMO: International Maritime Organization
GHG: Green House Gas

Figure-4 Roadmap to Zero Emission from International Shipping(*1)(*1) Figure-3 and Figure-4 are both based on the IMO GHG Strategy (2018).

IMO initiated a review to revise the strategy in 2021 and adopted the “2023 IMO GHG
Strategy” in July 2023, which includes new and strengthened GHG reduction targets,
including “zero GHG emissions by around 2050.”
Figure-5 shows the GHG emission reduction targets agreed in the “2023 IMO GHG Strategy.”

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Figure-5 GHG emission reduction targets from ships in the 2023 IMO GHG Strategy(Reference: https://www.imo.org/en/MediaCentre/HotTopics/Pages/Cutting-GHG-emissions.aspx)(2) Strategies of NYK
The NYK Group positions the activities to contribute to the above-mentioned IMO and the
MLIT GHG emission reduction targets, and the activities aimed at achieving the NYK Group’s
GHG emission reduction targets as its transition strategies. The NYK Group has set GHG
emission reduction targets, including fuel conversion, as part of its core business low anddecarbonization strategy and has been working to achieve these targets. NYK has
established and published the “NYK Group Decarbonization Story” and the “NYK Group ESG
Story 2023” as transition strategies that are consistent with the GHG reduction strategies inthe “2023 IMO GHG Strategy” and aim to achieve results beyond these GHG emission
reduction targets. Specifically, the short- and medium-term targets are a 45% reduction in
NYK Group Scope 1+2 emissions (total) by fiscal 2030 (compared to fiscal 2021) and a longterm target of NYK Group Scope 1+2+3 net zero by fiscal 2050. While IMO has a target of a
40% reduction in CO2 emissions per shipment volume in 2030, the NYK Group has a GHG
emission reduction target of a 45% reduction in total emissions, which is more ambitious
than IMO's GHG emission reduction target.

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Figure-6 The NYK Group’s GHG emission reduction target

The NYK Group received SBT certification for its GHG emission reduction targets and has
been working toward achieving it. The new GHG reduction targets set this time are also
being prepared for SBT certification based on the 1.5°C scenario by the end of fiscal 2023.
The NYK Group plans to take two approaches to achieve the 2050 net zero target: “GHG
emission reduction” and “GHG removal” (See Figure-7). For “GHG emission reduction,” theNYK Group aims to reduce GHG emissions from its existing fleet by improving day-to-day
operations and energy efficiency through 2030. From 2030, the NYK Group will build aresilient fleet portfolio by steadily introducing alternatively fueled vessels that also mitigate
environmental impacts other than GHG emissions (See Figure-8 and Figure-9).

Figure-7 Road to Net Zero Emissions

Figure-8 Two tactics to reduce GHG emissions

Since 2030, the NYK Group also plans to address GHG removal through investments in forest
funds etc., to cover residual GHG emissions that are difficult to shift to zero emissions (SeeFigure-10).

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Figure-9 Accelerating GHG emissions
reduction through the use of alternative fuels

Figure-10 Scenario for achieving net zero

Furthermore, the NYK Group plans to take on the challenge of the renewable energy fieldwith the aim of creating a new core business for the NYK Group, leveraging expertise andtechnological competence accumulated over many years and its global network, and tocontribute to the global construction of a hydrogen and ammonia supply chain that willcontribute to reducing GHG emissions. With this in mind, the NYK Group will participate in
R&D on the transportation of hydrogen and ammonia and move forward with thedevelopment of value chains for new energy (See Figure-11).

Figure-11 Business development timeline in the energy field (as of August 2023)

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In its “Medium-Term Management Plan Sail Green, Drive Transformations 2026,” publishedin March 2023, the NYK Group announced its intention to actively conduct upfront
investment toward a decarbonized society by 2030 (See Figure-12).

Figure-12 Vessel decarbonization investment towards 2030

The overall picture and details of these initiatives are disclosed in the “NYK Group ESG Story2023” etc.

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Ⅱ Scope and Objectives
NYK has commissioned DNV to conduct an eligibility assessment of the “NYK Green/Transition
Finance Framework.” The objective of DNV’s assessment is to implement an assessment toconfirm that NYK meets the identified criteria of the standards CTFH, CTFBG, GBP/GBGLs, and
GLP/GLGLs described below and applicable CBS related technical standards and other relevant
criteria or guidelines (refer to the following), and to provide the Fundraiser with independent
second-party opinion on the eligibility of the Framework.
DNV, as an independent external reviewer, has identified no real or perceived conflict of interest
associated with the delivery of this Second Party Opinion for NYK.
In this paper, no assurance is provided regarding the financial performance of thegreen/transition finance, the value of any investments, or the long-term environmental benefitsof the transaction.
(1) Scope of review
The review assessed the following elements and confirmed their alignment with the gist of GBP/GLP:☒

Use of Proceeds☒

Process for Project Evaluation and Selection☒

Management of Proceeds☒

Reporting(2) Role(s) of review provider☒

Second-party opinion☐

Certification☐

Verification☐

Rating☐Other (please specify):

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(3) Standards/guidelines to be applied
No.

Standards/guidelines

Scheme owner

Applied level*1*2

1.

Climate Transition Finance Handbook(CTFH)

International Capital Market
Association (ICMA), 2023

Apply

2.

Basic Guidelines on Climate Transition
Finance (CTFBG)

3.

Green Bond Principles (GBP2021)

4.

Green Bond Guidelines (GBGLs)

Ministry of the Environment, 2022

Apply

5.

Green Loan Principles (GLP)LMA and others, 2023

Apply

6.

Green Loan Guidelines (GLGLs)

Ministry of the Environment, 2022

Apply

Climate Bonds Initiative, 2019

Refer
(applicable technicalstandards)

International Capital Market
Association (ICMA), 2020

Refer

International Capital Market
Association (ICMA), 2021

Refer

7.

8.
9.

