Keihanshin Building Co., Ltd.
Sustainability-Linked Financing Framework
October 2023

Table of Contents
1 Introduction ..................................................................................................................... 1
1.1 Overview of Keihanshin Building .................................................................................. 1
1.2 Management Policy ..................................................................................................... 2
1.3 Long-Term Business Plan ........................................................................................... 3
1.4 Keihanshin Building’s Sustainability Initiatives ........................................................... 4■ Sustainability Promotion System ..................................................................................... 4■ Materiality ........................................................................................................................ 5■ Materiality Indicators and Targets .................................................................................... 52 Sustainability-Linked Financing Framework .................................................................... 82.1 Selection of KPIs .......................................................................................................... 82.2 Setting of Sustainability Performance Targets (SPTs).................................................. 9
2.3 Characteristics of Bonds and Loans............................................................................. 92.4 Reporting .................................................................................................................... 10
2.5 Verification ...................................................................................................................11

1 Introduction
Providing Valuable Commercial Space toConnect People, Communities, and the Future
Keihanshin Building Co., Ltd. (hereafter, “the Company”) has formulated a SustainabilityLinked Financing Framework (hereafter, “the Framework”). Through the execution offinance (Sustainability-Linked Bonds or Sustainability-Linked Loans) based on theFramework, we will promote strongly our Sustainability Policy and one of our materiality,“Strengthening of resilience to climate change.”

1.1 Overview of Keihanshin Building
Our group (hereafter "the Group”) consists of Keihanshin Building Co., Ltd. and one
consolidated subsidiary. Our main business is real estate leasing, and we also engage inrelated businesses such as building management.
Real estate leasing business: In addition to directly leasing buildings for operational use,including office buildings, datacenter buildings, WINS buildings (facilities that sell off-track
betting tickets), commercial buildings, logistics warehouses, and other properties, we alsolease buildings from building owner and sublet them. Building management, covering themaintenance and management of buildings, machinery and equipment, and cleaning, isalso included in this business segment.

11.2 Management Policy
Based on the Corporate Philosophy and Sustainability Policy set out below, the Company
aims to contribute to the realization of a sustainable society by implementing initiatives toresolve social issues through our corporate activities, and to achieve sustainable growth asa company.
Corporate
Philosophy

Code ofConduct

Our Corporate Philosophy and Code of Conduct
1. To provide valuable commercial space to customers so as to contributeto the community through the advancement of customers' and ourbusinesses.
2. To earn and value our customers', shareholders' and employees' trustby operating our company according to quality-first values.
3. To act efficiently, evolve, and create a vital corporate atmosphere.
1. The customer comes first
We will earn our customers' trust, meet their needs and provide them withsafe, high-quality environments and services.
2. Practicing compliance
We will always adhere strictly to laws, ordinances and regulations, and act
with a strong social conscience rooted in high ethical standards.
In addition, we will conduct business fairly, transparently and appropriately,
and maintain healthy and normal relationships with political andadministrative persons and organizations.
We will have nothing to do with anti-social forces and organizations andresolutely deal with them.
3. Social contribution
We will establish a good relationship with the community, and actively
engage in social contribution activities as a good citizen.
4. Disclosure of information
We will communicate openly not only with our shareholders, but also withthe community widely, and disclose corporate information timely, accurately,and properly.
5. Protecting the environment
We will maintain our awareness that environmental protection is an
important facet of business management, and will serve to be proactive inprotecting the natural environment in a positive manner.
6. Respect for the individual
We will maintain our safe and comfortable workplaces in a manner thatinspires employees in their work and encourages their self-actualization;
and we will appropriately respect each employee's individuality andpersonality.

Sustainability Policy
We will actively address environmental issues and aim to balance between a richenvironment in the future and business activities.
1. Responding to climate change
2. Sustainable use of resources and contribution to recycle-oriented society
We will aim for the continuous development of society as a whole through collaboration
with our stakeholders.
3. Contribution to customers4. Dialogue with shareholders and investors
5. Collaboration with partner companies
6. Contribution to local communities27. Initiatives for employees (Well-being initiatives)
We will continue to be highly transparent through maintaining compliance and disclosureof information.
8. Supervision of initiatives for sustainable management
9. Maintaining compliance
10. Disclosure and communication of ESG-related information

