INPEX Corporation Green Finance Pre-Funding Verification Report Revision 1.0

VERIFICATION REPORTINPEX CORPORATIONGREEN FINANCE PRE-FUNDING VERIFICATIONREPORT

Prepared by: DNV Business Assurance Japan K. K.
Location: Kobe, Japan
Date: 24 March 2023
Ref. Nr.: PRJN-252709-2021-AST-JPN-1-R.2

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INPEX Corporation Green Finance Pre-Funding Verification Report Revision 1.0

Table of Contents
I Introduction

5

Ⅱ Scope and Objectives

11

Ⅲ Responsibilities of the Management of INPEX and DNV

11Ⅳ Basis of DNV’s opinion

12

Ⅴ Work Undertaken

13

Ⅵ Findings and DNV’s opinion

14

Schedule-1. Nominated Green Projects

19

Schedule-3. CBS v3.0 Requirements

24

Revision history
Revision
numberRev.0

Issue Date
(dd/mm/yyyy)
06/08/2021

Rev.1.024/03/2023

Remarks
First edition
Revised reflecting the changes associated with the update from the
INPEX Green Bond Framework to the INPEX Green Finance
Framework(Major changes)
Revised and Added information about “Long-term Strategy andMedium-term Business Plan (INPEX Vision @2022) ” andSection I ⅰ＆ⅱ.
Added information about Green Loans standards

Disclaimer
Our assessment relies on the premise that the data and information provided by the Fundraiser to us as part of our review procedures have been provided in goodfaith. Because of the selected nature (sampling) and other inherent limitation of both procedures and systems of internal control, there remains the unavoidable
risk that errors or irregularities, possibly significant, may not have been detected. Limited depth of evidence gathering including inquiry and analytical procedures
and limited sampling at lower levels in the organisation were applied as per scope of work. DNV expressly disclaims any liability or co-responsibility for any
decision a person or an entity may make based on 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 maintain independence 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 ordata included in the Framework except for this Statement. DNV maintains complete impartiality towards stakeholders interviewed during the assessment process.

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

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INPEX Corporation Green Finance Pre-Funding Verification Report Revision 1.0

Executive Summary
INPEX Corporation (hereinafter “INPEX”）formulated the Green Bond Framework in
September 2021 and the “Long-term Strategy and Medium-term Business Plan (INPEX
Vision @2022)” in February 2022 to lay out a more concrete roadmap and set of goals fordriving energy transformation (EX) forward while maintaining its commitment to the stablesupply of energy. Based on these and with the intention of further diversifying financing
methods in the future, INPEX has developed a green finance framework which includes
green bonds and green loans by revising the above Green Bond Framework. INPEX plans tocontinue issuing green bonds and to execute green loans in order to raise funds for projects
related to the development, construction, operation and refurbishment of renewable energy.
(Hereinafter, green bonds and green loans are collectively referred to as “Green Finance”.)
Based on the commission by INPEX, DNV Business Assurance Japan K.K. (hereinafter “DNV”)
has conducted verification that the Green Finance Framework developed by INPEX(hereinafter “Framework”) and the planned Green Finance meet the Climate Bonds Standard
v3.0 (hereinafter “CBS”) defined by Climate Bonds Initiative (hereinafter “CBI”). As theresult of verification based on the limited assurance procedures conducted by DNV, nothing
has come to our attention that cause us to believe that the green bond is not, in all material
respects, in compliance with the requirements of the CBS and the associated sector-specificeligibility criteria. The following is an overview of the assessment results for the four
elements indicated in the Green Bond Principles 2021 (hereinafter “GBP”), the Green Loan
Principles (ICMA, 2021, hereinafter “GLP”) and Green Bond Guidelines 2022 (the Ministry of
the Environment, 2022, hereinafter “GBGLs”), and the Green Loan Guidelines 2022 (theMinistry of the Environment, 2022, hereinafter “GLGLs”) which are also the core elements of
the CBS.
1. Use of Proceeds:
The Framework defines eligible criteria for the use of proceeds as “renewable energy
projects”. This is in line with the eligible Green Project categories described in the GBP
and GLP. Specifically, the proceeds are planned to be used for financing (new investment)
and refinancing in businesses related to the development, construction, operation andrefurbishment of renewable energy of wind, geothermal and solar. These projects are
expected to have clear environmental benefits and contribute to the “Long-term Strategy
and Medium-term Business Plan (INPEX Vision @2022)” newly formulated by INPEX
towards the realisation of a net zero carbon society in 2050 and the UN “Sustainable
Development Goals”.
2. Process for Project Evaluation and Selection:
INPEX has formulated the “Long-term Strategy and Medium-term Business Plan (INPEX
Vision @2022)” to lay out more concrete roadmap and set of goals towards the realisationof a net zero carbon society in 2050, and has set goals for environmental sustainability.
Regarding the project evaluation and selection, the Finance & Accounting Division selects
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INPEX Corporation Green Finance Pre-Funding Verification Report Revision 1.0

