ANNEX - SECOND PARTY OPINION
NYK LINE
NYK TRANSITION BOND (#2)

Prepared by: DNV Business Assurance Japan K.K.
Location: Kobe, Japan
Date: 22 June 2023
Ref. Nr.: PRJN-570226-2023-ANX-JPN-1

This opinion is prepared based on the NYK Green/Transition Bond Framework & Transition Bond Second
Party Opinion (hereinafter, "Master SPO") (Ref. Nr.: PRJN-258246-2021-AST-JPN-1 *July 1, 2021), which
was assessed against to the NYK Green/Transition Bond Framework (hereinafter, “Framework”)*For more information on the ANNEX - Second Party Opinion, see following DNV website
https://www.dnv.jp/news/page-227965 Release of a new evaluation service (Master SPO+ANNEX).

Page 1 of 26

Executive Summary
DNV Business Assurance Japan K.K. (hereinafter, "DNV") confirmed that the NYK Transition
Bond (#2) issued by Nippon Yusen Kabushiki Kaisha, also known as NYK Line (hereinafter,“NYK”), meets the various principles and guidelines requirements for such bond issuance andis planned to be issued and managed through appropriate internal processes based on the
Framework*1, which has been assessed its eligibility*2.
Table-1 shows an outline of the NYK Transition Bond (#2) and ANNEX - Second Party
Opinion. The additional items to be assessed in the ANNEX - Second Party Opinion are
Element-1 (Use of Proceeds) and Element-4 (Reporting) which are under the bonds withspecific use of proceeds (response to the four elements). The conformity of the otherelements to the criteria has already been assessed its eligibility in accordance with the
Framework.

Table-1 NYK Transition Bond (#2) ANNEX - Second Party Opinion
Target finance

NYK Transition Bond (#2)

Target organization

NYK Line

Target framework

NYK Green/Transition Bond Framework

Targeted external

NYK Green/Transition Bond Framework & Transition Bond Second Party Opinion

review

Ref. Nr.: PRJN-258246-2021-AST-JPN-1 Issued on July 1, 2021.
Criteria for Climate Transition Finance-

Climate Transition Finance Handbook (ICMA, 2020)-

Basic Guidelines on Climate Transition Finance (FSA, METI, and MoE, 2021).

Target criteria
Criteria for the use of proceeds bond-Green Bond Principles (ICMA, 2021)-

Green Bond Guidelines (MoE, 2022)*3
Disclosure element-1 (Transition-

Climate Transition

Disclosure element-2 (Environmental

Finance (response tomateriality)

the four disclosure

Disclosure element-3 (Science-based

elements)

strategy)
Disclosure element-4(Implementation transparency )Element-1

Bonds with specific

Element-2-

Confirmed reliance on Framework-

Confirmed reliance on Framework-

Confirmed and updated reliance on
Framework*4-

Confirmed reliance on the Framework. Additional-

LNG-fuelled and LPG-fuelled vessels-

Confirmed reliance on Frameworkassessment was implemented as follows:(Use of proceeds)

use of proceeds

Confirmed and updated reliance on the
Framework*4

strategy and governance)

Page 2 of 26

(response to the four

(Process for project

elements)

evaluation andselection)
Element-3(Management of-Confirmed reliance on Framework-

Confirmed reliance on Framework. Additional

proceeds)

assessment was implemented as follows.
-

Element-4

Status of fund allocation: allocated, unallocated andrefinanced amounts(Reporting)-

Environmental benefits: CO2 emission reduction
rate, SOx emission reduction rate, NOx emission
reduction rate

*1: NYK Green/Transition Bond Framework*2: NYK Green/Transition Bond Framework & Transition Bond Second Party Opinion*3: Through a revised version was released after the framework assessment, it was confirmed that the said
assessment covered the key elements*4: NYK has launched the NYK Group ESG Story 2022 following the previous framework assessment. It
enhances the transparency of the transition strategy further in terms of Disclosure Element-1 (Transition
Strategy and Governance) and Disclosure Element-4 (Implementation transparency) of the four Climate
Transition Finance disclosure elements. See Figures -1 and -2 for further details.
Disclosure element-1 (Transition strategy and governance); the transition target for 2050 was revised
upward from 50% reduction in GHG to net zero.
Disclosure element-4 (Implementation transparency); it was disclosed that the total investment for 20222050 is JPY 4.8 trillion, of which JPY 2.1 trillion will be used for investment in zero-emission vessels.

