22-D-0455

August 1, 2022
JCR Green Bond Fra mework Evaluation b y Japan Credit Rating Agenc y, Ltd.
Japan Credit Rating Agency, Ltd. (JCR) announces the following Green Bond Framework Evaluation Results.

JCR Assigns Green 1(F) to the Green Bond Frameworkof ANA HOLDINGS INC.
Issuer:ANA HOLDINGS INC. (security code: 9202)

Subject:

Green Bond Framework of ANA HOLDINGS INC.

<Green Bond Framework Evaluation Results>
Overall Evaluation

Green 1(F)Greenness Evaluation(Use of proceeds)
Management, Operation andTransparency Evaluation

g1(F)
m1(F)

Chapter 1: Evaluation Overview
1. Overview of ANA Holdings, Inc.
ANA HOLDINGS INC. (ANA HD, or "the Company") is a holding company which has ALL NIPPON AIRWAYS CO.,LTD. (ANA), one of Japan's two major airline companies under its umbrella. The total number of passengers of ANAGroup including international and domestic flights, and LCC flights, reached 23.05 million in FY2021, which was thelargest in Japan. In FY2019, when the impact of COVID-19 was limited, total number of passengers of ANA Groupreached 59.62 million (including the LCC business). On April 1, 2013, the company shifted to a holding company
structure and changed its name from ALL NIPPON AIRWAYS to ANA HOLDINGS. Thanks to the high market sharein the domestic passenger business, which is the mainstay of ANA Group, its business foundation is stable. On
international routes, it has joined Star Alliance, the world's largest airline alliance, and has built efficient networks with
grants of ATI (Anti-Trust Immunity) on European and American routes, etc. In addition, for nine consecutive years,
ANA has been certified by Skytrax, based in the United Kingdom, as a 5-Star Airline, indicating the highest service
quality rating.
In FY2021, ANA Group's results by business segment were as follows: Air Transportation 70% (domestic passenger
22%, international passenger 6%, cargo and mail 29%,LCC 3%, and Others 11%), Airline Related 16%, Travel Services
4%, Trade and Retail 6%, and Others 3% (according to ANA HD 22/3 Annual Securities Report).

1/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

2. ANA Group's ESG Management and Initiatives for Carbon Decommissioning
ANA Group's Mission Statement is "Built on a foundation of security and trust, "the wings within ourselves" help tofulfill the hopes and dreams of an interconnected world." From the viewpoint of actively promoting ESG management,
ANA Group has positioned "Environment," "Human Rights," "Diversity, Equity & Inclusion (DEI)," and "Regional
Revitalization" as important management issues (materiality). As for the ESG management implementation structure in
ANA Group, ESG Promotion Officers (EPOs) are assigned to each group company as the person responsible forpromoting ESG management, and ESG Promotion Leaders (EPLs) are assigned to each group company and department
as the driving force for promoting ESG management in the organization. In these committees such as the Group ESG
Management Promotion Committee headed by the president of ANA HD, and the EPL Committee attended by EPLs,
initiatives related to ESG management are discussed.
Among its environmental issues, ANA Group recognizes that climate change and environmental pollution are its mostimportant issues. In April 2021, ANA Group declared Carbon Neutrality by FY2050 as its 2050 Environmental Goals,
and also set targets for zero waste ratio of plastics, paper, and other resources, as well as for reduction in the fooddisposal. As a milestone, the 2030 Environmental Targets have also been established, which include "reducing net CO2
emissions from aircraft operations by FY2030 to less than the level of FY2019." In particular, with regard to efforts to
reduce CO2 emissions, the transition strategies for carbon neutrality in 2050 have been formulated. The four main
measures for achieving the Environmental Targets are: (i) Flight Operations and Infrastructure Improvements,
Technology Developments; (ii) SAF (Sustainable Aviation Fuel) and Other Potential Cleaner Energy Sources; (iii)
Emissions Trading Schemes; and (iv) Negative Emissions Technologies.
3. About the Green Bond Framework
The scope of this evaluation is the Green Bond Framework established by ANA HD (this Framework). This Framework
limits the use of proceeds to the procurement of SAF, investments in projects/companies aiming at increasing available
SAF, and investments in utilization of Negative Emissions Technologies such as DAC (Direct Air Capture), CCS(Carbon dioxide Capture and Storage), and CCU (Carbon dioxide Capture and Utilization), which are measures that
contribute to the achievement of ANA Group Environmental Targets. JCR recognizes that the eligible criteria establishedby ANA HD in this Framework are all highly effective in improving the environment and key measures that contributeto the realization of ANA Group Environmental Targets. JCR also evaluates that the project selection process, the fundmanagement system, and the post-issuance reporting system have been properly established and are highly transparent.
Based on its JCR Green Finance Evaluation Methodology, JCR assigned "g1 (F)" for "Greenness Evaluation (Use ofProceeds)" and "m1 (F)" for "Management, Operation and Transparency Evaluation." As a result, it assigned "Green1(F)" for the overall "JCR Green Bond Framework Evaluation".
The Framework meets the standards for the items required in the Green Bond Principles1 and the Ministry of theEnvironment's Green Bond Guidelines2.

1

ICMA (International Capital Market Association) Green Bond Principles 2021
https://www.icmagroup.org/assets/documents/Sustainable-finance/2021-updates/Green-Bond-Principles-June-2021-140621.pdf
2Ministry of the Environment's Green Bond Guidelines 2022 https://www.env.go.jp/content/000047699.pdf
2/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

Chapter 2: Current Status of the Project on Each Evaluation Factor and JCR's
Evaluation
Evaluation Phase 1: Greenness Evaluation
Based on the current status described below and JCR's evaluation of the subject, JCR evaluatedthat the use of proceeds was 100% for green projects and assigned the highest rank of "g1(F)" forPhase 1: Greenness Evaluation.