an appropriate internal decision process in consultation with headquarter of renewableenergy or new field business and Corporate Strategy & Planning Division. These processes
are aligned with GBP and GLP.
3. Management of Proceeds:
The net proceeds are managed by the Finance & Accounting Division with the internal
accounting system that can track them at any time. The net proceeds are managed on
the internal accounting system so that the net proceeds do not exceed the total amountof new investment and refinancing of the selected project. Unallocated proceeds will be
managed in cash or cash equivalents etc., until they are allocated to the project. The
allocation status is regularly reported to the director in charge of Finance & Accounting.
These are aligned with the GBP and GLP.
4. Reporting:
INPEX plans to report on the allocation status of the proceeds in its annual Integrated
Report, Sustainability Report or website, until the proceeds are fully allocated. This
includes the balance of the unallocated amount of the proceeds, allocated amount of theproceeds, and the approximate amount (or share) of the proceeds that have been used
for refinancing. In addition, as environmental benefits, INPEX plans to disclose indicators
related to annual CO2 emission reductions and installed capacity of renewable energy.
These are aligned with the GBP and GLP.
In addition, INPEX plans to engage DNV in the post-funding verification of the Green
Finance based on CBS requirements.

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I Introduction
i. About INPEX and environmental initiatives
As a pioneer in energy transformation (EX), INPEX will seek to provide a stable supply of
diverse and clean energy sources including oil and natural gas, hydrogen and renewableenergy. Through these business activities, the company will promote initiatives towards
the realisation of a net zero carbon society and aim to increase the corporate value ofthe INPEX Group as a whole.
1) Climate change response goals
INPEX has set the following three goals to contribute to the realisation of a net zerocarbon society in accordance with the objectives of the Paris Agreement.

2) “Long-term Strategy and Medium-term Business Plan (INPEX Vision @2022)”
Based on its basic policy for responses to climate change, INPEX has developed aconcrete strategy for the next 10 years as “Long-term Strategy” on how to realise
energy transformation by 2030. In addition, INPEX has also formulated a specific plan tobe implemented in the three-year period from 2022 until 2024 as the “Medium-term
Business Plan”.

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INPEX Corporation Green Finance Pre-Funding Verification Report Revision 1.0①

Basic management policy towards a net zero carbon society by 2050

As a pioneer in energy transformation (EX), INPEX will contribute to the creation of abrighter future for sustainable society by providing a stable supply of diverse and clean
energy sources including oil and natural gas, hydrogen and renewable energy.

Five net zero businesses: 1. Hydrogen/ammonia, 2. Reduce CO₂ emissions from oil &gas operations (CCUS*), 3. Renewable energy, 4. Carbon recycling/new business, 5.
Forest conservation.
※ Carbon dioxide Capture, Utilisation and Storage

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INPEX Corporation Green Finance Pre-Funding Verification Report Revision 1.0② Vision for around 2030
INPEX aims to transform their “net zero carbon” concept from ideal to reality by 2030
with an eye on a net zero carbon society in 2050. Based on the recognition thatconventional oil and natural gas will remain indispensable energy sources forsocioeconomic activities, INPEX will strive to make these operations cleaner whileproviding a stable supply. At the same time, INPEX will proactively work on the belowmentioned five net zero businesses and expand them into a balanced business portfoliowith sufficient profitability looking ahead towards 2050. The specific initiatives in the five
net zero businesses are shown below.