Page 3 of 26

Figure-1 Roadmap towards achieving net zero emissions, figures in JPY(Source: NYK Group ESG Story 2022)

Figure-2 Total investment 2022-2050, figures in JPY(Source: NYK Group ESG Story 2022)
As an external reviewer, DNV assessed the NYK Transition Bond (#2) in terms of the use ofproceeds and reporting eligibility, based on an evaluation of the framework and otherrelevant documents provided by NYK. DNV also confirmed that there were no changes to theother items, i.e., Issuer’s climate transition strategy and governance, Business model
environmental materiality, Climate transition strategy to be science-based including targets
and pathways, Implementation transparency of CTFH, Process for project evaluation andselection and Management of proceeds of GBP (in accordance with the Framework).

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Contents
Executive Summary

2

I. Scope and Objectives

6

II. Responsibilities of NYK and DNV

7III. Basis of DNV’s Opinion

8

IV. Work Undertaken

10

V. Findings and DNV's Opinion

11

VI. Assessment Conclusion

18

Schedule-1 NYK Transition Bond (#2) Eligible Projects

19

Schedule-2 Green Bond Eligibility Assessment Procedure

20

Revision history
Date of issue
22 June 2023

Remarks
Prepared and issued as NYK Transition Bond (#2) ANNEX - Second Party
OpinionDisclaimer
Our assessment relies on the premise that the data and information provided by Issuer to us as part of our review procedures have been provided in good faith.
Because of the selected nature (sampling) and other inherent limitation of both procedures and systems of internal control, there remains the unavoidable riskthat errors or irregularities, possibly significant, may not have been detected. Limited depth of evidence gathering including inquiry and analytical procedures andlimited 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 aperson 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 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
DNV has been commissioned by NYK to conduct a pre-issuance assessment of the Transition
Bonds to evaluate whether NYK meets the criteria for bonds with specified use of proceeds
as defined in the CTFH/CTFBG and GBP/GBGLs and to provide ANNEX - Second Party
Opinion regarding the eligibility of the Transition Bond.
As an independent external reviewer, DNV declares that it has no factual or perceived
conflict of interest in providing ANNEX - Second Party Opinion for NYK.
Furthermore, this report does not provide any assurances regarding the financial
performance, value of any investments, or the long-term environmental benefits of any
Transition Bonds issued under this Framework.

(1) Scope of review*
The review assessed the following elements and confirmed their alignment with four core elements in GBP.
☒

Use of proceeds☐

Process for Project Evaluation and Selection☐

Management of proceeds☒

Reporting*1

The scope of the review is to be applied as a part of the evaluation of the transition finance with use ofproceeds.

*2

DNV has already reviewed the four disclosure elements of CTFH/CTFBG, "Process for Project Evaluationand Selection" of GBP/GBGLs, and "Management of Proceeds" and has delivered our opinion below.
DNV has also confirmed through our assessment with NYK that no additional assessment was requiredsince NYK launched NYK Group ESG Story 2022 which discloses 2050 targets and investment plans
hence ensuring further transparency.
“NYK Green/Transition Bond Framework & Transition Bond Second Party Opinion “
Ref. Nr.: PRJN-258246-2021-AST-JPN Issued July 1, 2021

(2) Role(s) of review provider☒

Second Party Opinion☐

Certification☐

Verification☐

Ratings☐

Other (please specify):

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(3) Standards/guidelines to be applied
No.

Standards/guidelines

Scheme owner

1.

Climate Transition Finance Handbook (CTFH)*1

International Capital Market Association(ICMA), 2020

2.

Basic Guidelines on Climate Transition Finance (CTFBG) *1

Financial Services Agency, Ministry of
Economy, Trade and Industry, Ministryof the Environment, 2021

3.

Green Bond Principles (GBP) *2

International Capital Market Association(ICMA), 2021

4.

Green Bond Guidelines (GBGLs) *2

Ministry of the Environment, 2022

*1

The concept of climate transition focuses principally on the credibility of an issuer’s climate changerelated commitments and practices (quoted from CTFH and CTFBG).

