SECOND PARTY OPINION
EAST JAPAN RAILWAY COMPANYSUSTAINABILITY BOND (1ST - 3RD)PERIODIC REVIEW
Prepared by: DNV Business Assurance Japan K.K.
Location: Kobe, Japan
Date: 27 December 2023
Ref. Nr.: PRJN-461128-2022-AST-JPN-02

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Contents
Ⅰ. Scope and Objectives

3

Ⅱ. Responsibilities of JR East and DNV

4Ⅲ. Basis of DNV’s Opinion

4

Ⅳ. Work Undertaken

5

Ⅴ. Findings and DNV's Opinion

6

Ⅵ. Assessment Conclusion

14

Schedule-1 Sustainability Bonds Allocation Projects

15

Schedule-2 Sustainability Bonds Eligibility Assessment Protocol

16(1) Use of Proceeds

16(2) Process for Project Evaluation and Selection18(3) Management of Proceeds

19(4) Reporting

20

Revision History
Date of Issue
27 December 2023

Remarks
InitialDisclaimer
Our assessment relies on the premise that the data and information provided by Fundraiser to us as part of our review procedures have been provided in good faith.
Because of the selected nature (sampling) and other inherent limitation of both procedures and systems of internal control, there remains the unavoidable risk that errors
or irregularities, possibly significant, may not have been detected. Limited depth of evidence gathering including inquiry and analytical procedures and limited sampling at
lower levels in the organization 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 anindependent team of sustainability assurance professionals. DNV was not involved in the preparation of statements or data included in the Framework except for thisStatement. DNV maintains complete impartiality toward stakeholders interviewed during the assessment process.

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

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Ⅰ. Scope and Objectives
East Japan Railway Company (hereinafter, “JR East”) has commissioned DNV Business
Assurance Japan (hereinafter, “DNV”) to conduct periodic reviews of its Sustainability Bonds (1st,
2nd, and 3rd Sustainability Bonds, hereinafter "these Bonds").
The objective of the periodic review of DNV is to conduct an assessment to confirm that these
Bonds meet the criteria such as the Sustainability Bond Guidelines (ICMA, hereinafter “SBG”), theGreen Bond Principles (ICMA, hereinafter “GBP”), the Green Bond Guidelines (Ministry of theEnvironment, hereinafter “GBGLs”), the Social Bond Principles (ICMA, hereinafter “SBP”), and theSocial Bond Guidelines (Financial Services Agency, hereinafter “SBGLs”), which will be describedlater, and to provide a second party opinion on the eligibility of these Bonds.
JR East issued the 1st Sustainability Bonds (unsecured straight bonds) of JPY 30 billion on 27
January 2020, the 2nd Sustainability Bonds (unsecured straight bonds) of JPY 30 billion on 25
January 2021, and the 3rd Sustainability Bonds (unsecured straight bonds) of JPY 30 billion on 21
January 2022. DNV conducted a periodic review for the period from January 2023 to November
2023 based on the SBG, GBP/GBGLs, and SBP/SBGLs.
DNV, as an independent external reviewer, identified no real or perceived conflict of interest
associated with the delivery of this second party opinion for JR East.
In this paper, no assurance is provided regarding the financial performance of the Sustainability
Bonds, the value of any investment in the Sustainability Bonds, or the long-term environmental
benefits of the transaction.

Standards/guidelines to be applied
No.

Standards/Guidelines1.

Sustainability Bond Guidelines
(SBG)

2.

Green Bond Principles (GBP)

3.

Scheme owner

Applied level*1*2 (Year of issuance)
1st

2nd

3rd

International Capital Market
Association (ICMA)International Capital Market
Association (ICMA)

Apply(2018)
Apply(2018)

Apply(2018)
Apply(2018)

Green Bond Guidelines (GBGLs)

Ministry of the Environment

―

―

4.

Social Bond Principles (SBP)

International Capital Market
Association (ICMA)

Apply(2018)

Apply(2020)

5.

Social Bond Guidelines (SBGLs)

Financial Services Agency

―

―

Apply
(2021)
Apply(2021)
Apply(2020)
Apply(2021)
Apply(2021)

6.

Green and Social Bonds: A HighLevel Mapping to the Sustainable
Development Goals

International Capital Market
Association (ICMA)*1

Apply: Eligibility for all four core common elements to each principle and guideline was assessed.