Initiative
Develop hydrogen /ammonia businessInitiative Outline- Commercialise three or more projects by around 2030 and aim
to produce and supply 100 thousand tons or more ofhydrogen/ammonia per year

Reduce CO₂ emissions from

- Aim to become a leading company in the CCUS business by

upstream operations

targeting an annual CO₂ injection volume of 2.5 million tons or(promotion of CCUS)

more in around 2030 and promoting technical development
and commercialisation

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INPEX Corporation Green Finance Pre-Funding Verification Report Revision 1.0

Enhance and emphasise
renewable energy initiatives- Aim to secure 1-2 GW of installed capacity, mainly in theoffshore wind and geothermal power generation business- Become a key player by accelerating business expansion using
assets acquired through M&A and other means as a platform

Promote carbon recycling- Promote the adoption of methanation in society and aim toand cultivate new businesssupply about 60 thousand tons (equivalent to approx. 200

opportunities

thousand households) of synthetic methane per year through
INPEX’s natural gas trunk pipeline network by 2030 whilepursuing further development

Promote forest- Strengthen and expand projects aimed at CO₂ absorption

conservation

through forest conservation, from supportive measures toproject participation

In addition to the efforts to achieve the goals listed above, INPEX has establishedspecific initiatives in the oil and natural gas business, making full use of the technologies,
assets and human resources it has nurtured through the development of oil and natural
gas as their strengths.
①

Selection and concentration of core business areas: Concentrate resources suchas capital and human resources in core business areas, etc.

②

Implementation of shift to natural gas: Raise the gas investment ratio, etc.

③

Making the business more resilient and cleaner: Promote the digitalisation ofoperations to achieve higher productivity and power saving, achieve zero routine
flaring by 2030, etc.

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INPEX Corporation Green Finance Pre-Funding Verification Report Revision 1.0

ii. About Green Finance Framework
INPEX has updated the Green Finance Framework (hereinafter “Framework”) based on
their “Long-term Strategy and Medium-term Business Plan (INPEX Vision @2022)”.
Utilizing this Framework, INPEX plans to execute the Green Finance to raise funds torealise projects that are expected to have environmental benefits. The proceeds will beallocated to the Green Projects in accordance with the following eligible criteria:•

Renewable energy(Business related to the development, construction, operation andrefurbishment of renewable energy of wind, geothermal and solar.)

In order to achieve the sustainable development, production and supply of energy,
INPEX engages in sustainability management focusing on six sustainability material
issues, and proactively address sustainability issues through its businesses and value
chains. INPEX identified six themes among the seven core social responsibility subjects
in ISO 26000 as priority themes of high importance for INPEX and its stakeholders.
Six Sustainability Material Issues of INPEX Group-

GovernanceCompliance-

Climate Change Response-

HSE
Local Communities
Employees

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The table below summarises the material issues related to “climate change response”
and their relevance to the SDGs.
INPEX’s business activities through the Framework are related to “climate change
response”, and in particular, are initiatives* that directly and indirectly contribute to Goal
7, Goal 9, Goal 13 and Goal 15.
INPEX Group’s Material Issues on Climate Change Response and Contributions to
SDGs
Material Issues on
Climate Change Response
Pursue climate change goals anddisclosure according to TCFD
recommendations
Cleaner oil & gas business and transition
to natural gas

Hydrogen & ammonia
Advancing
CCUS
five net
Renewable energy
zero
Carbon recycling & New
businesses
business- Forest Conservation-

SDGs

Goal 7

AFFORDABLE AND
CLEAN ENERGY

Goal 9INDUSRY,INNOVATION AND
INFRASTRUCTURE

Goal 13

CLIMATE ACTION

Goal 15LIFE ON LAND＊The relevance to SDGs is complementary to the funding through the Green Finance, with reference
to Green, Social and Sustainability Bonds: A High-Level Mapping to the Sustainable Development
Goals established by ICMA, which sets out the Green Bond Principles. It is not intended to be directly
related to the funding purposes.

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Ⅱ Scope and Objectives
In March 2023, INPEX commissioned DNV Business Assurance Japan K.K. (hereinafter “DNV”
or “we”) to conduct verification for its green bond eligibility for pre-funding requirements
against Climate bond Standards version 3.0 (hereinafter “CBS”) developed by Climate Bonds
Initiative (hereinafter “CBI”).
As an approved verifier, DNV’s purpose of the Green Finance pre-funding verification is toverify that the INPEX’s Green Finance and the nominated Green Projects are aligned with
CBS v3.0 and the following sector eligibility criteria (onshore wind power, offshore wind
power of marine renewable energy, geothermal power).
DNV has conducted verification considering that CBS is fully aligned with the Green Bond
Principles 2021 (hereinafter “GBP”), the Green Loan Principles 2021 (hereinafter, “GLP”), theGreen Bond Guidelines 2022 (hereinafter “GBGLs”) and the Green Loan Guidelines 2022
(hereinafter “GLGLs”).
•(Onshore wind power) Wind Sector Eligibility Criteria of the Climate Bonds Standard(Version 1.1)•