(1) JCR's Key Consideration on This Factor
In this section, JCR first confirms whether the proceeds set out in the Framework is used for green projects that haveclear environmental improvement effects. Next, in cases where the use of proceeds is expected to have a negative
impact on the environment, JCR confirms whether the impact is fully examined by an internal specialist department
or an external third party and whether necessary measures have been taken for its avoidance and mitigation. Finally,
JCR confirms the consistency with the Sustainable Development Goals (SDGs).

(2) Current Status of Evaluation Targets and JCR's Evaluationa.

Environmental Improvement Effects of the Project<The Framework for Use of Proceeds>
ANA HD has defined the use of proceeds in this Framework as follows. An amount equal to the total issuanceof Green Bonds issued by the Company is expected to be used for new or existing eligible projects as new
financing or refinancing. The look back period of refinancing to existing expenditures and investments shallbe within 24 months before the issuance of Green Bonds.
Table 1. Use of Proceeds in this Framework
Eligible criteria

Eligible projects

Clean transportation

Procurement of Sustainable Aviation Fuel (SAF)
Investments in projects/companies aiming at increasing available SAF

Circulareconomy Investments

adaptedproducts, (*DAC/CCS/CCU, etc.)

inutilizationofnegativeemissions

technologies

production
technologies
processes,

andcertifiedeco-efficient products*DAC: Direct Air Capture, CCS: Carbon dioxide Capture and Storage, CCU: Carbon dioxide Capture andUtilization(Source: ANA HD Green Bond Framework)

3/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

<JCR's Evaluation for the Framework>
Use of Proceeds 1: Procurement of SAF; Investments in projects/companies aiming at increasing
available SAF
Use of Proceeds 1 is procurement of SAF; investments in projects/companies aiming at increasing available
SAF. This use of proceeds falls under the category of “Clean transportation” in the Green Bond Principles,and “Projects for clean transportation” in the Ministry of the Environment's Green Bond Guidelines.
SAF is aviation fuel produced from sustainable sources such as waste cooking oil, animal and vegetable fats andoils other than fossil fuels. Although SAF emit CO2 when they are burned as well as conventional fossil fuel,SAF is made from biomass, which CO2 emissions have been reduced in the growing process, waste food andother waste, etc., and thus can drastically reduce CO2 emissions throughout their lifecycle compared toconventional fossil fuel. SAF that has acquired ASTM standard 3 certification can be used in existing
infrastructures (existing aircraft and relevant infrastructures). Therefore, SAF has low hurdles for social
implementation and is expected as a key role in the decarbonization of the airline industry. Currently, SAF isclassified into seven Annex in ASTM Standard by the combination of alternative fuel feedstocks andmanufacturing methods (Table 2). In addition, demonstration experiments and R&D are also underway for SAF
made from CO2 in the air and in gas emissions (PtL; Power to Liquid), though no SAF has obtained ASTM
standards yet.
Although CO2 emissions saving from SAF is based on lifecycle CO2 emissions, it is said that CO2 emissions canbe reduced by about 80% compared to conventional fossil fuel (Table3), including those from processes such as
cultivation, harvesting of raw materials, and manufacturing and transportation of SAF. As ASTM standards set
the upper limit of mixing SAF with conventional fuel as shown in Table 2, the actual CO2 emission reduction
effects are lower than the above value. SAF must acquire certification from ICAO4's CORSIA5 as eligible fuels
which has CO2 emission reduction effects.
Table 2. Classification of SAF by ASTM Standard

Main raw material

Manufacturing technology

Annex1

Organic materials in Synthetic parafinkerocin (FT-SPK) that is refined bygeneralFischer-Tropsch method

Annex2Biological oils and fats

Annex3Annex4

Synthetic paraphin kerosene (Bio-SPK or HEFA)
refined by hydrogen treatment of vegetable oils, etc.
Biomass sugar
Iso-parafin (SIP) derived from fermented hydrogenprocessed sugars
Organic materials in Synthetic kerosene (SPK/A) that has an aromatics
generalderived from non-fossil resources3

Upper limit of
mixing withconventional
fuel (%)
50
50
10
50

International standards for methods and feedstocks for the production of aviation fuels developed by ASTM International.
In SAFs, ASTM D7556 and airplane fuels are addressed by ASTM D1655.
4
ICAO:International Civil Aviation Organization,
United Nations specialized agency established under the International Convention on Civil Aviation (purpose known as the Chicago
Convention) adopted in 1944 to ensure the safety and orderly development of international civil aviation and to cooperate among
countries in ensuring that international air transportation operations are operated soundly and economically on the basis of equality ofopportunity
5
CORSIA:Carbon Offsetting and Reduction Scheme for International Aviation
Carbon offsets and mitigation schemes for international aviation created by ICAO.
4/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

Annex5

Biomass sugar paper Synthetic parafinkerosene (ATJ-SPK) derived fromgarbagealcohol jets

50

Annex6
Annex7

Biological oils and fats
Microalgae

50
10Catalytic Hydrothermolysis Jet (CHJ)
Hydrocarbon-HEFA (HC-HEFA)(Source: Prepared by JCR from materials from the Aviation Bureau of the Ministry of Land, Infrastructure, Transport
and Tourism6)

Table 3. SAF's CO2 emissions per unit energy for each raw material and manufacturing method (Examples)
Rate of reduction
Raw materials

Manufacturing

CO2 emissions per GJ (t-frommethodCO2 per GJ)

conventional fuel
(%)

SAF

Forest Residuals

FT

0.010584

Camelina (plant of theBrassica family)

HEFA

0.041838

Sugar cane

SIP

0.0321

52

Sugar cane isobutanol

ATJ

0.0207

69

Waste cooking oil

HEFA

0.014878

Agricultural waste

FT

0.007789

0.0670-(Reference) Conventional aviation fuel(Source: Prepared by JCR from CORSIA materials7)