*2

Refer: Based on the Sustainability Bond projects and implementation plans, relevant contents were partiallyconsidered.

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Refer

Ⅱ. Responsibilities of JR East and DNV
The management of JR East has provided the information and data used by DNV during the deliveryof this review.
DNV’s second party opinion represents an independent opinion and is intended to inform JR Eastand other interested stakeholders in the allocated Sustainability Bonds of whether the establishedcriteria have been met, based on the information provided to us.
In our work, we have relied on the information and the facts presented to us by JR East. DNV is not
responsible for any aspect of the nominated assets referred to in this opinion and cannot be held
liable if estimates, findings, opinions, or conclusions are incorrect.
Thus, DNV shall not be held liable if any of the information or data provided by the management of
JR East and used as a basis for this assessment were not correct or complete.

Ⅲ. Basis of DNV’s Opinion
To provide as much flexibility for the issuer, JR East, as possible, DNV has adapted our JR East
Sustainability Bonds assessment methodology, which incorporates the requirements of the SBG,
GBP/GBGLs, and SBP/SBGLs to create a Sustainability Bonds Eligibility Assessment Protocol(hereinafter, “DNV’s Protocol”). Please refer to Schedule-2. The Protocol is applicable to
Sustainability Bonds under the SBP, GBP/GBGLs, and SBP/SBGLs.
DNV’s Protocol includes a set of suitable criteria that can be used to underpin DNV’s opinion. The
overarching principle behind the criteria is that the Sustainability Bonds should “enable capitalraising and investment for new and existing projects with social and environmental benefits”.
As per our Protocol, the criteria against which the Sustainability Bonds has been reviewed aregrouped under the four Principles:⚫

Principle One: Use of Proceeds
The Use of Proceeds criteria are guided by the requirement that a Sustainability Bonds
issuer must use the funds raised to finance eligible activities. The eligible activities should
produce clear social and environmental benefits.

⚫

Principle Two: Process for Project Evaluation and Selection
The Project Evaluation and Selection criteria are guided by the requirements that a
Sustainability Bonds issuer should outline the process it follows when determining
eligibility of an investment using Sustainability Bonds proceeds and outline any impact
objectives it will consider.

⚫

Principle Three: Management of Proceeds
The Management of Proceeds criteria are guided by the requirements that the
Sustainability Bonds should be tracked within the issuing organization, that separate

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portfolios should be created when necessary and that a declaration of how unallocatedfunds will be handled should be made.
⚫

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

Ⅳ. Work Undertaken
Our work constituted a high-level review of the available information, based on the understandingthat this information was provided to us by JR East 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-Issuance Assessment of Sustainability Bonds (*not included in thisreport)•Creation of a JR East specific Protocol, adapted to the purpose of the Sustainability Bonds,
as described above and in Schedule-2 to this assessment;•

Assessment of documentary evidence provided by JR East on the Bond and supplemented
by high-level desktop research. These checks refer to current assessment best practices
and standards methodology;•

Discussions with JR East, and review of relevant documentation;•

Documentation of findings against each element of the criteria.

ii. Post-Issuance Assessment of Sustainability Bonds *This Report•

Assessment of evidential documents provided by JR East after issuance of the
Sustainability Bonds, and supplemental assessment by desk review from a higher
perspective;•

Interview with key personnel of JR East, and review of the relevant documentation;•

Field research and inspection (if necessary);•

Review of the nominated projects and assets at the time of the post-issuance verification(update of the details mentioned in Schedule-1);•

Document creation of post-issuance assessment result.

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Ⅴ. Findings and DNV's Opinion
DNV's findings and opinion are listed below:

Principle One: Use of Proceeds
DNV has confirmed that, as of December 2023, JR East had allocated most of the proceeds fromthese Bonds to the following projects:

1. E235 series railcars (Yokosuka/Sobu Rapid Line Service) … JPY 26.4 billion
allocated (1st Sustainability Bonds), JPY 26.0 billion allocated (2nd Sustainability
Bonds)
This project is to manufacture and introduce a new typeof railcars that combine improved environmental
friendliness through the latest energy-saving
technologies, improved operational stability through theuse of dual systems for major equipment and the latest
condition monitoring functions, and improved
comfortability by introducing wider seats (see Figure-1).
DNV has confirmed that the project is progressing
smoothly.