(Offshore wind power of marine renewable energy) The Marine Renewable Energy
Sector Eligibility Criteria of the Climate Bonds Standard (July 2020)•(Geothermal power) Geothermal Energy and the Climate Bond Standard (Version
1.0)

DNV refers to GBGLs and GLGLs in terms of conformance with relevant criteria, apart fromthe Green Finance pre-funding verification aimed at conformance with CBS and related
sector eligibility criteria.
DNV holds no other engagements with INPEX, including its direct shareholders, for which weforesee conflicts of interest to carry out the Scope of Work as defined in the agreementagreed with INPEX. In this report, no assurance is provided regarding the financial
performance of the Green Finance, the value of any investments in the Green Finance, or the
long-term environmental benefits of the transaction.

Ⅲ Responsibilities of the Management of INPEX and DNV
The management of INPEX has provided the information and data used by DNV during thedelivery of this review. DNV’s statement represents an independent opinion and is intended
to inform the management of INPEX and other interested stakeholders in the Green Financeas to whether the established criteria have been met, based on the information provided tous. In our work we have relied on the information and the facts presented to us by INPEX.
DNV is not responsible for any aspect of the nominated projects and assets referred to inthis 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

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management of INPEX and used as a basis for this assessment were not correct orcomplete.

Ⅳ Basis of DNV’s opinion
To provide as much flexibility as possible for INPEX, DNV has applied our green financeassessment methodologies, which incorporates the requirements of the GBP, GLP, CBS,
GBGLs and GLGLs, to create the Fundraiser-specific Green Finance Eligibility Assessment
Protocol (hereinafter “DNV’s Protocol”). The DNV’s Protocol has the capacity for potential
application to green finance under the GBP, GLP, CBS, GBGLs and GLGLs. Schedule-2 of thisreport outlines the DNV’s Protocol and Findings.
DNV’s 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 finance should“enable capital-raising and investment for new and existing projects with environmental andsocial benefits”.
As per DNV’s Protocol, the criteria against which the Framework has been reviewed aregrouped under the four Principles:•

Principle One: Use of Proceeds
The Use of Proceeds criteria are guided by the requirement that the fundraiser ofGreen Finance must use the proceeds to eligible Green Projects. The eligible projects
should provide clear environmental benefits.

•

Principle Two: Process for Project Evaluation and Selection
The Project Evaluation and Selection criteria are guided by the requirements that thefundraiser of a Green Finance should outline the process it follows when determining
eligibility of an investment using Green Finance proceeds and outline how it considers
the impact of the projects on its objectives.

•

Principle Three: Management of Proceeds
The Management of Proceeds criteria are guided by the requirements that a Green
Finance should be tracked within the fundraising organisation, that separate portfolios
should be created when necessary and that a declaration of how unallocated funds
will be handled should be made.

•Principle Four: Reporting
The Reporting criteria are guided by the recommendation that at least 12he reportingto the bond investors and loan borrowers should be made of the use of bondproceeds and that quantitative and/or qualitative and appropriate performanceindicators should be used, where feasible.

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

Creation of INPEX-specific DNV Protocol;•

Assessment of evidential documents provided by INPEX before the issuance of the
BOND, and supplemental assessment with desk review from a higher perspective;•

Interviews with key personnel of INPEX, and review of the relevant documentation;
and•Reporting of findings against each element of the eligibility criteria

ii. Post-Funding Verification（＊it is not included in this report）•

Assessment of evidential documents provided by INPEX after the funding through theGreen Finance, and supplemental assessment by the comprehensive desk review
from a higher perspective;•

Interviews with key personnel of INPEX, and review of the relevant documentation;•

On-site visit and inspection, if necessary;•

Review of the nominated projects and assets at the time of the post-funding
verification, including updating the list of them in Schedule-1; and•Reporting of findings against each element of the eligibility criteria at the post-funding
verification

These have been used as direct sources of evidence for the verification conclusions, and arealso further checked, as considered appropriate, through interviews with key personnel.