As mentioned earlier, SAF, which is expected to reduce CO2 more effectively than conventional fuel, is one ofthe promising measures for the decarbonization of the airline industry. CORSIA also raises SAF as one of thematerial measures for CO2 reduction. In Japan, the Ministry of Land, Infrastructure, Transport and Tourism has
also positioned the promotion of introducing SAF as one of its material strategies for accelerating thedecarbonization of aviation. Technological development and commercialization for the dissemination of SAF
have already progressed mainly in the U.S. and Europe.
Figure 1: Process Chart for Promoting Decarbonization of Aviation(Conference on Reducing CO2 in the Aircraft Operation Sector)
Process Chart (3) Promotion of SAF Introduction, Carbon Credits
Please refer the website of Ministry of Land, Infrastructure, Transport and Tourism
https://www.mlit.go.jp/common/001445923.pdf (Japanese)(Source: Aviation Bureau, Ministry of Land, Infrastructure, Transport and Tourism)8

While SAF is expected to play an important role in decarbonization, dissemination has challenges. First, thesupply prospects for raw materials are uncertain. As of 2020, global SAF production was only 0.03% of demand,and demand for SAF is expected to grow further in the future. Therefore, securing a stable supply of raw materials
6

The 1st Meeting of the Study Group on Reducing CO2 in the Aircraft Operations Sector of the Air Transport Bureau of the Ministry ofLand, Infrastructure, Transport and Tourism (Material 2-1 https://www.mlit.go.jp/common/001395880.pdf on March 22, 2021)
7
CORSIA SUPPORTING DOCUMENT CORSIA Eligible Fuels – Life Cycle Assessment Methodology
https://www.icao.int/environmentalprotection/CORSIA/Documents/CORSIA%20Supporting%20Document_CORSIA%20Eligible%20Fuels_LCA%20Methodology.pdf
8Schedule for Promoting Decarbonization of Aviation by the Ministry of Land, Infrastructure, Transport and Tourism (Review Meeting on
Reducing CO2 in the Aircraft Operation Field) https://www.mlit.go.jp/common/001445923 December 2021.pdf
5/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

is urgently needed. For example, when a biomass sugar such as sugar cane is used as a raw material, there is a
conflicts with foods demand. In addition, there are businesses that are currently making a living by waste foodoils and waste, and the use of these oils for power generation, feed, and industrial use has been established.
Therefore, it is a challenge how to promote the conversion from existing uses. The price aspect is anotherchallenge. The production cost of SAF is currently said to be about 2-10 times that of conventional fossil fuel,and it is hopefully expected to be about 1.5-4 times in the future as well. Reducing manufacturing costs isessential for the dissemination of SAF. In addition, in parallel with expanding supply volumes, how to develop
supply networks in each country and increase the number of refueling bases worldwide is also an important issue
for the SAF in the medium-to long-term, in conjunction with the aforementioned issues.
Figure 2: Global SAF Demand Outlook(Source: IATA Net Zero 2050: sustainable aviation fuels9)

Figure 3: SAF Manufacturing Costs(Source: WEF Clean Skies for Tomorrow: Sustainable Aviation Fuels as a Pathway to Net-Zero Aviation10)

9

IATA Net zero 2050: sustainable aviation fuels 2022 June
https://www.iata.org/en/iata-repository/pressroom/fact-sheets/fact-sheet---alternative-fuels/
10
WEF Clean Skies for Tomorrow: Sustainable Aviation Fuels as a Pathway to Net-Zero Aviation 2020 November
https://www3.weforum.org/docs/WEF_Clean_Skies_Tomorrow_SAF_Analytics_2020.pdf
6/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

Although ANA Group plans to continue implementing energy-saving measures by improving operational
methods, it has expressed the view that it would be difficult to obtain a large-scale effect toward decarbonization
through energy-saving measures alone. In addition, according to the Ministry of Land, Infrastructure, Transport
and Tourism's schedule for promoting decarbonization, the development of innovative technologies such as
electric aircraft and hydrogen aircraft promoted by aircraft manufacturers is expected to be introduced into shortdistance and small-sized aircraft by 2050. As a result, it is unlikely to be the main alternative for ANA Group,
which has a large number of large- and medium-sized aircraft. Based on the above, ANA Group believes that inpursuing both environmental measures and economic growth, it is necessary to promote the use of SAF, which
are expected to have an effect on the decarbonization of long-distance, large- and medium-sized aircraft. In
addition, ANA Group assumes using SAF has the advantage of being able to use existing aircraft and engines, aswell as continuing to use existing airport fueling facilities, and that the feasibility of social implementation ishigh.
ANA Group also recognizes the challenges of SAF mentioned above. ANA Group believes that although raw
material constraints and technological difficulties of both stable raw material sourcing and lower manufacturingcosts are different from each Annex, as none of them alone will ensure the total amount of SAF the entire airline
industry needs, it needs to take advantages of all options. To this end, ANA Group requests support from theGovernment of Japan in order to promote the development and manufacturing of SAF and build supply chainsby combining various technologies and raw materials. In addition, ANA Group is striving to strengthen
partnerships between the public and private sectors, such as "ACT FOR SKY" established in 2022. It is avoluntary organization consisting of private companies. In ACT FOR SKY, industrial sectors, such as the foodindustry, which had not previously been involved in air transportation or energy businesses, are also participating,and progress is expected in cross-sector efforts to build the supply chain of SAF, such as the provision of raw
materials such as waste food oil, city garbage, and biomass, and the creation of an efficient resource circulation
mechanism.

Use of proceeds 2: Investments in utilization of negative emissions technologies (DAC/CCS/CCU, etc.)
Use of proceeds 2 refers to investments in utilization of negative emissions technologies (DAC/CCS/CCU,etc.). This use of proceeds falls under the category of “Circular economy adapted products, production
technologies and processes and/or certified eco-efficient products” in the Green Bond Principles, and“Projects concerning eco-efficient products, production technologies, and processes” in the Ministry of theEnvironment's Green Bond Guidelines.
The DAC, CCS, and CCU assumed by ANA HD as negative emissions technologies are outlined below. These
negative emissions technologies are proclaimed in IPCC11's Sixth Report12 as essential techniques for mitigatingclimate change.
DAC: A technology for the direct recovery of CO₂ from the atmosphere by processes such as liquid andsolid absorbents and membrane separation. Unlike the CCS/CCU described below, lowconcentration CO2 of around 0.04% are targeted to recover CO2 after it has diffused into theatmosphere.
According to IEA13, 18 small DAC facilities are currently in operation in the U.S., Canada and EU.
11