1.3 Long-Term Business Plan
In order to achieve greater profit growth and realize higher asset and capital efficiency, theCompany reviewed the previous Medium-term Business Plan and formulated a new LongTerm Business Plan targeted at the 10-year period from FY2024/3 to FY2033/3, aiming for
further development of foundations and systems to respond to changes in the external
environment surrounding the Company, together with the belief that radical reforms arenecessary for establishing a foundation for growth focusing on the 100th anniversary of theCompany’s founding in 2048 under the new system as well as for sustainable management
promotion with an awareness of ESG.
(Overview of Long-Term Business Plan)
Target10 years from FY2024/3 to FY2033/3
period
1. Aim to continuously enhance corporate value by realizing sustainable
Basicmanagement
2. Assess changes in the investment environment and expand our business
policysize and create new profit models through increasing the portfolio
Corporate
A company that will continue to contribute to a sustainable society with eachvision in 10 and every employee growing through inventiveness and challenges andyears’ time providing valuable commercial space that meet the needs of the times
Among the priority measures set out in this Plan, we have positioned the following twopoints as issues that we should focus on addressing: strategy of investing in newbusinesses toward the next growth, and sustainability strategy with an awareness of ESG.
We will accelerate efforts to that end. The following sets out the details on the two issues
that we should focus on address.
(1) Strategy of investing in new businesses toward the next growth（a）Acquisition of office buildings, logistics warehouses, and urban-type commercialbuildings with a focus on the Tokyo metropolitan area.
（b）Acquisition of land for the development of new datacenter buildings to cope with therecent growth in data communication volume（c）Diversification of investment methods, such as initiatives toward flow businesses(revolving-type investment business, equity investment)（d）Further diversification of asset types (residences for lease aimed at corporations,healthcare facilities, etc.)（e）Overseas investments that include alliances with other companies3(2) Sustainability strategy with an awareness of ESG（a）Proactive response to climate change issues through efforts to implement TCFD
recommendations（b）Decisions on issues to be addressed and KPIs that are linked to our materiality(important issues), and their progress management (for example, setting GHG
emission reduction targets, setting targets on the ratio of area of properties with
Green Building Certification, etc.)（c）Strengthening of initiatives toward human capital management (human resource
development, securing diverse talents, human resource composition that supports
the Long-Term Business Plan, development of work environment, promotion ofDigital Transformation, etc.)
While working on the abovementioned issues that should be focused on, we will continue tofulfill the mandate of our stakeholders by steadily promoting the Long-Term Business Plan
while remain agile in responding to changes in the external environment and the real estatemarket conditions going forward.

1.4 Keihanshin Building’s Sustainability Initiatives■ Sustainability Promotion System
The Company has established Rules on Promoting Sustainability based on theSustainability Policy established by the Board of Directors, and we have put in place asystem for promoting sustainability in accordance with these Rules.
In the internal system, the President serves as the Chief Sustainability Officer, who is
the highest-ranking officer in the Sustainability Promotion System, and the Executive
Officer responsible for Administration serves as the Sustainability Executive in charge ofthe execution of individual measures. We have established a Sustainability Committee
whose purpose is to review and formulate various policies, targets, and measures, aswell as the Sustainability Promotion Group whose purpose is to establish systems andimplement various measures. The Sustainability Committee is chaired by the President
and comprises of committee members who are members of the Sustainability Promotion
Group as well as members appointed by each department.

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■ Materiality
We consider it important to evaluate the impact of sustainability initiatives on theCompany’s business activities, in order of the degree of impact starting with thesustainability issues considered to be of relatively high importance, and to incorporate
these into our business strategies.
Based on this stance, we have identified the issues that should be addressed with highpriority, from among the issues of high importance, as our materiality, in order tocontinuously enhance the Company’s corporate value and realize a sustainable society.

■ Materiality Indicators and Targets
We have set KPIs linked to each materiality as our indicators and targets, in order tomanage the progress of sustainability-related initiatives, based on deliberations andreviews conducted within the Sustainability Committee.
5Among our materiality, we recognize “strengthening of resilience to climate change” and“improvement of human capital” alongside “diversity and inclusion” to be of especial
importance. Within this framework, we have adopted “Reduce Scope 1 and 2 GHG
emissions by 46% by FY2031/3 (compared to FY2020/3)” as our target KPI and SPT for“strengthening of resilience to climate change.” By implementing Sustainability-Linked
Financing based on this framework, we aim to commit more strongly to GHG emission
reduction targets that contribute to “strengthening of resilience to climate change.”(1) Strengthening of resilience to climate change
Target: Reduce Scope 1 and 2 GHG emissions by 46% by FY2031/3 (compared toFY2020/3)