Figure-1 Exterior of an E235 series railcar

2. AC Storage Battery-driven train EV-E801 series (Oga Line) … JPY 3.4 billion
allocated (1st Sustainability Bonds)
This project is to manufacture and introduce theaccumulator railcar train EV-E801 series AC Storage
Battery-driven trains, which are equipped with largecapacity storage batteries and can run even in nonelectrified sections (see Figure-2).
DNV has confirmed that the project has been completed
and that the target number of six trains is runningsmoothly.

Figure-2 Exterior of an EV-E801 series traincars

3. Renewable energy (Solar and wind power generation) … JPY 3.8 billion allocated(2nd Sustainability Bonds)
This project is to construct and install solar and wind power plant as shown in Table-1. DNV has
confirmed that both of them have already started operation and are running smoothly.

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Table-1 Overview of renewable energy projects
Project Name

Equipment

Location

Keiyo Rolling Stock Center Solar Cell

Mihama Ward, Chiba City,

Power Plant

Chiba Prefecture

Uchihara No.1 & No.2 Solar Power

Kasama and Mito City,

PlantsIbaraki Prefecture

Capacity

Oaza Ishie, Aomori City,

Aomori Ishie Solar Power Plant

Aomori Prefecture

JR Akita Shimohama Wind Power

Shimohama Hanekawa, Akita

Station

City, Akita Prefecture

Start of Operation

1,050 kWMarch 2014

3,250 kW

February 2015

1,990 kW

August 2019

1,990 kW

December 2016

4. Rebuilding of wards, etc. at JR Tokyo General Hospital … JPY 2.9 billion allocated(3rd Sustainability Bonds)
This project is to rebuild the wards (inpatient wing) of JR
Tokyo General Hospital, which was constructed for morethan 40 years ago, as well as to build a new Healthcare
Wing (tentative name) and a new courtyard (see Figure3). The Healthcare Wing (tentative name) is scheduled toopen in the spring of 2024, and the new ward (inpatientwing) in the spring of 2025. DNV has confirmed that the
project is progressing as planned.
Figure-3 Exterior image

5. KAWASAKI DELTA … JPY 20 billion allocated (3rd Sustainability Bonds)
This project is to develop KAWASAKI DELTA, adevelopment plan for the west exit of Kawasaki Station,
which was promoted with the aim of “sustainable urban
development” based on the JR East Group Management
Vision “Move Up” 2027 (see Figure-4). Table-2 shows theoverview of the project. DNV has confirmed that the entire
amount was allocated to this project as refinancing andthat the project has been completed as planned.
Figure-4 Appearance of KAWASAKI DELTA

Table-2 Overview of KAWASAKI DELTA

Location
Surface area

JR Kawasaki Tower Office

JR Kawasaki Tower

Hotel Metropolitan

Building

Commercial Building

Kawasaki

1-5 Omiya-Cho, Saiwai-Ku, Kawasaki-Shi, Kanagawa Prefecture
Approx. 12,400 m2

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Total floor area
Number of stories
HeightZEB＊(Primary energy
reduction rate)
CASBEE
Current status

Approx. 137,000 m2
29 floors above ground

5 floors above ground/2 basement floors/1 basement floor

Approx. 128 m

Approx. 27 m

ZEB ReadyZEB Oriented

ZEB Oriented

(52%)

(46%)

(41%)

16 floors above ground
Approx. 59 m

Rank S
The entire city block was completed in April 2021, and all facilities have alreadyopened.

＊ ZEB；net Zero Energy Building

Principle Two: Process for Project Evaluation and Selection
Through the review, DNV has confirmed that the nominated sustainability projects listed in
Schedule-1 are in compliance with the goals of the JR East Group Management Vision “MoveUp” 2027, the “Energy Vision 2027 – Connect” based on the vision, and the long-term
environmental goal “Zero Carbon Challenge 2050,” which are related to cleantransportation/renewable energy/green buildings and climate change adaptation, etc.
contributing to CO2 emission reduction, and that they have been evaluated and selected
through appropriate prescribed processes at the Finance & Investment Planning Department
and relevant internal departments of JR East.
Specifically, the Finance & Investment Planning Department selects eligible projects based on acomprehensive analysis and review of financial aspects, technical and operational aspects,
market environment, and ESG risks, and the Director in charge of Finance & Investment
Planning* makes the final decision.
＊ As of December 2023, the Executive Director/Director General of Corporate Strategies Headquarters isin charge.