*2

It confirms compliance with the four core elements (use of proceeds, process for project evaluation andselection, management of proceeds, and reporting) that must be met when implemented as abond/loan that meets the four elements (Issuer’s climate transition strategy and governance, Businessmodel environmental materiality, Climate transition strategy to be science-based including targets andpathways, Implementation transparency) of transition and has a specific use of proceeds (quoted fromCTFBG).

II. Responsibilities of NYK and DNV
NYK has provided the information and data used by DNV in this review. DNV's ANNEX Second Party Opinion represents an independent opinion and is intended to inform NYK and
its stakeholders as to whether the NYK Transition Bond (#2) meets the established criteria,
based on the information provided to us. In our work we have relied on the information andfacts presented to us by NYK. DNV is not responsible for any aspect of the nominatedprojects and assets referred to in this opinion and assumes no responsibility for any
inaccuracies in any facts, findings, opinions or conclusions. Thus, DNV shall not be held liable
if any of the information or data provided by NYK and used as a basis for this assessment
was not accurate or complete.

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III. Basis of DNV’s Opinion
To provide a more flexible ANNEX - Second Party Opinion for the issuer, NYK, DNV identified
the key assessment targets and carried out assessments in accordance with its procedures.
DNV, as an independent external reviewer, provides ANNEX - Second Party Opinion
according to the protocol.
Our Protocol includes a set of suitable criteria that can be used to underpin DNV’s opinion.
The overarching principle behind the Climate Transition Finance with a use of proceeds bondas the basis for the opinion are as follows:“provide an investment opportunity with transparent sustainability credentials”“enable capital-raising and investment for new and existing projects with environmental
benefits"

As per our Protocol, the criteria against which the NYK Transition Bond (#2) has beengrouped into (1) four common elements of CTFH and CTFBG (disclosure elements) and (2)four common elements of GBP and GBGLs, as shown on the following page.
The additional assessment for this ANNEX - Second Party Opinion covers element 1 andelement 4 of (2).
Part of (1) and (2) has already been assessed for eligibility. Detailed results of the eligibility
assessment for such parts of (1) and (2) can be found in the "NYK Green/Transition Bond
Framework & Transition Bond Second Party Opinion" (Ref. Nr.: PRJN-258246-2021-AST-JPN
July 1, 2021).

With regard to (1), DNV confirmed that NYK's Climate Transition efforts have been updated
in the NYK Group ESG Story 2022, with the following additions and changes to the 2050
target and investment plan to ensure transparency in further transition efforts. DNV also
confirmed that there are no major changes to disclosure elements -2 and 3.
Element 1. Issuer’s climate transition strategy and governance:-

Revised the 2050 target upwards from 50% reduction in GHG emission to net zero.
Expanded the fuel conversion timeline from car fleet to all types of vessels.

Element 4. Implementation transparency:-

Disclosed a total investment of JPY 4.8 trillion for the period 2022-2050.
Of the above, JPY 2.1 trillion will be invested in zero-emission vessels.

Page 8 of 26

(1) Four common elements of CTFH/ CTFBG (disclosure elements)
Principle One: Issuer’s climate transition strategy and governance
The financing purpose should be for enabling an issuer’s climate change strategy.

Principle Two: Business model environmental materiality
The planned climate transition trajectory should be relevant to the environmentally-material parts of
the issuer’s business model.

Principle Three: Transition is science-based including targets and pathway
Issuer’s climate strategy should reference science-based targets and transition pathways.

Principle Four: Implementation transparency
Market communication in connection with the offer of a financing instrument which has the aim offunding the issuer’s climate transition strategy should also provide transparency of the underlying
investment program.

(2) Four elements of GBP/GBGLs
Principle One: Use of proceeds *Subject to additional assessment of ANNEX – Second Party
OpinionThe Use of Proceeds criteria are guided by the requirement that an issuer of a transition financewith specific use of proceeds must use the funds raised to bond eligible activities. The eligible
activities should produce clear environmental benefits.

Principle Two: Proceeds for Project Evaluation and Selection
The Project Evaluation and Selection criteria are guided by the requirements that an issuer of atransition finance should outline the process it follows when determining eligibility of an investmentusing the proceeds from transition finance, and outline any impact objectives it will consider.