IPCC: Intergovernmental Panel on Climate Change
IPCC Sixth Assessment Report Climate Change 2022: Mitigation of Climate Change 2022 April
https://report.ipcc.ch/ar6wg3/pdf/IPCC_AR6_WGIII_FinalDraft_FullReport.pdf
13
IEA Direct Air Capture A key technology for net zero 2022 April
https://iea.blob.core.windows.net/assets/78633715-15c0-44e1-81df-41123c556d57/DirectAirCapture_Akeytechnologyfornetzero.pdf
12

7/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

Some companies are pursuing large-scale DAC projects, including Swiss-based Climeworks,
which was the first company to successfully commercialize it worldwide, as well as Canadianbased Carbon Engineering and U.S.-based Global Thermostat. Although no company has yet
succeeded in practical application in Japan, Kawasaki Heavy Industries, etc. are advancing
research, development, and verification.
CCS: A technique for separating and collecting CO2 discharged from power plants and chemical plants
prior to atmospheric dissemination, and storing and injecting it deeply into the ground at least
1,000 m. The separated and recovered CO2 are transported to the facilities where they are injected
into the ground using special pipelines or transportation vessels. CO2 storage area is a reservoir
made of sandstone with a lot of pores, and the reservoir covers oil and gas fields and deep salt
water layers that have already been produced. The upper part of the reservoir must be covered witha "shielding layer" made of mudstone, etc. that does not pass through CO2.
Twenty-seven CCS projects are in operation in the United States, which has been working on CCS
for more than 40 years, as well as in North America, Europe, the Middle East and other countries
around the world. Large-scale demonstration tests have also been conducted in Tomakomai inJapan. More than 0.3 million tons of CO2 have been injected14.
CCU: Technologies for collecting CO2 discharged from power plants, chemical plants, etc. by separatingthem from other gases and using them as raw materials for new products/services. Applications arevery broad, with direct use (non-conversion) that does not chemically and biologically alter CO2
and methods (conversion) that convert them into valuable products. Carbon recycling, which
produces synthetic fuels and plastic raw materials, can also be said to be a form of CCU.
Currently, 230 million tons of CO2 are used worldwide every year. Existing uses include use infertilizers, enhanced crude oil recovery (EOR), production of food and carbonated beverages, dry
ice for cooling, and other non-conversion uses using CO2 directly 15 . In the future, the use of
conversion, such as the use of methane and methanol as fuel, is expected to advance as a
substitution of fossil fuels.
In order to achieve its medium- and long-term environmental targets, ANA Group has placed aviation fueldecarbonization including the use of SAF at the heart of its transition strategies, as mentioned above. While
technological innovations are expected to improve the CO₂ emission reduction rate of SAF, the Group believes
that it is essential to utilize CO2 removal technologies to capture, absorb, and store and solidify CO₂ in theatmosphere (negative emissions technologies: DAC, CCU, CCS, etc.), in order to absorb unavoidable CO₂
emissions. ANA Group plans to remove 1% of CO₂ emissions from aircraft operations by 2030 and 10% by 2050
through the use of negative emissions technologies. In the future, the Group is also considering using captured
CO₂ as a raw material for aviation fuel.
Some of these technologies have begun to be put to practical use, such as CCS, but international rules forcertificating the CO₂ removal effects of negative emissions technologies and emissions trading, have not been
firmly established. In order to actively utilize negative emissions technologies, it is necessary to closely monitor
these trends and catch-up the situation quickly. ANA Group plans to actively participate in discussions on rulemaking such as CORSIA, which stipulates the utilization of negative emissions technologies in the airline
industry worldwide.

14
15

Japan CCS Co., Ltd. (JCCS) https://www.japanccs.com/en/about/
IEA Putting CO2 to Use Creating value from emissions 2019 September
https://iea.blob.core.windows.net/assets/50652405-26db-4c41-82dc-c23657893059/Putting_CO2_to_Use.pdf
8/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

Based on the above, the JCR evaluates the use of proceeds defined by ANA HD in this Framework as a highly
environmentally beneficial project that contributes to the decarbonization of the airline industry. ANA Groupacknowledges the issues of SAF and negative emissions technologies and plans to take appropriate measures.

b. Negative Impacts on the Environment
ANA HD specifies potential environmental and social risks for all eligible projects and measures to reduce themin the Framework as follows:(2.2 Process for Project Evaluation and Selection< Potential Environmental and Social Risks and Activities to Offset Risks>)
SAF is produced from various raw materials such as biomass, waste cooking oil, and waste gas, etc. Sugar
crops, one of the raw materials, have been pointed out as competitive risk on food and other applications. In
addition, the possible negative impacts on environment such as water, air and soil, and human rights
throughout the supply chain of SAF are within concern. To avoid these potential risks, ANA Group purchases
EU Renewable Energy Directive qualified SAF, or *CORSIA Eligible SAF, which meets certain criteria
regarding these issues.
*CORSIA: Carbon Offsetting and Reduction Scheme for International Aviation
The amount of CO2 emissions from aircraft operations basically has no differences between the case of using
SAF and of using conventional aviation fuel. The effects of using SAF on reducing CO2 emissions must be
evaluated in terms of lifecycle emissions, including those from processes such as the cultivation and harvestingof raw materials and the production and transportation of SAF. ANA Group purchases SAF that has obtained athird-party evaluation of the CO2 emission reduction rate based on life-cycle assessment.
With regard to utilization of negative emissions technologies, potential risks are supposed to include negative
impacts on ecosystems caused by earthwork during plants construction, noise pollution, etc. To mitigate thesenegative impacts, the Company will confirm that appropriate measures are taken to address these issues
relevant to the investments.
To further strengthen the foundation of ESG management, ANA Group has established the "Social
Responsibility Guidelines" which all Group employees must follow. The guidelines stipulate compliance withthe laws and regulations of each country and region, respect for human rights and diversity, and consideration
for the environment.
(Source: ANA HD Green Bond Framework)<JCR's Evaluation for the Framework>
In the case of SAF, the use of proceeds 1 in this Framework, ANA HD addresses the issues with regard to material
sourcing and manufacturing processes of SAF. In order to mitigate these issues, ANA Group only purchases SAF
which is EU Renewable Energy Directive qualified or CORSIA eligible. In addition, as the amount of CO2
emissions of SAF varies from each when being assessed by lifecycle, ANA Group only purchases SAF whichobtains a third party evaluation regarding CO2 emission reduction rate. For negative emissions technologies, theuse of proceeds 2, negative impacts on ecosystems, noise, etc. are identified as risks during construction andafter starting operations of the plant. When conducting investments, it is planned to confirm that the above risks
are small at the time of construction, and to confirm that the investee will take appropriate measures after
commencement of operations.
9/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