Financial Services Agency, Ministryof Economy, Trade and Industry,
Ministry of the Environment, 2021
International Capital Market
Association (ICMA), 2021

Climate Bonds Standard version 3.0(CBSv3.0)(Sector criteria)
Green and Social Bonds: A High-Level
Mapping to the Sustainable
Development Goals
Handbook Harmonized Framework for
Impact Reporting

Apply
Apply

*1: Apply: Eligibility for all four core common elements to each handbook, principle and guideline was evaluated .
*2: Refer: all or part of the related content was considered based on the green project and execution plan

Ⅲ Responsibilities of NYK and DNV
NYK has provided the information and data used by DNV during the delivery of this review.
DNV’s statement represents an independent opinion and is intended to inform NYK and otherinterested stakeholders in the finance as to whether the established criteria have been met,
based on the information provided to us. In our work we have relied on the information and thefacts presented to us by NYK. DNV is not responsible for any aspect of the nominated projects
and assets referred to in this opinion and cannot be held liable if estimates, findings, opinions, orconclusions are incorrect. Thus, DNV shall not be held liable if any of the information or data
provided by NYK’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 Fundraiser, NYK as possible, DNV has adapted its
green/transition finance assessment methodologies, which incorporates the requirements of the
CTFH, CTFBG, GBP/GBGLs, and GLP/GLGLs, to create a NYK Green/Transition Finance Eligibility
Assessment Protocol (hereinafter, the “Protocol”). See Schedule-2 and Schedule-3. The Protocol
is applicable to CTFH, CTFBG, GBP/GBGLs, and GLP/GLGLs based green/transition finance.
Our Protocol includes a set of suitable criteria that can be used to underpin DNV’s opinion. The
overarching principle and guidelines behind the criteria are that a green/transition finance should“provide an investment opportunity with transparent sustainability credentials” and “enable
capital-raising and investment for new and existing projects with environmental benefits.”
As per our Protocol, the criteria against which the green/transition finance has been reviewed
are grouped into four common elements, represented by CTFH, CTFBG, GBP/GBGLs, and
GLP/GLGLs:(1) Four elements of CTFH and CTFB (disclosure elements)•

Element One: Fundraiser’s climate transition strategy and governance
The financing purpose should be for enabling the Fundraiser’s climate transition strategy.

•

Element Two: Business model environmental materiality
The planned climate transition trajectory should be relevant to the environmentally-material partsof the Fundraiser’s business model.

•

Element Three: Climate transition strategy and targets to be science-based
The Fundraiser’s climate transition strategy should reference science-based targets and transition
pathways.

•

Element Four: Implementation transparency
Market communication in connection with the offer of a financing instrument which has the aimof funding the Fundraiser’s climate transition strategy should also provide transparency of theunderlying investment program.

(2) Four elements of GBP/GBGLs and GLP/GLGLs•

Principle One: Use of Proceeds
The Use of Proceeds criteria are guided by the requirement that a fundraiser of a green financemust use the proceeds to eligible projects. The eligible projects should produce clear
environmental benefits.

•

Principle Two: Process for Project Evaluation and Selection
The Project Evaluation and Selection criteria are guided by the requirements that a fundraiser ofa green finance should outline the process it follows when determining eligibility of an investmentusing green finance proceeds, and outline any impact objectives it will consider.

•

Principle Three: Management of Proceeds
The Management of Proceeds criteria are guided by the requirements that a green finance shouldbe tracked within the fundraising organization, that separate portfolios should be created whennecessary and that a declaration of how unallocated proceeds will be handled should be made.

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•Principle Four: Reporting
The Reporting criteria are guided by the recommendation that at least Sustainability Reporting to
the bond investors or lenders should be made of the allocation status of proceeds and thatquantitative and/or qualitative performance indicators should be used, where feasible.

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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 the Fundraiser in good faith. We havenot performed an audit or other tests to check the veracity of the information provided to us.
The work undertaken to form our opinion included:

Green/Transition Finance Framework assessment•

Creation of the fundraiser-specific Protocol, adapted to the purpose of thegreen/transition finance, as described above and in Schedule-2 and Schedule-3 to thisAssessment;•

Assessment of documentary evidence provided by the Fundraiser on the finance andsupplemented assessment by a high-level desktop research. These checks refer to current
assessment best practices and standards methodology;•

Discussions with the Fundraiser and review of relevant documentation;•

Documentation of findings against each element of the criteria.

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Ⅵ Findings and DNV’s Opinion
DNV’s findings and opinion are as below.
As (1), CTF-1 to CTF-4 presents findings and DNV's opinion on the four common disclosure
elements of CTFH and CTFBG to be applied in green/transition finance. See Schedule-2 fordetails.
As (2), the findings and DNV's opinion on four common elements of GBPs/GBGLs and GLP/GLGLs
are presented. See Schedule-3 for details.

(1) Findings and DNV’s opinion on four common elements of CTFH/CTFBG(disclosure elements)
CTF-1 Fundraiser’s climate transition strategy and governance
DNV has confirmed that the Framework is consistent with the NYK Group's transition strategy
and that the methods for achieving the transition target are consistent with efforts below the
1.5°C goal agreed in the Paris Agreement.
Specifically, the NYK Group's transition strategy is ambitious and goes beyond theenvironmental targets set by IMO, the Ministry of Land, Infrastructure and Transport, etc.,
which are consistent with the Paris Agreement. Short- and Medium-term targets has also set
in absolute values regarding GHG emission reduction, and specific tactics toward achieving
the targets has been identified. The NYK Group's transition strategy also includes specificinvestment targets and amounts, and the internal carbon price (ICP) is used to calculate thecost of GHG emission reductions. Furthermore, as governance and disclosure related to
execution, an internal system has been established and an information disclosure process
based on TCFD* has been established (see Figure-1).
* TCFD: Task Force on Climate-related Financial Information Disclosure

In addition, the contribution to the SDGs, which will be described later, is also taken into
consideration.
These are disclosed in the Framework etc. and satisfy the disclosure elements of CTF-1
specified in CTFH2023 (see Figure-2 and Table-2).

CTF-2 Business model environmental materiality
DNV has confirmed that the business activities planning climate transition are the corebusinesses of the NYK Group, providing environmental and social achievements andcontributions, and support the driving force of the commercial business.
NYK Group's planned transition strategies and transition pathways are associated with the
NYK Group's priority targets and materiality, and contribute to significant environmental
impacts from a qualitative and quantitative perspective. These are based on scenario analysis
using TCFD.

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These are disclosed within the Framework etc. and satisfy the disclosure elements of CTF-2
specified in CTFH2023.

CTF-3 Climate transition strategy and targets to be science-based
DNV has confirmed that NYK Group's transition strategy was quantified and built based on
identified specific technology and investment plan for sustainable GHG emission reductions.
The transition pathway shown to reduce GHG emission is to aim to achieve the 1.5°C goal.
Specifically, NYK's transition strategy is defined by evidence-based targets and pathways.
Specifically, in addition to the long-term targets consistent with GHG emission reduction
targets of IMO, the Ministry of Land, Infrastructure and Transport, etc., as described in CTF1, the short- and medium-term targets, the process of achieving the targets, andenvironmental benefits of the target project are indexed and quantified together with thebaseline that serves as the evaluation criteria. The short- and medium-term targets (a 45%
reduction of total GHG emissions in Scope 1+2 in fiscal 2030 compared to fiscal 2021), which
are set to achieve the long-term targets (Scope 1+2+3 net zero in fiscal 2050), are set inabsolute values. The GHG emission results included in the disclosure covers the maincategories of Scope 3 in addition to Scope 1+2 and is reliable, having been verified by athird-party verification body.
These are disclosed through the Framework etc. or second-party opinion and satisfy thedisclosure elements of CTF-3 specified in CTFH2023.