As for the environmental and social impact of investments and business operations, DNV has
confirmed that the Group company/department in charge of the project identifies and assesses
risks in line with the company-wide risk management system and under the management of the
Corporate & Legal Strategies Department before the implementation of investment or businessto reduce risks or take other measures where necessary, and that a system has been
established to ensure that the proceeds of the Sustainability Bonds etc. are not allocated toprojects related to the following:•Transactions that do not comply with the laws and regulations of the country in which theytake place, including laws in relation to unfair business practices, bribery, corruption,
extortion, and embezzlement.

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Principle Three: Management of Proceeds
DNV has confirmed how JR East has managed the proceeds since January 2023 until November
2023. The allocation status of proceeds is shown in Tables 3 to 5 in Principle Four.
DNV has confirmed that the net proceeds are managed on a quarterly basis by the Finance &Investment Planning Department of JR East, which prepares a dedicated management sheet
and manages the allocation status.
DNV has confirmed that JR East had fully allocated the proceeds from the 1st and 2nd
Sustainability Bonds to each eligible project as planned by November 2023. DNV has also
confirmed that the unallocated proceeds of the 3rd Sustainability Bonds as of 30 September
2023 (JPY 6.9 billion) were managed in cash and will be fully allocated within FY2024.
Note as mentioned earlier that no assurance is provided regarding the financial performance of
these Bonds, the value of any investment, or the long-term environmental benefits of thetransaction.

Principle Four: Reporting
DNV has confirmed that JR East plans to disclose the allocation status of proceeds and the socialand environmental benefits on its website. According to its Framework, the allocation status ofproceeds will be reported until the proceeds are fully allocated, and the social and environmental
benefits will be reported until the redemption of these Bonds.
Through periodic reviews, DNV has confirmed that the social and environmental benefits brought
about by the Sustainability Bonds have been properly calculated using the method set out by JR
East prior to the issuance of these Bonds, and that the social and environmental benefits wereobtained as planned.
The following tables show the allocation status of proceeds and the social and environmental
benefits of these Bonds in the period up to 30 September 2023.

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<Allocation status>
1st Sustainability Bonds (unsecured straight bonds)
DNV has confirmed that the proceeds from the 1st Sustainability Bonds (unsecured straightbonds) were fully allocated as planned, as shown in Table-3.
Table-3 Allocation status of proceeds from the 1st Sustainability Bonds (unsecured straight bonds)
Eligible
projects

GBP
Category

E235 series
railcars(Yokosuka/Sobu
Rapid Line
Service)
AC Storage
Battery-driven
train EV-E801
series (Oga
Line)

Clean
transportation

Amountofproceeds

SBP
Category

Allocated amountNew
Refinancing
investment

Affordable
basic
infrastructure

JPY 29.8
billion―JPY 29.8
billionJPY 29.8 billion(fully allocated)

Total amount

Unallocatedamount――

2nd Sustainability Bonds (unsecured straight bonds)
DNV has confirmed that the proceeds from the 2nd Sustainability Bonds (unsecured straightbonds) were fully allocated as planned, as shown in Table-4.
Table-4 Allocation status of proceeds from the 2nd Sustainability Bonds (unsecured straight bonds)
Eligible
projects

GBP
Category

E235 series
railcars(Yokosuka/Sobu
Rapid Line
Service)Cleantransportation

Solar power
generation*1
Wind power
generation*2

RenewableenergyAmountofproceeds

SBP
Category
Affordable
basic

JPY 29.8
billion―JPY 26billion―JPY 3.8billion――JPY 29.8 billion(fully allocated)―

Keiyo Rolling Stock Center Solar Cell Power Plant, Uchihara No.1 & No.2 Solar Power Plants, Aomori
Ishie Solar Power Plant*2

Unallocatedamount―infrastructure

Total amount*1

Allocated amountNew
Refinancing
investment

JR Akita Shimohama Wind Power Station

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3rd Sustainability Bonds (unsecured straight bonds)
DNV has confirmed that the proceeds from the 3rd Sustainability Bonds (unsecured straightbonds) were progressively allocated as planned, as shown in Table-5, and that the unallocatedamount as of 30 September 2023 (JPY 6.9 billion), which was managed in cash, will be fully
allocated within FY2024.
Table-5 Allocation status of proceeds from the 3rd Sustainability Bonds (unsecured straight bonds)
Eligible
projects
Rebuilding ofwards, etc. at
JR Tokyo
GeneralHospital
KAWASAKI
DELTA