Principle Three: Management of Proceeds
The Management of Proceeds criteria are guided by the requirements that a transition financeshould be tracked within the issuing organization, that separate portfolios should be created whennecessary and that a declaration of how unallocated funds will be handled should be made.

Principle Four: Reporting *Subject to additional assessment of ANNEX - Second Party Opinion
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 that quantitative and/or
qualitative performance indicators should be used, where feasible.

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IV. Work Undertaken
Our work constituted a comprehensive review of the available information, based on theunderstanding that this information was provided to us by the issuer in good faith. We havenot performed an audit or other tests to check the veracity of the information provided to us.
The work undertaken to form our opinion included:i. Pre-funding assessment (ANNEX - Second Party Opinion)•

Assessment of additional documentary evidence provided by NYK on the NYK
Transition Bond and supplemented assessment by a comprehensive desktop
research. These checks refer to current assessment best practices and standards
methodologies;•

Discussions with NYK, and review of relevant documentation;•

Documentation of findings against each element of the criteria to be additionallyassessed.

ii. Post-funding assessment (periodic review) (*not included in this report)•

Interviews with fundraiser managers and review of relevant documentation.

•

Site surveys and inspections (if required).

•Documentation of post-issuance assessment results.

Page 10 of 26

V. Findings and DNV's Opinion
DNV's findings and opinion are as described below.
Please see Schedule-1 and Schedule-2 for details.

GBP・GBGLs-1.

Use of Proceeds

NYK has defined the criteria applied to eligible projects as transition projects which meet
NYK Transition Strategy and related handbook, principle, and guidelines (CTF-H and CTFBG).
The proceeds of the NYK Transition Bond (#2) will be used for the following three projects(01, 02 and 03). Please see Schedule-1 for details.
All three projects are eligible projects that are aligned with the NYK Green/Transition Bond
Framework and the NYK Group ESG Story 2022 launched subsequently in 2022, as well as
environmental targets set by IMO and the Ministry of Land, Infrastructure, Transport andTourism.
The maximum amount of proceeds of the NYK Transition Bond (#2) is expected to total JPY
20 billion. DNV confirmed at the time of this assessment that the proceeds will be used for
new investments and partly as refinancing. The actual allocation results will be reported on
an annual basis in accordance with GBP/GBGLs-4.Reporting.

Page 11 of 26

Project-01, 02: Partial funding for the construction of two LNG-fuelled car carriers-

The LNG-fuelled carrier is an essential transition project for the implementation of theTransition Strategy set out in the NYK Group ESG Story 2022.

-

Construction of the first vessel, Car Carrier Vessel Project 1, has started in September
2022 and is expected to be completed in October 2025, while construction of thesecond vessel, Car Carrier Vessel Project 2, has started in April 2021 and is expected
to be completed in August 2023.

-

According to the fuel conversion path developed by NYK, the first step is to reduce
CO2 emissions by promoting the introduction of LNG-fuelled vessels as described
below, with the aim of achieving zero emissions in the future by introducing andincreasing zero-emission fuel vessels. Measures to avoid lock-in can include
improvement of operational efficiency, energy-saving technologies, increased use ofbio and synthetic fuels, and utilization of carbon offsets.

-

As possible environmental benefits, CO2, SOx and NOx reduction rates, compared tothose by heavy oil-fuelled vessels of similar size, have been calculated. See Table-2
for details.

Figure-3 Project-02 LNG-fuelled car carrier vessel (image)

Page 12 of 26

Table-2 Summary of Project-01, 02 LNG-fuelled car carrier vessels
Project Name:
Estimated allocation:

Car Carrier Vessel Project 1

Car Carrier Vessel Project 2

Approx. JPY 18 billion for construction of two carriers

Total length:

Approx. 199.99 m

Approx. 199.99 m

Mould width:

Approx. 38.00 m

Approx. 38.00 m

Approx. 7,000 units

Approx. 7,000 units

Approx. 77,900 tonnes

Approx. 72,800 tonnes

Around the 3rd quarter of 2025

Around the 2nd quarter of 2023

CO2 Reduction rate: 26.1%
SOx reduction rate: 97.6%
NOx reduction rate: nochangeCO2 Reduction rate: 28.8%
SOx reduction rate: 99.2%
NOx reduction rate: 76.3%

Maximum number of loadable
cars:
Gross tonnage:
Scheduled completion:
Estimated environmental
benefits:(Compared to those by heavy oilfuelled vessels of similar size)

Page 13 of 26

Project 03: Part of the funding for the construction of an LPG-fuelled VLGC (VeryLarge Gas Carrier)-

The LPG-fuelled carrier is a transition project that is consistent with the Transition
Strategy set out in the NYK Group ESG Story 2022.