CTF-4 Implementation transparency
DNV has confirmed that the investment and deployment plans related to the NYK Group'stransition strategy include consensus building on investments made so far and future
investments and expenditures. The investment plan included in the transition strategy has
identified the areas and technologies to be invested in, including alternative fuels, and theadoption of alternative fuels will result in the phasing out/abolition of vessel navigation that
does not comply with the transition strategy. The investment plan has also been developed
using a calculated internal carbon price (ICP), which is reliable.
DNV also reviewed the Framework and the “NYK Group ESG Story” and confirmed that theexecution was transparent and that the NYK Group explained and agreed on the relevance ofthe execution. Specifically, NYK has established an internal management system and process
for determining basic investment plans for executing transition strategies, and it was
confirmed that the investment plans are executed through this internal management systemand process. Specifically, a ship decarbonization investment plan has been developed for2030, taking into account CTF-1 to CTF-3. This investment plan identifies theassets/technologies and amounts to be invested in.
These are disclosed through the Framework etc. or second-party opinion and satisfy thedisclosure elements of CTF-4 specified in CTFH2023.

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(2) Findings and DNV’s opinion on four common elements of GBP/GBGLs and
GLP/GLGLs
GBP/GLP-1 Use of Proceeds
NYK defines the criteria applied to eligible projects (green/transition project) which meettransition strategy and relevant handbook, principle and guidelines, etc.
Specifically, it refers to projects to directly and indirectly execute and support the fuelconversion and technological innovation of ships, and projects related to energy saving ofequipment related to ship operation and renewable energy.
DNV has confirmed that NYK will allocate the net proceeds from the green/transition finance,
excluding expenses, as new investment and refinancing for capital investment, operating
expenses, and R&D related expenses for green/transition eligible projects that meet theinvestment plan for executing the NYK Group’s transition strategy.
These are typical business transformation and qualified project categories such as CTFH,
CTFBG, GBP/GBGLs, and GLP/GLGLs. These projects have been evaluated as having clear
environmental benefits on the transition strategy, and are expected to contribute to the
SDGs. These processes are in compliance with GBP/GLP-1.

“Renewable energy business” *1“Fuel Conversion” *2“Energy Saving Business” *1“Technology Innovation” *2“Clean Transportation” *1“Development and provision of
products and services in new fields” *2*1 Typical green eligible project classifications illustrated by GBP/GBGLs, GLP/GLGLs, etc. Projects thatare currently confirmed eligibility as green projects can be incorporated into green finance and arealso permissible in the CTFBG to be incorporated as part of transition finance.
*2 A typical transition project that meets the transition strategy of the fundraiser in CTFBG and is
exemplified as a business transformation that contributes to the realization of the Paris Agreement.
Projects that are currently classified as transition-eligible projects may become green projects due tothe application of future technological innovations (e.g., application of green fuel, achievement of
performance that meets GHG emission criteria as a green project, etc.) New sector products andservice development and supply are relevant to the projects listed in Table-3 entirely.

Nominated projects included in the Green/Transition Finance Framework are classified into
the eight green/transition projects shown in 01 to 08 in Table-3 below, and the proceeds will
be used for capital investment, R&D funds, business development funds, business operating
funds, working capital, etc.
Next page and Schedule-2 show the overview of the green/transition projects.

22Page 22 of 45

Table-3 NYK Green/transition finance nominated projects
Project

Category

Project Overview & Target Activities

Offshore Wind

01

Power

*1

- Self-elevating platform (SEP)
EnergyGreen Terminal *1

02

Ammonia-fueled

03

vessel*1

vessel05*1

LNG-fueled vessel
LNG-bunkering

06- New construction and expansion ofgreen terminals-

Fuel Conversion-

Technology- Ammonia-fueled ammonia gas
carrier and tugboat

Innovation

Hydrogen-fueled04- Crew transport vessel (CTV)- Renewable

vessel07

LPG-fueled vessel

08

Operation efficiency& optimization- Introduction of ships equipped with

- Cleanhigh-power hydrogen fuel cells

Transportation-

Fuel Conversion-

Technology- LNG-fueled vessel- LNG-bunkering vessel

Innovation- Clean-Transportation- LPG-fueled vessel

Clean- Technology development that

Transportation

Target Activities:- Capital
investment- R&D funds- Businessdevelopment- Operation
funds- Workingcapital, etc.

contributes to operational efficiency- Energy Efficiency

and optimization* 1 Project 01 to 04 have been evaluated as green project.

Use of proceeds categories as per GBP:☒

Renewable energy☒

Energy efficiency☐

Pollution prevention and control☐☐

Terrestrial and aquatic biodiversity
conservation
Sustainable water resources andwastewater management
Eco-efficient products, production
technologies and processes☒

Sustainable management of living natural
resources
Clean transportation☐

Climate change adaptation

☐
☐
☒
☒

☐

Green buildings with regional, national orinternationally recognized standards andcertifications
Other (please specify): A project based on the Fundraiser's transition strategy (transition project)
It is undecided at the time of issuance, but is expected to be line with the GBP/GLP classificationor other eligible areas not listed in the GBP/GLP at present: A project based on the Fundraiser'stransition strategy (transition project)

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Table-4 Green/transition finance representative project example (1/3)
No.

Project
Category

Green/transition finance nominated projects (Example)

Self-elevating platform (SEP)(Assets and projects that are essential
for installing offshore wind power
generation equipment. Used as
dedicated equipment）

Offshore wind01

(Dedicatedsupport ship)
Crew transfer vessel (CTV)(Assets and projects that are essential
for installing offshore wind power
generation equipment. Used as
dedicated equipment）

02

New establishment and expansion ofgreen terminals(Wind power generation, solar panel
installation, LED introduction, etc.)

Green Terminal

Example of installation of wind power
generation and solar panel to theterminal(These are typical project examples, and does not show the direct application of the images and figures to beposted to the project.)

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Table-4 Green/transition finance representative project example (2/3)
No.

03

Project
Category

Ammonia-

Green/transition finance nominated projects (Example)

AFAGC* Appearance image

fueled vessel

Ammonia-fueled vessel
Example: Ammonia-fueledammonia gas carrier (R&D) andtugboat (research and design ofship hulls and fuel supply
system, verification of operating
methods, etc. Conducted
through joint research with othercompanies)* AFAGC: Ammonia-fueledammonia gas carrier

Ammonia-fueled tugboat Appearance image
Hydrogen-fueled vessel
Example: Demonstration projectfor practical use of a ship
equipped with high-powerhydrogen fuel cells

04

Outline of the demonstration
project
1. Implementation of high-power
FC for ships and development ofoperation technology
2. Development of onboardhydrogen fuel supply system /equipment, development ofenergy management system(EMS) combining FC and storage
battery
3. Development of hydrogen fuelsupply system
4. Ship application, design anddevelopment

Hydrogenfueled vessel(These are typical project examples, and does not show the direct application of the images and figures to beposted to the project.)

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Table-4 Green/transition finance representative project example (3/3)
No.