GBP
Category

Amountofproceeds

SBP
Category

Allocated amountNew
Refinancing
investment

Access to―essential
serviceGreenbuilding

Affordable basic
infrastructure

JPY 29.8
billionTotal amount―JPY 2.9billionJPY 6.9billionJPY 20billion――JPY 22.9 billion

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UnallocatedamountJPY 6.9billion<Social and environmental benefits>
1st Sustainability Bonds (unsecured straight bonds)
DNV has confirmed that, as of December 2023, the projects in the table below are progressing
smoothly as originally planned, and that introduced railcars are operating smoothly and theenvironmental benefits are being obtained.
Eligible
projects

Category
CommonE235 series
railcars(Yokosuka/Sobu
Rapid Line
Service)

Green

SocialCommonAC Storage
Battery-driven
train EV-E801
series (Oga
Line)

Green

SocialSocial and environmental benefits
Impact indicators

Achievement

Record of introducing railcars

Introduced: 57 railcars/ Total: 93
railcars

Energy-saving by using VVVF inverter
etc. (vs. conventional products)

19.8% energy-saving

Energy-saving by using LED lighting (vs.
conventional fluorescent lighting)

40% energy-saving

Number of railcars equipped withemergency power supplies
Number of railcars with space forwheelchairs
Number of railcars with barrier-free
restrooms
Record of Introducing train cars

30 railcars
57 railcars
57 railcars
Introduced: 6 railcars/ Total: 6
railcars

CO2 emissions reduction (vs. conventional
60% reduction
diesel trains)
Exhaust gas reduction (vs. conventional
diesel trains)

100% reduction

Noise reduction (vs. conventional diesel
trains)30 dB reduction

Number of railcars with barrier-free
restrooms

6 railcars

2nd Sustainability Bonds (unsecured straight bonds)
DNV has confirmed that, as of December 2023, the projects in the table below are progressing
smoothly as originally planned, and that the introduced railcars are operating smoothly. DNV has
also confirmed that that the solar and wind power plants are operating smoothly, and theenvironmental benefits are being obtained.
Eligible
projects

Social and environmental benefits
Category
CommonE235 series
railcars(Yokosuka/Sobu
Rapid Line
Service)

Green

SocialImpact indicators

Achievement

Record of introducing railcars

Introduced: 57 railcars/ Total: 93
railcars

Energy-saving by using VVVF inverter
etc. (vs. conventional products)

19.8% energy-saving

Energy-saving by using LED lighting (vs.
conventional fluorescent lighting)

40% energy-saving

Number of railcars equipped withemergency power supplies

30 railcars

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Number of railcars with space forwheelchairs

Solar power
generation

Green

Wind power
generation

Green

Number of railcars with barrier-free
restrooms
FY2022 power generation (MWh) /Cumulative power generation (MWh)FY2022 CO2 reduction / Cumulative CO2
reduction
FY2022 power generation (MWh) /Cumulative power generation (MWh)FY2022 CO2 reduction / Cumulative CO2
reduction

57 railcars
57 railcars
7,626 MWh / 15,437 MWh
3,362 t-CO2 / 6,814 t-CO2
4,020 MWh / 8,761 MWh
1,938 t-CO2 / 4,413 t-CO2

3rd Sustainability Bonds (unsecured straight bonds)
DNV has confirmed that, as of December 2023, the rebuilding of wards, etc. at JR Tokyo General
Hospital is progressing as originally planned. DNV has also confirmed that KAWASAKI DELTA has
progressed and opened as planned, and that the social and environmental benefits are being
obtained.
Eligible
projects

Rebuilding ofwards, etc. at
JR Tokyo
GeneralHospital

Social and environmental benefits
Impact indicators

Category

Total number of patients (inpatients andoutpatients)
Number of ambulances acceptedSocialEquipment included in the new ward andthe Healthcare Wing

No achievements in FY2022 due toconstruction in progressNational exams pass rate for nurses atthe Higher Nursing School of JR Tokyo
General Hospital
Type/rank of environmental certifications
obtained: CASBEE-construction (new)KAWASAKI
DELTA