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Ⅵ Findings and DNV’s opinion
DNV conducted the pre-funding verification of the Green Finance in accordance with
ISAE3000 (Assurance engagements other than audits or review of historical financial
information). The verification included: i) checking whether the provisions of the CBS wereconsistently and appropriately applied and ii) the collection of evidence supporting theverification.
DNV’s verification approach draws on an understanding of the risks associated with
conforming to the CBS and the controls in place to mitigate these. DNV planned andperformed the verification by obtaining evidence and other information and explanations thatDNV considers necessary to give limited assurance that the Green Finance meet therequirements of the CBS. In addition, since the conformity to GBGLs and GLGLs of the Green
Finance can be related to the conformity to CBS, the verification results are summarised in
one form as described below.
The Findings and DNV’s opinion are as follows:

Principle One: Use of Proceeds
DNV confirmed that the net proceeds are planned to be allocated to projects related tothe development, construction, operation and renovation of renewable energy such as
wind power and geothermal power. DNV confirmed that the nominated Green Projects
at the time of pre-issuance verification included onshore/offshore wind power
generation and geothermal power generation, and that the proceeds would beallocated to one or more projects as new investment and refinancing.
The nominated Green Projects are listed in Schedule-1 “List of Nominated Green
Projects” in this report.
For onshore and offshore wind power generation projects (including domestic andoverseas projects) that are nominated, wind condition surveys and environmental
impact assessment processes are underway in accordance with the domestic
regulations of the country where the projects are located and INPEX’s internal
processes. Their progress is disclosed as appropriate by business operators and local
governments, where applicable.
Regarding geothermal power generation projects, we confirmed that continuous
monitoring is being carried out based on the laws and regulations of the country where
the project is located and the guideline standards regarding environmental
consideration adopted by the lender, in accordance with internal regulations, andconfirmed that no significant concerns have been raised to date.

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DNV confirmed that these projects are aligned with the relevant sector eligibility criteriaof CBS as below.
• (Onshore wind power) Wind Sector Eligibility Criteria of the Climate Bonds
Standard (Version 1.1)
• (Offshore wind power) The Marine Renewable Energy Sector Eligibility Criteria of
the Climate Bonds Standard (July 2020)• (Geothermal power) Geothermal Energy and the Climate Bond Standard (Version
1.0)

All net proceeds are planned to be used to newly invest and refinance Green Projects.
These projects are expected to bring clear environmental benefits as projects to reduce
CO2 emissions and are expected to contribute to the achievement of environmental
sustainability goals set by INPEX in the “Long-term Strategy and Medium-term Business
Plan (INPEX Vision @2022)”.
Through the information from INPEX, it was confirmed that the nominated Green
Projects are aligned with the eligible Green Project categories specified in CBS/GBP/GLP.
We also confirmed the compliance with GBGLs and GLGLs.

Principle Two: Process for Project Evaluation and Selection
INPEX has laid out a roadmap and set of goals towards the realisation of a net zerocarbon society in 2050 in the “Long-term Strategy and Medium-term Business Plan
(INPEX Vision @2022)”. Through the review, DNV confirmed that the nominated Green
Projects listed in Schedule-1 are aligned with the “Long-term Strategy and Medium-term
Business Plan (INPEX Vision @2022)”.
It was confirmed through the verification activities that the Finance & Accounting
Division selects candidate projects based on the eligible criteria, and the projects areapproved through an appropriate internal decision process in consultation with the
Renewable Energy & New Business Division and the Corporate Strategy & Planning
Division. INPEX considers CBS requirements when evaluating and selecting projects.
DNV confirmed through verification activities that the evaluation and selection of Green
Projects are approved through the appropriate internal determination process. It was
confirmed that these processes are aligned with the requirements of CBS, GBP, GLP,
GBGLs and GLGLs.

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Principle Three: Management of Proceeds
DNV has reviewed how INPEX can track and manage the net proceeds during the period
from funding to redemption or repayment. It was confirmed that the Finance &Accounting Division will manage the allocation status for each project based on INPEX’s
internal management procedure.
DNV reviewed plans for how INPEX will track and manage the allocation of proceeds after
the funding through the Green Finance. The details are as follows:

•

•

•

•

For Management of proceeds from the Green Finance, unallocated proceeds aremanaged as cash or cash equivalents etc., until they are allocated to the projects.
The Finance & Accounting Division registers and manages the allocation status in
the internal management system for each eligible Green Project for fundprocurement management.
We have confirmed that the Finance & Accounting Division will manage theallocation status for each project, and also confirmed that the balance of
unallocated amount was confirmed at least quarterly, and that the total amount ofeligible projects was managed so that it would not fall below the total amount of
the proceeds from the Green Finance until the allocation was completed.
The allocation status is regularly reported to the director in charge of Finance &Accounting.