05

Project
Category

Green/transition finance nominated projects (Example)<Vessel Particulars>
Gross tonnage: 73,500 tonnes
Fuel: LNG
Length overall: about 199.95 m
Breadth: about. 38.00 m
Total car capacity: 7,000 units

LNG-fueled vessel

LNG-fueled car carrier (image)06

LNG-bunkering
vessel
LNG-bunkering vessel (Ship-to-Ship method)<Environmental impact>
Compared to conventional
vessels of the same size, it isdesigned to significantly reduce
CO2.
Example: Ship-to-Ship(A method in which an LNG fuelsupply vessel is attached(sideways) to an LNG-fueled
vessel moored at a quay / pieror an anchored LNG-fueled
vessel to supply LNG fuel)(image)07<Outline of Vessel>
Gross tonnage: 50,000 tonnes
Fuel: LPG
Length overall: about 230.00 m
Breadth: about 37.20 m
Tank capacity: 84,000 m3

LPG-fueled vessel

VLGC: Very Large Gas Carrier<Environmental impact>
Compared to conventional
vessels of the same size, it isdesigned to significantly reduce
CO2.

NYK SUPER ECO SHIP 2050

Operation efficiency &optimization
Contribution to GHG emission
reduction by improving ships(hardware) and operations(software). Technicalcollaboration with NYK Group,
shipbuilding companies, marine
equipment manufacturers, shipclass associations, and various
other partners based on theconcept ship NYK SUPER ECOSHIP 2050.

LPG-fueled VLGC (image)Operation08

efficiency &optimization

Operation efficiency & optimization (image)(These are typical project examples, and does not show the direct application of the images and figures to beposted to the project.)

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GBP/GLP-2 Process for Project Evaluation and Selection
NYK confirms that the green/transition project meets the GBP/GLP-1 eligible criteria anddoes not conflict with the pre-defined exclusion criteria in the Framework. Specifically, theESG Management Group, the Decarbonization Group, and the Finance Group evaluate andselect projects based on a comprehensive analysis of finance, technology, and market
environment, and the final decision is made by the executive officer in charge of finance.
Evaluation and selection:☒

Conforms to the Fundraiser’s achievement☒

Documented process to determine that projectsof environmental contribution goals☒

fit within defined categories

The project is eligible for use of proceeds☒

Documented process to identify and manage

by green finance and transparency ispotential ESG risks associated with the project

ensured.
☒The project is evaluated and selected based☐

Other (please specify):

on the published standard summary.

Information on Responsibilities and Accountability:☒

Evaluation/selection criteria subject to external☒

In-house assessment

advice or verification☐

Other (please specify):

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GBP/GLP-3 Management of Proceeds
The proceeds will be credited to the NYK Group's account, and then the Finance Group will
manage the allocation for each project using the following internal system and internal
control process.
-

The Finance Group registers and manages in a predetermined internal system based on
the report of the allocation status to eligible projects from the business division.
Allocation status is identified for each eligible project.

-

As an internal control process, the Finance Group organizes the allocation statusannually and reports it to the Chief Financial Officer (CFO) for approval.

This internal system and internal control process can track and confirm over the redemption
period, and the proceeds will be managed appropriately.
The proceeds will be allocated within two years of issuance. In addition, the amount ofproceeds will be managed in cash or cash equivalents in the same amount as theunallocated proceeds until the allocation.
If green/transition finance is executed under this Framework in the future, it will be disclosed
in statutory documents etc. prior to execution or clearly stated in relevant contractual
documents.

Tracking of proceeds:☒

Some or all of the proceeds by green finance that are planned to be allocated are systematicallydistinguished or tracked by the Fundraiser.

☒

Disclosure of intended types of temporary investment instruments for unallocated proceeds☐

Other (please specify):

Additional disclosure:☐

Allocations to future investments only☒

Allocations to both existing and new☒

Allocation to individual expenditures☐

Allocation to a portfolio of expenditures☐

Disclosure of portfolio balance of☒

Other (please specify): The amount of existing

investments

unallocated proceeds

investment and new investment and loan of thebusiness subject to green/transition financeallocation will be disclosed in the annual report.

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GBP/GLP-4 Reporting
NYK plans to report on the allocation status and environmental benefits (impacts) on the NYK
Group website until the full amount of the proceeds is allocated. The report includes the
allocated amount, unallocated amount (finance/refinance), project outline, GHG emission
reduction amount or ratio (%) for each project category. Also, it will include relevant indicatorsand quantified environmental benefits for each project category. For ongoing projects, progressand expected environmental benefits will be included. In addition, if there is a significant change
in the transition strategy or pathway, allocation plan or project implementation status (e.g.,interruption of the project that started allocation, significant postponement on a yearly basis,
sale or retirement, etc.), NYK will report it in a timely manner or in the reporting. In the case ofloans, however, the method and scope of reporting on the allocation status of proceeds andenvironmental benefits (impacts) will be determined at the request of the lender.
<Allocation status>•

Allocated amount•

Balance of unallocated amount and its management•

Approximate amount of the proceeds being used for refinancing<Environmental benefits> *Any or all of the followings will be disclosed.
Project

Reporting Item
・ Introduction record (number of vessels) and specifications of SEP and

01

Offshore Wind PowerCTV・ Location, cardinal numbers and capacity (kW) of introduced offshore
wind power generation
・ Cardinal numbers and capacity (kW) of introduced wind power

02

Green Terminal

generation
・ Capacity of Solar PVs (kW)03Ammonia-fueled vessel

・ Numbers and main specifications of ammonia-fueled vessels

04

Hydrogen-fueled vessel

・ Numbers and main specifications of Hydrogen fuel cell vessels
・ Number and main specifications of LNG-fueled vessels

05

LNG-fueled vessel

・ GHG emissions (mt/ship/year)
・ GHG/CO2/Sox/NOx emission reduction amount or ratio compared tothe case of using HFO (heavy fuel oil)・ Number and main specifications of LNG-bunkering vessels

06

LNG-bunkering vessel

・ GHG emissions (mt/ship/year)
・ GHG/CO2/Sox/NOx emission reduction amount or ratio compared tothe case of using HFO (heavy fuel oil)・ Number of LPG-fueled vessels ・ Main specifications

07

LPG-fueled vessel

・ GHG emissions (mt/ship/year)
・ GHG/CO2/Sox emission reduction amount or ratio compared to thecase of using HFO (heavy fuel oil)29

Page 29 of 45

08

Operation efficiency &optimization

・ GHG/CO2/Sox emission reductions or ratios before and after the
introduction of equipment and systems compared to standard
operations

Allocation status reporting:☐

Project-by-project☒

On a project portfolio basis☐

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

Green finance share of total investment☐

Semi-annual

Information reported:☒

Allocated amounts☐

Other (please specify):

Frequency:☒

Annual☐Other (please specify):