Achievement

Green

SocialType/rank of environmental certifications
obtained: BELS
Primary energy consumption: Electricity(October 2022 – September 2023)
Primary energy consumption: Gas(October 2022 – September 2023)
CO2 emissions(October 2022 – September 2023)
Pedestrian network: Premises open to the
public (inc. ground floor)＊ ZEB；net Zero Energy Building

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Rank S
5-Stars (ZEB＊ Ready / ZEB＊
Oriented)
11,306 MWh
1,775,253 m3
7,232 t-CO2
4,956 m2

Ⅵ. Assessment Conclusion
On the basis of the information provided by JR East and the work undertaken, it is DNV’s opinion
that JR East meets the criteria established in the Protocol and that it is aligned with the stateddefinition or purpose of the Sustainability Bonds within the SBG, GBP/GBGLs, and SBP/SBGLs, whichis to “enable capital-raising and investment for new and existing projects with social andenvironmental benefits.”

DNV Business Assurance Japan K.K.
27 December 2023

Thomas Leonard

Naoki Maeda

Head of Section, Sustainability Services

Representative Director/SCPA

Supply Chain & Product Assurance

Senior Vice President

DNV Australia, New Zealand and Southeast Asia

DNV Business Assurance Japan K.K.

Masato Kanedome

Akira Tsukasaki

Project Leader

Assessor

DNV Business Assurance Japan K.K.

DNV Business Assurance Japan K.K.

About DNV
Driven by our purpose of safeguarding life, property and the environment, DNV enables organisations to advance the safety
and sustainability of their business. Combining leading technical and operational expertise, risk methodology and in-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 and technological foresight.
With our origins stretching back to 1864, our reach today is global. Operating in more than 100 countries, our 16,000
professionals are dedicated to helping customers make the world safer, smarter and greener.

Disclaimer
Responsibilities of the Management of the Fundraiser and the Second-Party Opinion Providers, DNV : The management ofFundraiser has provided the information and data used by DNV during the delivery of this review. Our statement represents an
independent opinion and is intended to inform the Fundraiser management and other interested stakeholders in the Bond as towhether the established criteria have been met, based on the information provided to us. In our work we have relied on theinformation and the facts presented to us by the Fundraiser. DNV is not responsible for any aspect of the nominated assets
referred to in this opinion and cannot be held liable if estimates, findings, opinions, or conclusions are incorrect. Thus, DNV
shall not be held liable if any of the information or data provided by the Fundraiser’s management and used as a basis for thisassessment were not correct or complete

Page 14 of 21

Schedule-1 Sustainability Bonds Allocation Projects
The sustainability projects listed in the table are eligible projects as described in the East Japan Railway Company Sustainability Bond Framework.

Eligible projects

E235 series railcars(Yokosuka/Sobu Rapid Line
Service)
AC Storage Battery-driven train
EV-E801 series (Oga Line)
Solar power generation
Wind power generation

Rebuilding of wards, etc. at JR
Tokyo General Hospital

KAWASAKI DELTA

GBP
Category

SBP
Category

Target population

All railway users including
Cleantransportation

Affordable
basic
infrastructure

persons with disabilities,

Target Framework(Target Sustainability Bonds)
Released
Released
Released
2019
2020
2021
(1st)
(2nd)
(3rd)
〇

〇
Target8, 11, 13senior, pregnant,children, and families with

Contribution
to
SDGs

〇

childrenRenewableenergy―Greenbuilding――〇

Target8, 11, 13――〇Target8, 11, 13

Access toessential
serviceAll railway users including
patients, healthcare
professionals treating
patients, and othervulnerable groups,
including victims ofnatural disasters〇

Target8, 11Affordable
basic
infrastructure

All people including local
companies and residents〇

Target8, 11, 13Page 15 of 21

Schedule-2 Sustainability Bonds Eligibility Assessment Protocol
The following checklists (1) to (4) are DNV's Sustainability Bonds Eligibility Assessment Protocol created for JR East based on the requirements of SBG,
GBP, SBP, and GBGLs. The "Confirmed documents” in the work undertaken include internal documents of JR East and are provided by JR East as evidenceof eligibility judgement for DNV.
The East Japan Railway Company Sustainability Finance Framework and related legal documents described in the table are separately disclosed as
explanatory materials for investors.

(1) Use of Proceeds
Ref.

Criteria

Requirements

Work Undertaken

1aType of bond

The Sustainability Bonds must fall in oneof the following categories, as defined by
SBP and GBP.