As a result, DNV confirmed that INPEX’s methodology to manage the total amount of net
proceeds is appropriate and it is aligned with the CBS, GBP, GLP, GBGLs and GLGLs.

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Principle Four: Reporting
DNV confirmed that INPEX will disclose the allocation status of the proceeds in its
Integrated Report, Sustainability Report or its website until the full amount of theproceeds are allocated. The scope of reporting includes the balance of the amount of
unallocated proceeds, the allocated amount of the proceeds, and the approximate amount(or share) of proceeds that have been used for refinancing. INPEX also plans to disclose
following indicators as an environmental benefit when the project is in operation, within
the scope of confidentiality and as far as reasonably feasible.

•

Annual CO2 emission reduction（t-CO2/y）•

Installed capacity (MW)

These are aligned with the requirements of CBS, GBP, GLP, GBGLs and GLGLs. In
addition, INPEX plans to engage DNV post-funding verification to ensure that theallocation status of the Green Finance complies with the key elements of CBS and theabove-mentioned principles and guidelines.
As a result, based on the limited assurance procedures conducted by DNV, nothing hascome to our attention that causes us to believe that the Green Finance is not, in allmaterial respects, in compliance with the requirements of the CBS and the related
requirements and the associated sector eligibility criteria.
In this report, no assurance is provided regarding the financial performance of the Green
Finance, the value of any investments in the Green Finance, or the long-term
environmental benefits of the transaction.

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DNV Business Assurance Japan K.K.
24 March 2023

Mark Robinson

Naoki Maeda

Manager, Sustainability Services

Managing Director

DNV Business Assurance, Australia

DNV Business Assurance Japan K.K.

Masato Kanedome

Hisashi Hashimoto

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 thesafety and sustainability of their business. Combining leading technical and operational expertise, risk methodology andin-depth industry knowledge, we empower our customers’ decisions and actions with trust and confidence. We
continuously invest in research and collaborative innovation to provide customers and society with operational andtechnological foresight.
With our origins stretching back to 1864, our reach today is global. Operating in more than 100 countries, our 16,000
professionals are dedicated to helping customers make the world safer, smarter and greener.

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Schedule-1. Nominated Green Projects

Regarding renewable energies such as geothermal power generation, onshore wind power generation and offshore wind power generation, DNV
verified the eligibility of multiple nominated Green Projects (as of March 2023), including an overview. The project is disclosed in an aggregatedformat because it contains some confidential information, but the information necessary for verification is provided to DNV, the verification
organisation.
In the future, in the funding through the Green Finance based on CBI certification, in addition to the above-mentioned verified projects, if
additional projects are included, it will be evaluated by INPEX in advance to meet CBS and internal eligibility criteria, and will be verified in atimely manner by DNV. The actual allocation of funds will be allocated to part or all of the proceeds for one or more projects in the list of
nominated Green Projects, and the allocation results will be disclosed in the periodic report.

No.

Categories

Sub-categories

1

Geothermal
power
generation2

Onshore wind
power
generation

3

RenewableenergyOffshore wind
power
generation

Project Summary・・・Multiple geothermal power plants (domestic and overseas projects)
Including projects that are in operation and are scheduled to start operation in the future
The nominated project meets the CBS technical criteria, and are carried out risk
assessment of the project in accordance with the INPEX internal regulations and theenvironmental impact assessment system.

・・・

Onshore wind farms (domestic projects)
Projects that are scheduled to start operation in the future
The nominated project meets the CBS technical criteria, and the environmental impact
assessment process is proceeding in accordance with the project’s environmental impact
assessment system.

・・・Multiple offshore wind farms (domestic and overseas projects)
Including projects that are in operation and are scheduled to start operation in the future
The nominated projects meet the CBS technical criteria, INPEX internal regulations andthe environmental impact assessment process is proceeding in accordance with the
projects’ environmental impact assessment system.

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Schedule-2. Green Finance Eligibility Assessment Protocol
Following GBP-1 through GBP-4 and GLP-1 through GLP-4 are DNV Green Finance Eligibility Assessment Protocol which was created basedon the Green Bond Principles 2021 and Green Loan Principles 2021 (This Protocol includes the key elements of GBGLs and GLGLs).