Impact reporting (environmental benefits):☐

Project-by-project☒

On a project portfolio basis☐

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

Frequency:☒

Annual☐Other (please specify):☐

Semi-annual

Information reported (expected or ex-post):☒

GHG Emissions / Savings☐☐

Other ESG indicators (please specify):

Energy Savings

Means of Disclosure:☒

Information published in financial report☒

Information published in sustainability report☒

Other (please specify): NYK Report or website(NYK Integrated Report)☐

Information published in ad hoc documents☐

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

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Ⅶ Assessment Conclusion
On the basis of the information provided by NYK and the work undertaken, it is DNV’s opinion
that the NYK Green/Transition Finance Framework meets the criteria established in the
Protocol and that it is aligned with the following stated definition or purpose within the CTFH,
CTFBG, GBP/GBGLs, and GLP/GLGLs.
“provide an investment opportunity with transparent sustainability credentials”“enable capital-raising and investment for new and existing projects with environmental
benefits”
DNV Business Assurance Japan K.K.
25th January 2024

Thomas Leonard

Naoki Maeda

Head of Section, Sustainability Services

Managing Director/SCPA Vice President

Supply Chain & Product Assurance

DNV Business Assurance Japan K.K.

DNV Australia, New Zealand and Southeast Asia

Jun Chokai

Kazumasa Terada

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 and sustainability of
their business. Combining leading technical and operational expertise, risk methodology and in-depth industry knowledge, we empower ourcustomers’ decisions and actions with trust and confidence. 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 dedicatedto helping customers make the world safer, smarter and greener.

Disclaimer
Responsibilities of the Management of the Issuer and the Second-Party Opinion Providers, DNV : The management of Issuer has provided theinformation and data used by DNV during the delivery of this review. Our statement represents an independent opinion and is intended to informthe Issuer management and other interested stakeholders in the Bond as to whether the established criteria have been met, based on the

31

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information provided to us. In our work we have relied on the information and the facts presented to us by the Issuer. DNV is not responsible forany aspect of the nominated assets referred to in this opinion 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 the Issuer’s management and used as a basis for thisassessment were not correct or complete

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Schedule-1 NYK Green/Transition Finance Nominated Project
The green projects listed in the table are green/transition finance candidates that have been evaluated for eligibility at the time of preissuance eligibility assessment (as of June 2021). In the future, if additional green/transition projects are included in the finances
issued under the NYK Green/Transition Finance Framework, eligibility will be evaluated in advance by the Fundraiser, and if necessary,
DNV will evaluate them in a timely manner.

Category*2*3

Project- Self-elevating platform (SEP)- Crew transfer vessel (CTV)

01Offshore Wind*１Power

02

Green Terminal*１

03

Ammonia-fueled vessel*１

04

Hydrogen-fueled vessel *１

05

LNG-fueled vessel

06

LNG-bunkering vessel

07

LPG-fueled vessel-

Clean Transportation

Operation efficiency &-Clean Transportation

optimization-

Energy efficiency

08

Project Overview & Target Activities-

Renewable Energy-

Fuel Conversion-

Technology
Innovation-

Clean Transportation-

Fuel Conversion-

Technology
Innovation- New establishment and expansion ofgreen terminals- Ammonia-based ammonia gas
carrier and tugboat- Introduction of ships equipped withhigh-power hydrogen fuel cells

Dedicated facility required to install offshore wind
power generation
A project that contributes to reducing CO2
emissions by introducing renewable energy
equipment and energy-saving equipment into
the terminal for completed vehicle
A project that contributes to the realization of aninternational shipping roadmap aiming for GHG
zero emissions using ammonia and hydrogenfuel as energy sources in the future

Efforts for fuel conversion phase (introduction of
low-carbon fuel) shown in the roadmap frominternational shipping. Includes projects related- LNG-bunkering vesselto ship fuel conversion (LNG, LPG) and fuel- LPG-fueled vessel
supply vessels that support it.
- Development of ship construction technology (lightening & stability, propulsion
efficiency, alternative fuel equipment) that contributes to high operational efficiency &optimization, digital solution development, etc.
- LNG-fueled vessel*1 Project categories 01 to 04 are projects that have been confirmed to be eligible as green project.
*2 Projects that have been confirmed to be eligible as green projects can be incorporated into green finance in the future, and CTFBG allows them to
be incorporated as a part of transition finance.
*3 Projects that are currently classified as transition projects may become green projects due to the application of future technological innovations(e.g., application of green fuel, achievement of performance that meets CO2 emission standards as a green project, etc.).

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Schedule-2 Climate Transition Finance Eligibility Assessment Protocol
The checklists below are DNV assessment protocol created for NYK Green/Transition Finance Eligibility Assessment based on the disclosure
requirements of CTFH2023.
The "confirmed documents" in the Work Undertaken include public or private documents (materials inside the Fundraiser) etc., and areprovided by NYK as evidence of eligibility judgment for DNV.
*"Issuer" and "investor" may be read as "fundraiser" and "lender" respectively in the disclosure requirements below etc. as appropriate.

Ref.

Criteria

1

Issuer’s Climate
Transition
Strategy andGovernanceRequirements
The green, sustainability orsustainability- linked financing should bedirected toward enabling an issuer’s GHG
emissions reduction strategy inalignment with the goals of the Paris
Agreement.
Recommended information and indicators:•••

a long-term, science-based target
to align with the goals of the Paris
Agreement;
relevant and credible interimscience- based targets in the shortand medium-term on the trajectory
towards the long-term goal, in linewith the relevant regional, sector,
or international climate change
scenarios;
disclosure on an issuer’s transition
plan or climate transition strategy.
This should include specificitemization of the main levers

Work Undertaken

DNV Findings

Confirmed documents- Framework- NYK Group
Decarbonization Story- NYK Group ESG Story
2023- IMO GHG Strategy,
Ministry of Land,
Infrastructure,
Transport andTourism Maritime
Roadmap- NYK Report(Integrated Report)

The green/transition finance is geared towards the realizationof NYK Group's broader environmental strategy, represented
by NYK Group's transition strategy, which focuses on achieving
2050 carbon neutrality and science-based fiscal 2030 GHG
emission reduction targets, in line with the goals of the Paris
Agreement.

Interviews withstakeholdersi) Long-term GHG emission reduction targets (2050 Scope
1+2+3 net zero) are set and disclosed in the “NYK Group
Decarbonization Story” and the “NYK Group ESG Story
2023,” and are consistent with the goals of the Paris
Agreement.
ii) NYK has set a short- and medium-term goal of a 45%
reduction in total Scope 1+2 emissions in fiscal 2030
(compared to fiscal 2021). DNV has confirmed in the “NYKGroup Decarbonization Story” and the “NYK Group ESG
Story 2023” that this short- and medium-term goal is on
track towards the set long-term targets and is based on
relevant and credible scientific evidence.
iii) DNV has confirmed that the “NYK Group Decarbonization
Story” and the “NYK Group ESG Story 2023” clearly

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Ref.