Based on the above, JCR evaluates that ANA HD has appropriately identified and addressed negativeenvironmental impacts.

c. Consistency with SDGs
JCR evaluated the use of proceeds set out in the Framework contributes to the following SDGs goals and targets
in reference to ICMA's SDGs mapping.
Goal9：Industry, innovation and infrastructure
Target9.4 By 2030, upgrade infrastructure and retrofit industries to makethem sustainable, with increased resource-use efficiency and greater
adoption of clean and environmentally sound technologies and industrial
processes, with all countries taking action in accordance with their respective
capabilities
Goal11：Sustainable cities and communities
Target11.2 By 2030, provide access to safe, affordable, accessible andsustainable transport systems for all, improving road safety, notably by
expanding public transport, with special attention to the needs of those invulnerable situations, women, children, persons with disabilities and older
persons
Goal12：Responsible consumption and production
Target12.5 By 2030, substantially reduce waste generation throughprevention, reduction, recycling and reuse
Goal13：Climate action
Target13.3 Improve education, awareness-raising and human andinstitutional capacity on climate change mitigation, adaptation, impact
reduction and early warning

10/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

Evaluation Phase 2: Management, Operation and Transparency Evaluation
Based on the current situation described below and JCR's evaluation of the subject, JCR evaluatedthat the management and operational systems have been well developed, that transparency is very
high and that it can be fully expected for the project to be implemented as planned and for theproceeds to be adequately allocated. In Phase 2, JCR evaluated the management, operation andtransparency to be the highest level of "m1(F)".

1. Appropriateness and Transparency Concerning Selection Standards and Processes
for Use of Proceeds(1) JCR's Key Consideration on This Factor
In this section, JCR confirms the objectives to be achieved through green financing, the appropriateness of green
project selection standards and processes, and whether or not a series of processes are properly disclosed to investors
and others.

(2) Current Status of Evaluation Targets and JCR's Evaluation
a.

Goals

<The Framework for Green Finance Issuance Objectives >(1.1. ANA Group ESG Management and Decarbonization Approach)In promoting ESG management, ANA Group has identified Environment, Human Rights, Diversity, Equity& Inclusion (DEI), and Regional Revitalization as four key material issues. By appropriately addressingthese issues through our business activities, our policy is to contribute to the realization of a sustainable
society and to enhance our corporate value.
With regard to "Environment", we have been working on reducing environmental burdens, including
establishing the "ANA Group Environmental Principles" in 1998 and the "ANA Group Environmental
Policies" in 2017. Recently, we have set "2050 Environmental Goals" (the "Goals"), in which achieving
Carbon Neutrality by FY2050 is declared, and have established "2030 Environmental Targets" (the "Targets")
as a roadmap. Furthermore, we have developed ANA Group Transition Strategies to achieve the Goals andthe Targets.
<ANA Group Environmental Principles>
The mindset to value the environment starts with recognition of the burden we place on the Earth.
We will use natural resources and energy with care and contribute to attaining a prosperous andsustainable society.
We will take the initiative in environment conservation activities and share our care for the Earth withpeople around the world.
<ANA Group Environmental Policies>
ANA Group, recognizing the global environmental issues, including global warming and the conservationof biodiversity, as a quintessential management task, aims to be an "Environmental Leading Airline Group"
through all engaged activities.
1.

We will precisely grasp and analyze the impact of our business activities on the environment, anddisclose it to society.

11/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

2.

We will promote environmental preservation in line with social needs that go above and beyond thepertinent laws and regulations, through widespread conversations with stakeholders.

3.

We will promote measures to reduce the environmental impact in all related businesses and operations,and we actively pursue possibilities of new technologies and services for this purpose.

4.

We will constantly pay close attention to the environmental consideration of supply-chains, and promote
the environment-conscious procurement.

5.

We will intensify the "3R" (Reduce, Reuse, Recycle) activities and waste management in an effort tocontribute to the creation of a recycling society.

6.

We will encourage our workforce to engage in environmental preservation activities, raising each andevery employee's awareness and consciousness.

<2030 Environmental Targets>
By FY2030, ANA Group will:
1.

Reduce net CO2 emissions from aircraft operations to less than FY2019 levels.

2.

Reduce CO2 emissions from non-aircraft operations by 33% or more compared to FY2019 levels.

3.

Reduce resource waste ratio (plastics, paper, etc.) by 70% or more compared to FY2019 levels.

4.

Reduce food waste ratio (in-flight/airport lounge meals, etc.) to less than 3.8%.

<2050 Environmental Goals>
By FY2050, ANA Group will:
1.

Reduce net CO2 emissions from aircraft operations to zero.

2.

Reduce net CO2 emissions from non-aircraft operations to zero.

3.

Reduce resource waste ratio (plastics, paper, etc.) to zero.

4.

Reduce food waste ratio (in-flight/airport lounge meals, etc.) to less than 2.3%.
(Source: ANA HD Green Bond Framework)<JCR's Evaluation for the Framework>
In April 2021, ANA Group set long-term goals of achieving carbon neutrality by FY2050. The Group has alsoannounced medium-term targets for 2030 in order to achieve the goals above at the same time. Among these
medium- and long-term environmental initiatives, the use of proceeds in this Framework is particularly targetedat projects that contribute to the decarbonization of the airline business as the core business of the Group.