Confirmed documents:
Through the documentation review and consultation, DNV has- East Japan Railway Company
confirmed that JR East’s Sustainability Bonds fall into the following
Sustainability Bond Framework categories:(hereinafter, the“Framework”)(Standard) Sustainability Bond
Interviews with JR East

- (Standard) Sustainability Bond
- Sustainability Revenue Bond
- Sustainability Project Bond
- Sustainability Security Bond
1b

Project
Categories

The cornerstone of the Sustainability
Bonds is the utilization of the proceeds ofthe finance which should be appropriately
described in the legal documentation forthe security.

Confirmed documents:- Framework- Assessment documentation
Interviews with JR East

DNV Findings

DNV has confirmed that the proceeds have been allocated to thefollowing projects:<E235 series railcars (Yokosuka/Sobu Rapid Line Service)>- Green: Clean transportation (overall rail transportation)- Social: Affordable basic infrastructure (railcars, railway facilities,
pedestrian network)<AC Storage Battery-driven train EV-E801 series (Oga Line)>- Green: Clean transportation (overall rail transportation)- Social: Affordable basic infrastructure (railcars, railway facilities,
pedestrian network)<Solar power generation>- Green: Renewable energy

Page 16 of 21

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings<Wind power generation>- Green: Renewable energy<Rebuilding of wards, etc. at JR Tokyo General Hospital>- Social: Access to essential service<KAWASAKI DELTA>- Green: Green building- Social: Socioeconomic improvement and empowerment

1c

Environmental
and social
benefits

All designated Sustainability Project
categories should provide clear greenly
and/or social benefits, which, where
feasible, will be quantified or assessed by
the fundraiser.

Confirmed documents:- Framework- Assessment documentation
Interviews with JR East

DNV has confirmed that the green projects contribute to the
reduction of CO2 emissions from railway operations.
As for the sustainability project, DNV assessed it as having sufficient
benefits to improve social issues as it enhances the convenience of
public transportation (railways) for a wide range of railway users,
including the elderly and wheelchair users, taking into account thebackground to the enactment of the relevant legislation (the Barrier
Free Act) and the actual implementation state of accessible/universal
design.

1d

Refinancing
share

In the event that a proportion of theproceeds may be used for refinancing, it
is recommended that fundraiser provide
an estimate of the share of financing vs.
refinancing, and where appropriate, also
clarify which investments or project
portfolios may be refinanced.

Confirmed documents:- Framework- Assessment documentation
Interviews with JR East

DNV has confirmed that JR East had used most of the net proceeds
for both new investments and refinancing for one or more of theeligible projects at the end of September 2023. DNV has also
confirmed that JR East intends to identify, through reporting (annual
reporting), the estimated amount of the portion of the proceeds
allocated to refinancing.

Page 17 of 21

(2) Process for Project Evaluation and Selection
Ref.

Criteria

Requirements

2aInvestment
The fundraiser of the Sustainability Bonds
decision process should outline the decision-making
process it follows to determine theeligibility of projects using Sustainability
Bonds proceeds. This includes, without
limitation:Work Undertaken

DNV Findings

Confirmed documents:- Framework- Assessment documentation
Interviews with JR East

DNV has confirmed that JR East has selected eligible projects for
the Sustainability Bonds etc. in accordance with the Frameworkand internal regulations. Specifically, the procedure is as follows:

Confirmed documents:- Framework- Assessment documentation
Interviews with JR East

DNV has confirmed, through the documentation review andinterviews, that the planned Sustainability Bonds etc. are in linewith JR East’s business and environmental initiatives such as “MoveUp” 2027, the “Energy Vision 2027 – Connect,” “Zero Carbon
Challenge 2050,” etc., and are closely related to the business andenvironmental sustainability.

 A process to determine how the
projects fit within the eligible
Sustainability (Green and Social)
Projects categories identified in the
Sustainability Bonds Principles; The criteria making the projects eligible
for using the Sustainability Bonds
proceeds; and The sustainability objectives for green
and social
2b

Fundraiser’s
environmental
and social
governanceframework

In addition to criteria and certifications,the information published by fundraiser
regarding the Sustainability Bonds
process is also considered the quality of
performance of the fundraiser's
framework and environmental and social
sustainability.