Criteria

Requirements

•

•

2

Business model
environmental
materiality

Work Undertaken

towards GHG emissions reduction,such as a detailed capital
expenditure (CapEx) plan andrelevant technological implications(i.e., amounts to be spent, what
carbon cost is considered for
implementing such CapEx program,
operational impacts, regulatory
considerations, etc.);
clear oversight and governance ofan issuer’s climate transition
strategy, including
management/board levelaccountability; andevidence of a broader sustainability
strategy to mitigate relevant
environmental and social
externalities, including ‘justtransition’ considerations whereappropriate, and contributions to
the UN Sustainable Development
Goals (UN SDGs).

The climate transition strategy should be
relevant to the environmentally material
parts of an issuer’s business model,
taking into account potential futurescenarios which may impact current
determinations concerning materiality.
Recommended information and indicators:
Discussion on the materiality of theplanned climate transition strategy may:

DNV Findings
identify the transition strategy of the NYK Group, and thatthe transition strategy includes the technologies to be used
to achieve net zero, investment plans, and the use of ICP(internal carbon pricing) to calculate the cost of GHG
emission reductions.
ⅳ) DNV has confirmed that oversight and governance of thetransition strategy in the NYK Group are disclosed throughthe Framework and the NYK Report (Integrated Report).
v) DNV has confirmed that the transition strategy clearly
identified in the NYK Group Decarbonization Story
contributes to the SDGs and takes into account justtransition.

Confirmed documents- Framework- NYK Group
Decarbonization Story- NYK Group ESG Story
2023- NYK Report(Integrated Report)

DNV has confirmed that NYK Group's transition strategy
focuses on GHG emissions from its existing fleet through 2030
and aims to build a resilient fleet portfolio from 2030 bysteadily introducing alternatively fueled vessels that also
mitigate environmental impacts other than GHG emissions,and that it focuses on key environmental aspects of the NYK
Group's business model. The NYK Group has incorporated its
basic strategy into a business and investment plan with a time
horizon up to 2050, and has validated it by estimating thefinancial impact using multiple scenarios.

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Ref.

Criteria

Requirements
be disclosed in the form of amateriality matrix made publicly
available by an issuer or be coveredin an issuer’s annual reports; and• address the materiality of climaterelated eligible projects and/or
KPI(s) on the overall emissions
profile of an issuer.
Where Scope 3 emissions are expected tobe material but are not yet identified or
measured, a timeline for reporting should
be disclosed.
•

3

Climatetransition
strategy andtargets to bescience-based

An issuer’s climate transition strategy
should reference science-based targets
and transition pathways. There isscientific guidance around the required
rate of GHG emission reductions (the“GHG emissions reduction trajectory”) toalign the global economy with the goalsof the Paris Agreement.
The planned transition trajectory should:••

be quantitatively measurable
and aligned with the latest
available methodology;
be aligned with, benchmarked, orotherwise referenced torecognized third-party, sciencebased trajectories, where suchtrajectories exist; when third-

Work Undertaken

DNV FindingsInterviews withstakeholdersi) NYK Group materialities are identified based on theirimportance to the NYK Group and stakeholders. Specifically,
17 key themes have been identified in the three areas ofsafety, environment and human resources to realize thedesired state.
ii) Eligible projects focus on reducing GHG emissions from ship
operations and contribute to the reduction of GHG
emissions from the core business activities of the NYK
Group.
iii) DNV has confirmed that the GHG emission reduction targets
set in the NYK Group include Scope 3, and that Scope 3 GHG
emission results and reduction plans are disclosed in the NYK
Group Decarbonization Story etc.

Confirmed documents- Framework- NYK Group
Decarbonization Story- NYK Group ESG Story
2023- IMO GHG Strategy,
Ministry of Land,
Infrastructure,
Transport andTourism Maritime
Roadmap- NYK Report(Integrated Report)- NYK website(environmental loaddata)

DNV has confirmed that the NYK Group has set a transition
plan that is consistent with the science-based Paris Agreement
and a transition trajectory that is consistent with the roadmap
toward zero emissions of IMO, the Ministry of Land,
Infrastructure, Transport and Tourism, etc.
i) DNV has confirmed that the NYK Group's targets for GHG
emission reductions are set in absolute values covering all
scopes and are published along with the base year, pastemissions and four milestones toward achieving the
medium- and long-term targets.
ii) DNV has confirmed that the NYK Group's GHG emission
reduction targets were set based on the 1.5°C scenario
and that the fact is disclosed in the NYK Report etc.
iii) Specifically, the NYK Group has defined the following withregard to transition targets.

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Ref.

Criteria

Requirements
party trajectories are notavailable, consider industry peer
comparison and/or internal
methodologies/historicalperformance;••

Work Undertaken

Interviews withstakeholders

•

•

•

Deadline
Fiscal 2030

Fiscal 2050

be publicly disclosed (ideallyin mainstream financial
filings), including interim
targets; andTarget value
NYK Group Scope 1+2
45% reduction in GHG emissions(compared to fiscal 2021)
NYK Group Scope 1+2+3
net zero

These medium- and long-term targets and achievements are
published in the NYK Report, together with the disclosure
information recommended by TCFD.

be supported byindependent assurance orverification.

iv) The disclosed GHG emission results have been verified by athird-party verification body.
v) The NYK Group's medium- and long-term GHG emissions
reduction targets shown in ⅲ) are consistent with andbeyond the goals of the Paris Agreement.

Strongly recommended information andindicators:•

DNV Findingsvi) The medium-term (fiscal 2030) targets are expressed inabsolute values, with fiscal 2021 set as the base year.

short, medium, and long-term
GHG emission reduction targets
aligned with the Paris Agreement;
baseline year and historicemissions (including absoluteemissions, where intensity metrics
are the main indicator);
scenario utilized and methodology
applied (e.g., ACT, SBTi, IEA etc.).
When third-party trajectories are
not available, industry peer
comparison and/or internal
methodologies/historicalperformance;
GHG emission objectives covering
all scopes and most relevant subcategories (Scopes 1, 2 and 3);vii) The NYK Group's transition strategy has been developedwith reference to the IEA's multiple scenarios.
ⅷ) DNV has confirmed that GHG emission results are disclosed
on NYK's website (environmental load data) etc. The
disclosed information is in absolute values, covering Scope
1, 2, and 3. DNV has confirmed that the Scope 3 subcategories currently covered by disclosure are 1, 2, 3, 5, 6,
and 7, with sub-categories 1 and 3 being recognized as
the most potentially relevant to the Scope 3 GHG emission
reduction targets. DNV has also confirmed that NYK is
working to improve the scope and accuracy of the Scope 3
GHG emission calculations, and that NYK plans to further
improve them in the future.

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Ref.