12/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

Figure 4: ANA Group Environmental Targets/Goals(Source: Documents provided by ANA HD)

Based on the above, JCR has evaluated that the businesses covered by this Framework are consistent with ANAGroup medium-and long-term environmental targets/goals.

b. Selection criteria
The selection criteria for the use of proceeds of ANA HD are as described in Phase 1 of the evaluation. JCR
evaluates the aforementioned selection criteria as being at highly significant for environmental improvement.

13/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

c.

Processes<The Framework for Processes >(2.2. Process for Project Evaluation and Selection)
The Corporate Strategy Department, Finance Department and Sustainability Department evaluated andselected the eligible criteria and projects. Final confirmation of the selection of eligible projects was madeby the Group ESG Management Promotion Committee, which headed by the president and chaired by the
director in charge of ESG promotion of the Company, consisted of directors, executive officers, and fulltime corporate auditors of the Company and its subsidiaries including ALL NIPPON AIRWAYS CO., LTD.
(Source: ANA HD Green Bond Framework)<JCR's Evaluation for the Framework>
In the process of selecting Green Projects, the eligibility is judged by the Corporate Strategy Department, theFinance Department, and the Sustainability Department, which are departments with expert knowledge of thisuse of proceeds. Through interviews with ANA HD, JCR confirmed that each department was responsible forthe selection, planning, and implementation of this project with clear expertise and responsibilities for theirassigned duties. In addition, the final confirmation was conducted at the Group ESG Management Promotion
Committee with the attendance of ANA Group executives and it was confirmed that the management team wasproactively involved in the selection process.

ANA HD's goals, selection criteria and processes set out in this Framework are properly structured. ANA HD
will specify targets, selection criteria, and processes as requirements to be met by the Green Bonds in the
Framework, and will disclose the Framework documents on the website. Therefore, transparency is ensured.

14/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

2. Appropriateness and Transparency of Management of the Proceeds(1) JCR's Key Consideration on This Factor
It is usually assumed that the management of the proceeds varies widely depending on issuers. JCR confirms whether
the proceeds are surely appropriated to the green project and whether a mechanism and internal system are in place
to enable easy tracking and management of the appropriation of funds.
JCR also attaches importance to whether the proceeds are scheduled to be used for a green project at an early stage
and to the management and operation methods for unallocated funds.

(2) Current Status of Evaluation Targets and JCR's Evaluation<The Framework for Management of the Proceeds>(2.3. Management of Proceeds)
Finance Department of the Company will be responsible for allocating and managing the proceeds of the issued
Green Bonds based on this Framework. To ensure the proceeds are/will be properly allocated to eligible projects, theDepartment will use an internal management system, which is able to track both allocated and unallocated proceeds.
Also, the Department will check the total amount of allocated and unallocated proceeds periodically to ensure its
consistency with the amount of issued Green Bonds. Until the proceeds are fully allocated to eligible projects, theoutstanding proceeds will be held in cash or cash equivalents or invested in highly secured and liquid assets such as
negotiable certificates of deposit.
The proceeds will be fully allocated by the end of March of the fiscal year, in which is of the 3rd anniversary of theissuance of Green Bonds.
In the event of outstanding proceeds resulted from divestment of allocated projects/companies, all of them will bereallocated to other eligible projects.
(Source: ANA HD Green Bond Framework)<JCR's Evaluation for the Framework>
As described in the Framework above, ANA HD will ensure that the proceeds from Green Bonds are managed
properly until fully allocated to the eligible projects. The officer in charge of finance will confirm the allocation
status of proceeds on an annual basis. The outstanding proceeds from Green Bonds are maintained in safe andliquidity assets, such as cash or cash equivalents, or certificates of deposit, until they are allocated to the eligible
projects.
In addition, the allocation status will be subject to internal and external audits by the Audit Department during thenormal financial process. In addition, vouchers and relevant documents related to proceeds allocation will be stored
for nine years in accordance with the internal accounting regulations of ANA Group.
Based on the above, JCR evaluates ANA HD's defined management of proceeds as being reasonable and transparent.

15/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

3. Reporting(1) JCR's Key Consideration on This Factor
In this section, JCR evaluates whether the disclosure system for investors before and after the issuance of green
finance, which is implemented with reference to the Framework, is planned in detail and in an effective manner.

(2) Current Status of Evaluation Targets and JCR's Evaluation<The Framework for Reporting>(2.4. Reporting)[Allocation Reporting]
Until the proceeds are fully allocated, the Company will annually confirm the allocation status by the Chief
Financial Officer, and report on its website the amount of both allocated and unallocated proceeds, and how theunallocated proceeds, if any, will be managed. In the case of the proceeds allocated for refinancing existing
expenditures and investments, the amount or the percentage of that in total amount will be disclosed. If there isany major change in the allocation plan, information of the change will also be disclosed.
[Impact Reporting]
We will disclose the following information annually on our website until the Green Bonds are fully redeemed,
within confidentiality agreements and so far as is reasonably practicable.
Eligible projects

Impact reporting items

Procurement of SAF

Ratio of SAF used in total aviation fuel consumption (%)(

Investments

inprojects/companies
aimingat＋SAF)= Ratio of SAF used in total aviation fuel consumption

List of the projects/companies
Purpose of each investment

increasing

available SAF
Investments in utilization

List of the projects/companies

of

Purpose of each investment

negativeemissions

technologies(DAC/CCS/CCU, etc.)(Source: ANA HD Green Bond Framework)<JCR's Evaluation for the Framework>
a. Reporting on the allocation status of the proceeds
ANA HD expects to disclose the allocation status of the proceeds on its website on a yearly basis until all of theproceeds are allocated to the eligible projects. In the event that there is a major change in the allocation plan of
the proceeds or that there are unallocated amounts, the Company plans to disclose the fact in the same way. JCR
evaluates that reporting on the fund allocation status is appropriate.
16/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

b. Reporting on environmental improvement effects
ANA HD is scheduled to disclose the impact reporting on its website annually, as described above until theGreen Bonds are fully redeemed. The contents of this reporting include concrete and quantitative data on theeffects of environmental improvement, and JCR evaluates that it is appropriate to fully disclose the indicators
for the effects of environmental improvement regarding the items to be disclosed and the frequency of
disclosure stipulated in this report plan.