Page 18 of 21- The Finance & Investment Planning Department selects eligible
projects and the Director* in charge of Finance & Investment
Planning gives approvals.
＊ As of December 2023, the Executive Director/Director
General of Corporate Strategies Headquarters is in charge.
- In assessing the eligibility of the projects, a comprehensive
analysis and review of financial aspects, technical andoperational aspects, market environment, and ESG risks should
be undertaken.

(3) Management of Proceeds
Ref.

Criteria

Requirements

Work Undertaken

3aTracking
procedure-1

Proceeds for funds raised through theConfirmed documents:
Sustainability Bonds should be managed - Framework
in sub-accounts, incorporated into sub- Assessment documentation
portfolios, or tracked by other appropriate Interviews with JR Eastmeans. They should also be evidenced by
the fundraiser in a formal internal process
related to the fundraiser's investment andfinancing operations for sustainability
projects.

DNV has confirmed that JR East managed the proceeds from theSustainability Bonds in cash or cash equivalents, and that theallocation status is managed by the Finance & Investment Planning
Department on a quarterly basis until the proceeds are fully
allocated. The system for managing the allocation status is stipulated
in the internal document.

3b

Tracking
procedure-2

In the period for which the Sustainability
Bonds is to be managed, the balance ofthe tracked proceeds should beperiodically adjusted by amounts
matching eligible project investments orloan disbursements made during that
period.

Confirmed documents:- Framework- Assessment documentation
Interviews with JR East

DNV has confirmed that the allocation status of proceeds (allocatedamount and balance) is managed and adjusted according to theabove procedure. DNV has also confirmed that JR East uses thecodes registered in the accounting system to manage expenditure on
eligible projects, track the allocation status of proceeds in a separate
spreadsheet, and manages the unallocated and allocated proceeds
on a quarterly basis using a balance sheet.

3C

Temporaryholdings

Pending such investments or
disbursements to eligible Sustainability
Projects, the fundraiser should makeknown to investors the intended types of
temporary investment instruments forthe balance of unallocated proceeds.

Confirmed documents:- Framework- Assessment documentation
Interviews with JR East

DNV has confirmed that JR East has disclosed the allocation status ofproceeds on its website on an annual basis until the proceeds of the
Sustainability Bonds etc. are fully allocated. The disclosure includes
the amount of allocated proceeds on a project-by-project basis, theallocated amount of proceeds, and the amount allocated torefinancing.
DNV has also confirmed that the progress of the project and thesocial and environmental benefits are published on its website on anannual basis until the reimbursement is completed.

Page 19 of 21

DNV Findings

(4) Reporting
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

4aPeriodical
reportingIn addition to reporting on the use ofproceeds and the temporary investmentof unallocated proceeds, fundraisers
should provide at least annually a list of
projects to which the Sustainability Bonds
proceeds have been allocated including:Confirmed documents:- Framework- Assessment documentation
Interviews with JR East

DNV has confirmed that JR East plans to organize each time ofissuance and report annually on the allocation status of proceedsfrom the Sustainability Bonds etc. until the proceeds are fully
allocated, and the social and environmental benefits until thereimbursement.
The reporting discloses the following information as far aspracticable per eligible project category or per eligible project: confidentiality and/or competitive
considerations, where possible;
 a brief description of the projects andthe amounts disbursed, as well as the
expected environmental and social
sustainable impact【Allocation status】- Allocated amount- Unallocated amount- Refinancing amount【Impact reporting】<Green projects>- Record of introducing trains, storage battery-driven trains, or
hybrid railcars.
- Energy-saving by using VVVF inverter etc. (designed value)- Details of R&D investment (railcars)- Details of maintenance, renovation, and renewal of equipment
essential for railway operations, and disaster countermeasures(railway facilities)- Overview of renewable energy project (project name, location,
output capacity in kW, CO2 reductions)- Overview of green eligible building- Type/rank of environmental certifications obtained- Primary energy consumption, CO2 emissions
etc.
<Social projects>- Record of introducing railcars- Total number of patients (inpatients and outpatients)

Page 20 of 21

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings- Number of ambulances accepted- Equipment included in the new ward and the Healthcare Wing
- National exams pass rate for nurses at the Higher Nursing Schoolof JR Tokyo General Hospital- Number of railcars with wheelchair spaces and barrier-freespaces- Number of stations with platform doors, barrier-free restrooms,
and elevators- Overview of pedestrian network facilities
etc.

Page 21 of 21