Criteria

Requirements••

4

Implementationtransparency

targets formulated in either intensity
or absolute terms, noting, that
where intensity targets are used,projections on the change toabsolute emissions should also be
provided; andwhere applicable, use of carbon
capture technology as well as ofhigh- quality and high-integrity
carbon credits, and their relative
contribution to the GHG emissions
reduction trajectory in line with bestindustry practices (e.g., SBTi, VCMI
and ICVCM).

Market communication regarding theoffer of a GSS financing instrument
intended to fund an issuer’s climatetransition strategy should also betransparent, to the extent practicable, on
the underlying investment program
including capital and operational
expenditures (CapEx and OpEx).
Recommended information and indicators:••

Work Undertaken

CapEx roll-out plan consistent withthe overall climate transition
strategy and climate science anddiscussion of how it informs CapEx
decision-making within theorganization;phase-out plan regarding
activities/products incompatible

DNV Findingsⅸ) As stated in vi), target values expressed in absolute values
have been set.
ⅹ) DNV has confirmed that the NYK Group plans to take two
approaches; “GHG emission reduction” and “GHG removal”
to achieve its GHG emission reduction targets.

Confirmed documents- Framework- NYK Group
Decarbonization Story- NYK Group ESG Story
2023- NYK Report(Integrated Report)- NYK website(environmental load
data)
- Medium-Term
Management Plan Sail
Green, Drive
Transformations 2026
Interviews withstakeholders

DNV has confirmed that the investment and deployment planin relation to the NYK Group’s transition strategy includes
investments made to date and future investments andagreements on expenditures. DNV has confirmed that theoverall investment plan (investment amount) is to be
implemented in line with the timeline. DNV has also reviewed
the “NYK Group ESG Story” and has confirmed that theexecution is transparent and that the justification for the
execution has been explained and agreed by the NYK Group.
i) DNV has confirmed that the NYK Group's Medium-Term
Management Plan sets out specific areas and amounts ofinvestment in ship decarbonization toward 2030.
ii) DNV has confirmed that the Medium-Term Management
Plan and the Decarbonization Story clearly identify the ship
fuel conversion scenario and the roadmap for GHG
emission reduction technologies and their application
toward 2050 net zero.

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Ref.

Criteria

Requirements

•

•

•

•
•

Work Undertakenwith the climate transition strategy(when such activities or products
are significantly harmful or display
levels of performance inconsistent
with science-based GHG emission
reduction trajectories);
green CapEx, for example thosereferenced under the eligible green
project categories in the Green
Bond Principles, as a percentage of
total CapEx and how the ratio may
be expected to evolve over time;
disclosure on the percentage ofassets/revenues/
expenditures/divestments aligned
to the various levers;
a qualitative and/or quantitative
assessment of the potential lockedin GHG emission from an issuer’s
key assets and products;
assumptions on the internal costof carbon; anddisclosure on adverse impacts on
the workforce, community andsurrounding environment, andrelated strategies used tomitigate those negative impacts.

DNV Findingsiii) The plans presented in i) and ii) show specific investment
amounts and changes in investment targets over time.
iv) DNV has confirmed that the NYK Group's main assets andproducts (services) are ships and transport by ship used in
the shipping business, and that the GHG emissions
associated with these assets and provision of services aremainly quantified as NYK Group Scope 1 emissions andthat information is disclosed.
v) DNV has confirmed that the main assets of the NYK Groupare existing or newly built ships and that the assessmentof current and future GHG emissions relates to thenavigation of these ships.
vi) DNV has confirmed that the NYK Group has set internalcarbon prices (ICP) for 2023-2026, 2027-2030, andbeyond 2030, reflecting the real situations within thecompany and reflected them in its GHG emission reductionplans.
vii) DNV has confirmed in the Decarbonization Story that an
appropriate response to the changes arising from theimplementation of the transition strategy is planned,
including the provision of training programs on the safe
handling of alternative fuels etc.

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Schedule-3 Green Finance Eligibility Assessment Protocol
The checklist below (GBP/GLP-1 to GBP/GLP-4) is a DNV assessment protocol created for the NYK Green/Transition Finance Eligibility Assessment based on
the requirements of GBP/GBGLs and GLP/GLGLs. The "Confirmed documents" in the Work Undertaken include documents inside the Fundraiser and areprovided by NYK as evidence of eligibility judgment for DNV.
In Schedule-3, it is referred to as GBP/GLP according to the practice, but this is the standard to be referred to in the case of financing that specifies the useof proceeds such as green and transition projects in transition finance that specifies the use of proceeds based on CTFH and CTFBG, including both green
and transition contexts.

*"Issuer" and "investor" may be read as "fundraiser" and "lender" respectively in the disclosure requirements below etc. as appropriate.

GBP/GLP-1 Use of Proceeds
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1aTypes of funds

The types of green finance are classified into
one of the following types defined by
GBP/GLP.
· (Standard) Green/transition Finance・ Green/transition Revenue Finance・ Green/transition Project Finance・ Other

Confirmed documents- Framework

Through the evaluation work, DNV has confirmed that NYK
Green/Transition Finance falls into the following categories.

Interviews withstakeholders· (Standard) Green/transition FinanceThe key to a green/transition finance is thatthe proceeds will be used for a green
project, which should be properly stated in
the legal documents relating to the security.

Confirmed documents- Framework- NYK green/transition
project documents

DNV has confirmed that NYK Green/Transition Financeaims to fund a wide range of green/transition projects
focused on the NYK Group's environmental targets, as
described in the Framework and Schedule-1.
Specifically, all green/transition candidate projects listed in
Schedule-1 are evaluated as conforming to the transition
strategy, and the proceeds through the green/transition
finance are planned to be transferred to one or more
green/transition candidate projects.

1bGreen/transition
Project
Classification

Interviews withstakeholders

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Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
Through the assessment, DNV concludes that thegreen/transition candidate projects will bring concrete andactual environmental benefits.

1c

Environmental
benefits

All green projects to which the funds areused should have clear environmental
benefits, the effects of which should beassessed by the issuer and, where possible,
quantitatively demonstrated.

Confirmed documents- Framework- NYK green/transition
project documents
Interviews withstakeholders

1dRefinancing rate

If all or part of the proceeds are used or
may be used for refinancing, the issuer will
indicate the estimated ratio of the initialinvestment to the refinancing and, if
necessary. Therefore, it is recommended toclarify which investment or project portfolio
is subject to refinancing.

Confirmed documents- Framework- NYK green/transition
project documents
Interviews withstakeholders

Project classification

Category01

Offshore wind power

Renewable energy

02

Green Terminal

03

Ammonia-fueled vessel

04

Hydrogen-fueled vessel

05

LNG-fueled vessel

06

LNG-bunkering vessel

07

LPG-fueled vessel

08

Operation efficiency &optimization

Fuel conversion, technology
innovation, Clean
transportation
Fuel conversion, technology
innovation, Clean
transportation
Clean transportation, Energy
efficiency

The green/transition project will contribute to the targets
based on the NYK Group's transition strategy, and will haveenvironmental benefits such as CO2 emission reduction
through low carbonization through the projects in the
project classification and category shown in 1b.
DNV has confirmed that the environmental benefits will bequantitatively evaluated as the amount of CO2 emission
reduction and reported annually.
The fundraiser plans to use all proceeds for new
investment, refinancing, or both for eligible candidate
projects included in Schedule-1, not decided prior toissuance.
Through the annual report, DNV has confirmed that NYK
plans to clarify the estimated amount (or ratio) of theproceeds which was allocated to refinancing.