17/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

4. Organization's Environmental Initiatives(1) JCR's Key Consideration on This Factor
In this section, JCR evaluates whether the management of the issuer regards environmental issues as a matter ofhigh priority for management and whether the green finance policy, process and selection criteria for green projects
are clearly positioned through the establishment of a department specializing in environmental issues or incollaboration with external organizations.

(2) Current Status of Evaluation Targets and JCR's Evaluation
ANA Group's Mission Statement is "Built on a foundation of security and trust, "the wings within ourselves" help
to fulfill the hopes and dreams of an interconnected world." Based on this management philosophy, the Group has
identified four key management issues (materiality): "Environment," "Human Rights," "Diversity, Equity &Inclusion (DEI)," and "Regional Revitalization". By addressing appropriately to these items, the Group's policy is
to simultaneously create "social value" and "economic value" and increase corporate value. ANA Group formulatedmateriality in 2016, and since then every year it reconfirms the validity of these materiality while having dialogue
with a variety of stakeholders, including institutional investors. Although there was a change in 2022 from Diversity& Inclusion (D&I) to Diversity, Equity & Inclusion (DEI), these four items are the issues that ANA Group has
consistently emphasized to improve social and economic value since 2016.
Figure 5: Materiality of ANA Group and Reasons for Selection*As of July 2022, "Diversity & Inclusion" in the chart has been changed to "Diversity, Equity & Inclusion."(Source: ANA Group website)
18/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

In ANA Group, a wide range of departments throughout the Group address these important issues in accordancewith the division of operations of each department. The Sustainability Department of ANA HD is mainly responsible
for coordinating the efforts of each department, acting as a liaison with external parties, and acting as the secretariat
for committees related to the promotion of ESG management. In addition, in order to promote ESG management
throughout the group, ESG Promotion Officers (EPOs) are assigned to each group company as responsible persons
for promoting ESG management and members of the Group ESG Management Promotion Committee, and ESG
Promotion Leaders (EPLs) are assigned to each group company and department as the driving force behind thepromotion of ESG management in the organization.
Major conferences for promoting ESG management include the Group ESG Management Promotion Committee
and the EPL Committee under its umbrella. The Group ESG Management Promotion Committee is headed by thepresident of ANA HD and chaired by the director in charge of the Sustainability Promotion (CEPO: Chief ESG
Promotion Officer), and consisted of directors and executive officers of ANA HD and Group companies, and fulltime corporate auditors. The ongoing discussions on important policies and measures related to the promotion of
ESG management throughout the Group, including risk management and compliance, have held four times in
FY2021. All of the discussions are reported to the Board of Directors and the Board of Corporate Auditors, andparticularly important issues directly linked to management are submitted to the Group Management Committee andreported to the Board of Directors and the Board of Corporate Auditors. The EPL Committee is held twice a year
attended by EPLs. At the Committee, information on ESG-related initiatives in each group company is sharedcomprehensively, and it is linked to the promotion of initiatives in each group company and department.
Figure 6: ANA Group ESG Management Implementation Structure(Source: ANA Group website)

Furthermore, in April 2021, ANA Group declared carbon neutrality by FY2050 as its "2050 Environmental Goals",and established "2030 Environmental Targets" as its roadmap. In formulating the medium- and long-term
environmental targets, ANA Group referred to opinions of experts such as WWF Japan. ANA Group also formulated
the transition strategies to achieve these goals. The transition strategies are based on not only roadmap by ATAG16 ,16

ATAG:Air Transport Action Group
Global alliance that promotes the sustainability of the airline industry
19/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

an international expert organization of airline industry focusing on issues of sustainable development, but also
information by TPI 17 , IPCC11, and the Schedule for Promoting Decarbonization of Aviation published by the
Ministry of Land, Infrastructure, Transport and Tourism8, as well as The Long-Term Strategy of United States
published by the United States Government18 and other national and international scenarios. ANA Group Transition
Strategies set forth four important measures ((i) Flight Operations and Infrastructure Improvements, Technology
Development, (ii) SAF and Other Potential Cleaner Energy Sources, (iii) Emission Trading Schemes, (iv) Negative
Emissions Technologies). The use of proceeds in this Framework is all an initiative that contributes to importantmeasures in the Transition Strategies.
Figure 7: ANA Group Transition Strategies(Source: Documents provided by ANA HD)

Recognizing the importance of climate-related financial disclosures, ANA Group became the first airline group in
Japan to support the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) in March
2019, and discloses information in April 2022. Furthermore, in 2021, it obtained an "A-" rating from the Carbon
Disclosure Project (CDP), which provides a high level of transparency in climate-related disclosures among airline
industry. ANA HD also actively involves in sustainable finance, issuing green bonds in 2018, social bonds in 2019,and sustainability-linked bonds in 2021. In April 2022, ANA Group newly established a specialized department
called the Decarbonization Team in the Corporate Strategy Department in order to accelerate efforts toward carbon
neutrality in 2050.

17

TPI: Transition Pathway Initiative
Low Carbon Economic Promotion Initiative Formulated in 2017 with the Participation of More than 120 Large Institutional Investors
18
THE LONG-TERM STRATEGY OF THE UNITED STATES Pathways to Net-Zero Greenhouse Gas Emissions by 2050,2021 November
https://www.whitehouse.gov/wp-content/uploads/2021/10/US-Long-Term-Strategy.pdf
20/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

Based on the above, JCR evaluated that ANA Group's management considers environmental issues as one of thehighest prioritized issues for its business, and that internal and external experts with specialized knowledge are
involved in sustainability initiatives as an organization.