KPI 1: Reduce per-unit energy consumption by 10% (compared to FY2020/3) by
FY2031/3 through energy-saving efforts.
KPI 2: Use renewable energy
Starting in April 2023, all electricity used in six office buildings (four in Osaka, two inTokyo) has been switched to electricity derived from renewable energy with added
environmental value.
KPI 3: Raise the ratio of the area of properties with the Green Building Certification to50% or more by FY2031/3 and acquire the Green Building Certification for all
newly constructed properties in the future.

6Ratio of the area of properties with Green
Building Certification
50% or more

38.5%
20.7%
0.0%
2020/36.9%

2021/32022/32023/32031/3(Target)(2) Improvement of human capital, diversity and inclusion(a) Percentage of females among new graduates recruited (five-year average)
Target: 50%
With regard to the employment of experienced mid-career human resources andseniors, the ratio is currently skewed due to the historical background and otherinfluencing factors. However, we have adopted the percentage of females among new
graduates recruited as an indicator for driving the diversification of human resources inthe employment of fresh graduates, who will carry the future of the Company, andcreating an environment where all employees, regardless of gender, can play an activerole according to their abilities.
（b）Paid leave utilization rate
Target: 70% or higher
We have adopted paid leave utilization rate as an indicator for promoting the creation ofa safe and comfortable workplace environment where every employee can reach theirfull potential through the establishment of mechanisms and systems that enable diverse
work styles with consideration for work-life balance.
（c）Investments related to human resource development
Target: 100,000 yen/person
Based on the stance that the Company’s growth is the sum of the growth of eachindividual employee, we have reviewed our internal systems, such as theimplementation of job grade-based training, with a view to carrying out human resource
development that is tailored to the personality, characteristics, and values of eachemployee. We plan to continue providing opportunities for growth.

72 Sustainability-Linked Financing Framework
Under the Framework, the Company has established the following as our five coreelements and obtained a second opinion on their suitability from Rating and Investment
Information, Inc. (R&I). The five core elements are aligned with provisions set out in thefollowing guidelines: Sustainability-Linked Bond Principles (SLBP) 2023 of the International
Capital Market Association (ICMA), Sustainability-Linked Loan Principles (SLLP) 2023
established by the Loan Market Association (LMA), the Loan Syndications and Trading
Association (LSTA), and the Asia Pacific Loan Market Association (APLMA), and the Green
Bond and Sustainability-Linked Bond Guidelines and Green Loan and Sustainability-Linked
Loan Guidelines 2022 established by the Ministry of the Environment of Japan.
1.
2.
3.
4.
5.

Selection of KPIs
Setting of Sustainability Performance Targets (SPTs)
Characteristics of bonds and loans
Reporting
Verification

2.1 Selection of KPIs
The Company has selected the following KPI with the aim of more strongly promoting“strengthening of resilience to climate change,” which we have positioned as a materialityof high importance. We will adopt the following KPI each time we implement SustainabilityLinked Financing.
ItemKPIKPIReduce Scope 1 and 2 GHG emissions(compared to fiscal year 2019)

TargetBusiness sites for which theCompany holds energy
management authority

The KPI results for the past three years are as follows.
FY2020
FY2021
FY2022
5.2%-13.6%-6.4%
The increases in FY2021 and FY2022 were due to the completion of the construction of theToranomon Building and the OBP Building.

82.2 Setting of Sustainability Performance Targets (SPTs)
The Sustainability-Linked Financing implemented based on the Framework use thefollowing Sustainability Performance Targets (SPTs). SPT values are adopted from thefollowing targets for each fiscal year, corresponding to the period of the SustainabilityLinked Financing, and are specified in statutory disclosures such as amended shelfregistration statements and shelf registration supplements related to the issuance ofSustainability-Linked Bonds or Sustainability-Linked Loan contracts, etc. (hereafter,"statutory disclosure documents or loan contracts, etc.") based on the Framework.
SPTs: Reduction rates of Scope 1, 2 GHG emissions (compared to FY2019)
FY2026FY2027
FY2028FY2029
37%
39%
41%
43%

FY203046%

The FY2030 GHG emission reduction target has obtained SBT certification for consistency
with the level of “below 1.5℃.”