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GBP/GLP-2 Process for Project Evaluation and Selection
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

2aProject
selection
process

Green finance fundraisers should provide an
overview of the process of qualifying projects forwhich green finance funding will be used. This
includes (but is not limited to):・ The process by which the issuer determinesthat the project in question is included in thebusiness category of a qualified green project.
・ Creation of criteria for eligibility of projects forwhich green finance funding will be used
・ Environmental sustainability goals
In addition to criteria and certifications, theinformation published by issuers regarding thegreen finance process also considers the qualityof performance of the issuer's framework andenvironmental sustainability.

Confirmed documents- Framework- NYK green/transition financeevaluation and selection protocol

DNV has confirmed that the fundraiser has a processof determining the eligibility of the projects for which
the proceeds of the green/transition finance are used
and that the outline is specified in the Framework.

2b

Issuer's
Environment
al and Social
Governance
Framework

Interviews with stakeholders

Confirmed documents- Framework- NYK green/transition financeevaluation and selection protocol
Interviews with stakeholders

DNV has confirmed that the green/transition projects
carried out by the fundraiser are consistent with their
management and environmental policies and withthe transition strategies, targets, and pathways.
DNV has confirmed through the documents andinterviews with related parties that NYK is working
on the conservation of the surrounding environment
in each related group when NYK operates andimplements the project, and also regularly monitors
or plans to carry out monitoring in the PDCA cycle.

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GBP/GLP-3 Management of Proceeds
Ref.

Criteria

3a

Tracking
procedure-1

Requirements

Work Undertaken

DNV Findings

The net proceeds from of green finance should bemanaged in sub-accounts, included in subportfolio, or otherwise tracked. It should also be
certified by the issuer in a formal internal process
related to the issuer's investment and financing
operations for the Green Project.

Confirmed documents- Framework- Accounting management
rules, accounting
management system

The proceeds from the green/transition finance areincorporated into the common account of thefundraiser, and the allocation status of proceeds on a
project-by-project basis can be tracked using theinternal system, forms, etc.
DNV confirmed the system actually used and related
documents, etc., and has confirmed that the
management status of the proceeds was proved basedon them.

Interviews with stakeholders

3b

Tracking
procedure-2

During the green finance redemption period, thebalance of funds raised that is being tracked
should be adjusted at regular intervals to matchthe amount allocated to eligible projects
undertaken during that period.

Confirmed documents- Framework- Accounting management
documents

DNV has confirmed that the fundraiser plans toperiodically (annually) review the balance ofgreen/transition finance using the internal system,
forms, etc. described in 3a during the period fromissuance to redemption of green finance.

Interviews with stakeholders

3cTemporaryholding

If no investment or payment has been made in aqualified green project, the issuer should also
inform the investor of the possible temporary
investment method for the balance of unallocatedproceeds.

Confirmed documents- Framework- Accounting management
documents
Interviews with stakeholders

Through the confirmation process based on thefundraiser's internal system, forms, etc. and related
business flow, DNV has confirmed that the balance of
unallocated proceeds is recognized sequentially.
DNV has confirmed through the Framework andassessment that the balance of unallocated proceeds ismanaged in cash or cash equivalents. DNV has also
confirmed that the balance of unallocated proceeds will
be clearly identified through the reporting on the
allocation status of proceeds.

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GBP/GLP-4 Reporting
Ref.

Criteria

4aPeriodical
Reporting

Requirements

Work Undertaken

DNV Findings

In addition to reporting on the use ofproceeds and the temporary
investment of unallocated proceeds,
the issuer will consider each projectat least once a year for projects towhich the green finance proceeds
have been allocated, taking into
account the following: A list of eachproject should be provided.
- Confidentiality and competitive
considerations- Outline of each project, expectedsustainable environmental and social
effects

Confirmed documents- Framework- NYK green/transition
project documents

DNV has confirmed that the fundraiser will carry out an annual reporting ofgreen/transition finance until the proceeds are allocated and will disclose
information on the allocation status of proceeds, the projects to which theproceeds have been allocated and environmental benefits. (In the case of loans,however, the method and scope of reporting on the allocation status ofproceeds and environmental benefits (impacts) will be determined at therequest of the lender.)DNV has confirmed that the environmental benefits will be disclosed in any or all
items specified in the following table within the scope of confidentiality and aslong as reasonably practicable.
<Allocation status of proceeds>- Allocated amount- Balance and management method of unallocated proceeds- Approximate amount of the portion of the proceeds allocated to refinancing<Environmental benefits> *See the table below

44

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Ref.

Criteria

Requirements

No.

Work Undertaken

DNV Findings

Table: Green/transition project Environmental benefits *Any or all will be disclosed
Record of equipment
introduced
Project classification(Capacity, number of
equipment/vessels)
Self-elevating platform (SEP)✔＊1＊2
Crew transfer vessel (CTV)
New establishment and expansion of green terminals✔＊2

GHG, CO2
emission
reductionamountSox, NOxemission
reductionamountOffshore－－wind power
02
Green Terminal－－
Ammonia-fueled＊3
03
Ammonia-based ammonia gas carrier and tugboat✔
－－
vesselHydrogen-fueled
Introduction of ships equipped with high-power hydrogen fuel
04
✔＊3
－
－
vesselcells
05
LNG-fueled vessel LNG-fueled vessel *excluding fossil-fueled transportation
✔＊3
✔＊4
✔＊5
LNG-bunkering✔＊506
LNG-bunkering vessel✔＊3✔＊4
vessel07
LPG-fueled vessel LPG-fueled vessel
✔＊3
✔＊4
✔＊5
Operation
Software development, etc. that supports operational
08
efficiency &
－
✔*6
✔＊5
efficiency and optimization
optimization* 1: Introduction record (number of vessels) and specifications of SEP vessels and CTV* 2: Number of units and power generation capacity (MW) of the offshore wind power generation, onshore wind power generation and solar
power generation introduced* 3: Number and main specifications of vessels built according to the project classification* 4: GHG/CO2 emission reduction amount or ratio compared to the case of using heavy oil as fuel (Including planned values)* 5: SOx and NOx emission reduction amount or ratios compared to the case of using heavy oil as fuel (Excluding NOx for LPG-fueled vessel)* 6: GHG/CO2/SOx/NOx emission reduction amount or ratios before and after the introduction of equipment and systems compared to standard
operations
01

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