21/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

■Evaluation result
Based on its JCR Green Finance Evaluation Methodology, JCR assigned "g1 (F)" for the "Greenness Evaluation (Useof Proceeds)" and "m1 (F)" for the "Management, Operation and Transparency Evaluation." As a result, it assigned"Green 1 (F)" for the "JCR Green Bond Framework Evaluation". The Framework meets the standards for the items
required in the Green Bond Principles, and the Green Bond Guidelines[JCR Green Bond Framework Evaluation Matrix]
Management, Operation, and Transparency Evaluation

Greenness Evaluation

m1(F)

m2(F)

m3(F)

m4(F)

m5(F)

g1(F)

Green 1(F)Green 2(F)Green 3(F)Green 4(F)Green 5(F)g2(F)

Green 2(F)Green 2(F)Green 3(F)Green 4(F)Green 5(F)g3(F)

Green 3(F)Green 3(F)Green 4(F)Green 5(F)Not qualified

g4(F)Green 4(F)Green 4(F)Green 5(F)Not qualified

Not qualified

g5(F)Green 5(F)Green 5(F)Not qualified

Not qualified

Not qualified(Responsible analysts for this evaluation) Atsuko Kajiwara and Haruna Goto

22/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.

Important explanations of this Evaluation
1. Assumptions, Significance and Limitations of JCR Green Bond Framework Evaluation
JCR Green Bond Framework Evaluation, which is determined and provided by Japan Credit Rating Agency, Ltd. (JCR), covers thepolicies set out in the Green Bond Framework, and expresses JCR's comprehensive opinion at this time regarding theappropriateness of the Green Project as defined by JCR and the extent of management, operation and transparency initiatives related
to the use of funds and other matters. Therefore, it is not intended to evaluate the effects of specific environmental improvements
and the management, operation and transparency of individual bonds and borrowings, etc. to be implemented based on thesepolicies. In the event an individual bond or individual borrowing based on this Framework is subject to a green finance evaluation,
it is necessary to conduct a separate evaluation. JCR Green Bond Framework Evaluation does not prove the environmental
improvement effects of individual bonds or borrowings implemented under this Framework, and does not assume responsibility
for their environmental improvement effects. JCR confirms the environmental improvement effects of funds procured under theGreen Bond Framework measured quantitatively and qualitatively by the issuer or by a third party nominated by the issuer, but inprinciple it does not directly measure such effects.
2.

Method used to conduct this evaluation
The methodologies used in this assessment are described in "JCR Green Finance Evaluation" on the "Sustainable Finance ESG"
section of the JCR website (https://www.jcr.co.jp/en).

3. Relationship with Acts Concerning Credit Rating Business
JCR Green Finance Evaluation is determined and provided by JCR as a related business, which is different from its activities related
to the credit rating business.
4. Relationship with Credit Ratings
The Evaluation is different from the Credit Rating and does not promise to provide or make available for inspection a predetermined
credit rating.
5. Third-Party Evaluation of JCR Green Bond Framework Evaluation
There are no capital and/or personnel relationships that may result in a conflict of interest between the subject of this evaluation
and JCR.

■ Matters of Attention

The information contained in this document was obtained by JCR from the issuer and from accurate and reliable sources. However, such information may be mistaken
for human, mechanical or other reasons. Therefore, JCR makes no representation or warranty, whether express or implied, as to the accuracy, result, appropriateness,timeliness, completeness, marketability or fittingness for any particular purpose of such information, and assumes no responsibility for any errors, omissions orconsequences of using such information. JCR shall not be liable for any loss of opportunity and extraordinary, indirect, incidental or consequential damages of any kind,including any loss of money, which may result from any use of such information under any circumstances, whether contractual liability, tort liability, negligence or othercauses of liability, and whether or not such damages are foreseeable or unforeseeable. JCR Green Finance Evaluation does not express any opinion on various risks(credit risk, price fluctuation risk, market liquidity risk, price fluctuation risk, etc.) related to green finance, which is the target of the evaluation. Furthermore, it is anexpression of JCR's opinion at the present time and does not represent facts nor does it make any recommendation regarding risk assessment or decisions on the purchase,sale or holding of individual bonds, commercial paper, etc. JCR Green Finance Evaluation may be modified, suspended or withdrawn due to changes in information,lack of information or other reasons. All rights pertaining to this document, including data from JCR Green Finance Evaluation, are held by JCR. All or part of thisdocument, including data from JCR Green Finance Evaluation, is prohibited from being reproduced, modified or otherwise altered without the permission of JCR.

■ Glossary

JCR Green Bond Framework Evaluation: This evaluates the extent to which the funds procured through green finance are appropriated for green projects as defined by
JCR and the degree to which the management, operation and transparency of the green finance are ensured. Evaluations based on a 5-point scale are given from top tobottom using the Green1 (F), Green2 (F), Green3 (F), Green4 (F), and Green5 (F) symbols.

■ Status of Registration as an External Evaluator of Green Finance・ Registered as an External Reviewer of Green Bonds by the Ministry of the Environment
・ ICMA (registered as an observer with the Institute of International Capital Markets)■ Status of registration as a credit rating agency, etc.
・ Credit Rating Agency: the Commissioner of the Financial Services Agency (Rating) No.1
・ EU Certified Credit Rating Agency
・ NRSRO: JCR has registered with the following four of the five credit rating classes of the U.S. Securities and Exchange Commission's Nationally Recognized Statistical
Rating Organization (NRSRO): (1) financial institutions, broker-dealers, (2) insurance companies, (3) general business corporations and (4) governments andmunicipalities. If the disclosure is subject to Section 17g-7 (a) of the Securities and Exchange Commission Rule, such disclosures are attached to the news releases
appearing on the JCR website (https://www.jcr.co.jp/en/).

■For further information, contact

Information Service Dept. TEL: 03-3544-7013 FAX: 03-3544-7026

Japan Credit Rating Agency, Ltd.
Jiji Press Building, 5-15-8 Ginza, Chuo-ku, Tokyo 104-0061, Japan
Tel. +81 3 3544 7013, Fax. +81 3 3544 7026

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

23/23
Copyright © Japan Credit Rating Agency, Ltd. All Rights Reserved.