GBP-1/GLP-1 Use of proceeds
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1aType ofbond

The Green Bond and Loan must fall in one of thefollowing categories, as defined by the Green Bond
Principles:•Green Use of Proceeds Finance (Bond and Loan)•
Green Use of Proceeds Revenue Finance•Green Project Finance•
Other• Interviews with
INPEX
management• Document review

The BOND falls into the category below:•
Green Use of Proceeds Finance (Bond and Loan)

1b

Project
Categories

The cornerstone of a Green Bond and Loan is theutilisation of the proceeds which should beappropriately described in the legal documentation forthe security or the loan agreement.

• Interviews with
INPEX
management• Document review

It was confirmed that it is planned to be properly stated in thelegal documents related to the securities or the loan
agreement that the all the proceeds are allocated to financing(new investment) or refinancing for “projects related todevelopment, construction, operation, and refurbishment of
renewable energy such as onshore wind power, offshore wind
power and geothermal power”.

1c

Environment
al benefits

All designated Green Project categories should provide
clear environmentally sustainable benefits, which,where feasible, will be quantified or assessed by thefundraiser.

• Interviews with
INPEX
management• Document review

It was confirmed that the Green Projects have environmental
benefits as a reduction of CO2 emissions which will beassessed by INPEX. It was also confirmed that theirenvironmental impact would be reported annually.

1d

Refinancing
share

In the event that a proportion of the proceeds may be
used for refinancing, it is recommended thatfundraisers provide an estimate of the share of• Interviews with
INPEX
management

It was confirmed that INPEX plans to clarify the approximate
amount (or share) of the proceeds that was allocated torefinancing through the reporting of the allocation status.

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INPEX Corporation Green Finance Pre-Funding Verification Report Revision 1.0

Ref.

Criteria

Requirements

Work Undertaken

financing vs. re-financing, and where appropriate, also
clarify which investments or project portfolios may be
refinanced.

• Document review

DNV Findings

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

Criteria

Requirements

Work Undertaken

DNV Findings

2aInvestment-decision
process• Interviews withINPEX management• Document review

It was confirmed that INPEX has a process todetermine the eligibility of the project that use theproceeds from the Green Finance, and that theoutline is specified in the Framework.

2b

Fundraiser’s
environmentalgovernanceframework

The fundraiser of a Green Bond and Loan should outline thedecision-making process it follows to determine the eligibility of
projects using Green Bond and Loan proceeds. This includes,
without limitation:• A process to determine how the projects fit within the eligible
Green Projects categories identified in the Green Bond Principles;• The criteria making the projects eligible for using the Green
Bond proceeds; and• The environmental green objectives
In addition to information disclosed by a fundraiser on its Green
Bond and Loan process, criteria and assurances, Green Bond
investors and Green Loan lenders may also take into consideration
the quality of the fundraiser’s overall framework and performance
regarding environmental sustainability.

• Interviews withINPEX management• Document review

It was confirmed that the Green Project
implemented by INPEX is fully considered for theenvironmental aspect based on the legal systemof each country, and is in the process of being
released in sequence.
This project is in line with the “Long-term
Strategy and Medium-term Business Plan (INPEX
Vision @2022)” in which INPEX has set out
specific goals and pathways towards therealisation of a net zero carbon society in 2050.

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INPEX Corporation Green Finance Pre-Funding Verification Report Revision 1.0

GBP-3/GLP-3 Management of Proceeds
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

3aTracking
procedure-1

The net proceeds of Green Bonds and Loans should be credited
to a sub-account, moved to a sub-portfolio or otherwise tracked
by the fundraiser in an appropriate manner and attested to by aformal internal process that will be linked to the fundraiser’s
lending and investment operations for Green Projects.

• Interviews withINPEX management• Document review

It was confirmed that the net proceeds of theGreen Finance can be tracked by INPEX’s internal
system and proved in the confirmation process
based on the internal regulations.

3b

Tracking
procedure-2

So long as the Green Bonds and Loans are outstanding, thebalance of the tracked proceeds should be periodically reduced byamounts matching eligible green investments or loan
disbursements made during that period.

• Interviews withINPEX management• Document review

DNV confirmed that INPEX plans to review thebalances of unallocated amount on a regularbasis (at least quarterly) during the period fromthe funding to the redemption or repayment of
the Green Finance.

3c

Temporaryholdings

Pending such investments or disbursements to eligible Green
Projects, the fundraiser should make known to investors or
lenders the intended types of temporary investment instruments
for the balance of unallocated proceeds.