2.3 Characteristics of Bonds and Loans
Depending on the status of achievement of SPTs, the characteristics of the SustainabilityLinked Bonds or Loans change, and may carry one or more of the following characteristics(1) to (3). Details of the characteristics, etc. are specified in the abovementioned statutory
disclosure documents or loan contracts, etc.
Characteristic (1): Donations
If the respective SPTs are not achieved on their evaluation date, an amount corresponding
to the percentage of the amount procured through Sustainability-Linked Financing,
specified in the aforementioned statutory disclosure documents or loan contracts, etc., will
be donated to public interest incorporated associations, public interest incorporated
foundations, international organizations, local government-certified NPOs, localgovernments, or other similar organizations that engage in environmental conservation
activities, by the redemption or repayment date. The target donation recipients areorganizations that conduct activities aligned with the benefits that the environment andsociety can reap upon the achievement of the SPTs, such as decarbonization, upon athorough examination of the reasons for non-achievement of the SPTs. The selection ofdonation recipients is determined through the necessary institutional decision-makingprocesses.
Characteristic (2): Purchase of emission credits
If the respective SPTs are not achieved on their evaluation date, emission credits (credits orcertificates with the value of the GHG reduction*1) with a value corresponding to thepercentage of the amount procured through Sustainability-Linked Financing, specified in
the aforementioned statutory disclosure documents or loan contracts, etc., will bepurchased by the redemption or repayment date.

*1 The types of emission credits to be purchased are assumed to include J-Credits, renewable energy certificates, etc.
The actual names, quantities, and costs of the purchased emission credits will be disclosed on the website. In the eventthat it becomes impossible to purchase emission credits due to force majeure circumstances, an amount equivalent to
the planned expenditure for emission credits will be donated to the entities indicated in Characteristic (1).

Characteristic (3): Raising or lowering of interest rate
If the respective SPTs are not achieved on their evaluation date, interest rate will be raised
to the annual rate specified in the aforementioned statutory disclosure documents or loancontracts, etc., starting from the day after the interest payment date immediately following
the evaluation date, until the redemption or repayment date, or until the last day of the9

interest calculation period that the next evaluation date falls under.
Alternatively, if the respective SPTs are achieved by the evaluation date, interest rate will
be lowered to the annual rate specified in the aforementioned statutory disclosure
documents or loan contracts, etc., starting from the day after the interest payment date
immediately following the evaluation date, until the redemption or repayment date, or until
the last day of the interest calculation period that the next evaluation date falls under.
In the event that any circumstances arise that prevent the confirmation of the achievement
status of SPTs on the evaluation date, the SPTs will be deemed as unachieved. Even if theCompany changes the SPTs after the implementation of Sustainability-Linked Financing,
the SPTs of Sustainability-Linked Financing that has already been implemented will not bechanged.

2.4 Reporting
During the period until the redemption or repayment of the Sustainability-Linked Financing
implemented based on the Framework, the Company discloses annually the achievement
status of the SPTs for the KPIs and set by the Company, with the inclusion of the following
details on our website or in public documents.
Item

Reporting details

KPI results

KPI results as of the last day of each fiscal year

Updates toimportant
information
Details of emission
credit purchases ordonations

Information that could potentially have a significant impact on theachievement of SPTs (setting/updating of sustainability
strategies, etc.)
If the Company purchases emission credits based on thecharacteristics of bonds or loans, the name, transfer date, andamount of emission credits purchased; if the Company makes adonation, the name of the eligible beneficiary, reason for
selection, amount of donation, and scheduled timing of donation.

Furthermore, in the event of circumstances that cannot be predicted at the time offormulating the Framework, and which may have a significant impact on the Framework(such as M&A, changes in regulations in various countries, or abnormal weatherconditions), making it necessary to change the definition and scope of KPIs, setting ofSPTs, assumptions, or other details, the Company plans to disclose the details of thechanges in a timely manner, including the reasons for the changes and the recalculation
method.

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2.5 Verification
With regard to KPI results from FY2024 and beyond, the acquisition of assurance reports
from an independent third-party and disclosure of information on our website or publicmaterials shall be carried out annually from FY2025.
We obtain verification reports from an independent third-party for the achievement status ofSPTs for KPIs. The verification reports obtained are disclosed on our website or publicmaterials.
(End)

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