• Interviews withINPEX management• Document review

It was confirmed that the balance of unallocatedamount is recognised successively through
INPEX’s internal system and confirmation
process.

GBP-4/GLP-4 Reporting
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

4aPeriodical
reportingIn addition to reporting on the use of proceeds and the temporary
investment of unallocated proceeds, fundraisers should provide atleast annually a list of projects to which Green Bond proceeds
have been allocated including• Interviews withINPEX management
Document review

It was confirmed that INPEX would provide anannual reporting on the Green Finance andwould disclose the status of the allocatedPage 22 of 26

INPEX Corporation Green Finance Pre-Funding Verification Report Revision 1.0

Ref.

Criteria

Requirements

Work Undertaken- when possible with regards to confidentiality and/or competitive
considerations- a brief description of the projects and the amounts disbursed, as
well as the expected environmentally sustainable impact.

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DNV Findings
projects as necessary until the proceeds wereallocated.

INPEX Corporation Green Finance Pre-Funding Verification Report Revision 1.0

Schedule-3. CBS v3.0 Requirements
Summary of conformity condition for CBS v3.0
The criteria against which the relevant projects and assets have been reviewed prior to their inclusion of eligible projects and assets aregrouped under the requirements as detailed within the CBS v3.0 and associated Sector Criteria. The main requirements of CBS3.0 version
and Sector Criteria are roughly classified into Part A to Part C in the table below.
In the following parts, the terms “bond”, “issuer” and “investor” may be read as “loan”, “borrower” and “lender” respectively, as
appropriate.

Part A: Pre-Issuance Requirements
Scope
1.Use of Proceeds

Requirements
Net proceeds of the bond must be allocated to nominated projects and assets.

2. Process for Evaluation and
Selection of Projects & Assets

A decision-making process shall be maintained to determine the continuing eligibility of the nominated projects
and assets.

3. Management of Proceeds
4. Reporting Prior to Issuance

The net proceeds of the bond shall be credited to a sub-account, moved to a sub-portfolio or otherwise identified
in an appropriate manner, and documented.
There are specific requirements in respect of reporting on use of proceeds and list of nominated projects andassets, finance/refinance plan, management process of unallocated proceeds, selected criteria, information
related to Update report, and the Framework which shall be disclosed.

Part B: Post-Issuance Requirements *This section is not included in this report (pre-issuance verification).
Scope

Requirements

5.Use of Proceeds

Net proceeds of the bond must be allocated to nominated projects and assets. Nominated Projects & Assets shall not be
nominated to other Certified Climate Bonds and Loans. The Net Proceeds of the Bond shall be no greater than the Issuer’s
total investment exposure or debt obligation to the Nominated Projects & Assets.

6. Process for Evaluation and
Selection of Projects & Assets

A decision-making process shall be maintained to determine the continuing eligibility of the nominated projects and assets.

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INPEX Corporation Green Finance Pre-Funding Verification Report Revision 1.0

7. Management of Proceeds
8. Reporting

The net proceeds of the bond shall be credited to a sub-account, moved to a sub-portfolio or otherwise identified in an
appropriate manner, and documented.
The Issuer shall prepare an Update Report at least annually while the Bond remains outstanding. The Update report shall
include amounts allocated, impact reporting of environmental aspects, information of the projects and assets. This
information shall be provided to the verifier and to the CBS board to support the assessment of conformance with the CBS.

Part C: Eligibility of Projects & Assets
Scope

Requirements

9.Climate Bonds Taxonomy

Nominated projects and assets shall fall into one or more of the investment areas listed as included in
the Climate Bonds Taxonomy
Nominated Projects & Assets shall meet the specific eligibility requirements provided in the relevant
Sector Eligibility Criteria documents.
Followings are outline of the sector criteria against the verification

10. Sector Eligibility Criteria(1) Onshore wind power (wind energy)
Criterion︓Projects and assets that meet the requirements listed below
・Onshore wind power assets under construction or in operation(2) Offshore wind power (wind energy)
Criterion︓Projects and assets that meet the requirements listed below
・Offshore wind power assets under construction or in operation・Information disclosure component・
Mitigation component・Adaptation and resilience assessment

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INPEX Corporation Green Finance Pre-Funding Verification Report Revision 1.0(3) Geothermal power
Criterion︓Assets whose eligibility is confirmed according to
the assessment flow chart shown on the right

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