-

Construction which started in February 2021 has completed in January 2023 and thevessel is currently in service.

-

This carrier is expected to significantly reduce environmental impact by using LPG as
fuel, instead of heavy oil, which contributes to the reduction of greenhouse gas
emissions. In addition, the LPG carried as cargo is an alternative to existing energy
sources and emits less CO2 than crude oil, coal, etc., and thus plays an important rolein terms of supplying low-carbon fuels to society. Measures to avoid lock-in can
include improvement of operational efficiency, energy-saving technologies, increased
use of bio and synthetic fuels, and utilization of carbon offsets.

-

As possible environmental benefits, CO2 and SOx reduction rates, compared to thoseby heavy oil-fuelled vessels of similar size, have been calculated. See Table-3 fordetails.

Photo-1 Project 03 LPG-fuelled VLGC

Page 14 of 26

Table-3 Project 03 LPG-fuelled VLGC
Project Name:
Estimated allocation:

LANTANA PLANET
Around JPY 2 billion

Total length:

Approx. 230.00 m

Mould width:37.20 mDepth (type):

21.90 mSummer full draft (type):

11.60 mLoading capacity:
Date of completion of construction:
Estimated environmental benefits:(Compared with fuel oil-fuelled vessels ofsimilar size)

Page 15 of 26

Approx. 86,500 m3 (including 2,500 m3
deck tank capacity)
Jan 2023 (in service)
CO2 reduction rate: 12.6%
SOx reduction rate: 96.2%
NOx reduction rate: no changeGBP・GBGLs-4.

Reporting

DNV confirms that NYK will report (annual reporting) on the Transition Bond (#2) until theproceeds are fully allocated, and disclose information on the status of the allocation, theprojects to which the proceeds have been allocated or the environmental benefits on theissuer’s website.
DNV confirmed that, even after allocation have been completed, NYK plans to report any
changes in Transition Strategy or pathways, or any major changes in the allocation plan or
project implementation status, in a timely manner in NYK’s reporting.
<Allocation status>•

Allocated amount•

Balance of unallocated amount•

Approximate amount of the proceeds allocated for refinancing<Environmental benefits> * Any or all of the following will be disclosed
Project

Reporting item
・ Introduction record (number of vessels) and specifications of SEP and
CTV・ Location, cardinal numbers and capacity (kW) of introduced offshore
wind power generation
・ Cardinal numbers and capacity (kW) of introduced wind power
generation
・ Capacity of Solar PVs (kW)01Offshore Wind Power

02

Green Terminal

03

Ammonia fuelled vessel

・ Numbers and main specifications of ammonia fuelled vessels

04

Hydrogen fuelled cell
vessel・ Numbers and main specifications of Hydrogen fuelled cell vessels

05

LNG fuelled vessel

06

LNG fuel supply vessel07

LPG fuelled vessel

08

Operation efficiency &optimization

・ Number and main specifications of LNG fuelled vessels
・ GHG emissions (mt/vessel/year)
・ GHG ・ CO2 ・ SOx ・ NOx emission reduction amount or ratio comparedto the case of using HFO (heavy fuel oil)・ Number and main specifications of LNG fuel supply vessels
・ GHG emissions (mt/vessel/year)
・ GHG ・ CO2 ・ SOx ・ NOx emission reduction amount or ratio comparedto the case of using HFO (heavy fuel oil)・ Number of LPG fuelled vessels ・ Main specifications
・ GHG emissions (mt/vessel/year)
・ GHG ・CO2 ・ SOx ・emission reduction amount or ratio compared tothe case of using HFO (heavy fuel oil)・ GHG / CO2 / SOx / NOx emission reductions or ratios before and after
the introduction of equipment and systems compared to standard
operations

Page 16 of 26

Use of Proceeds reporting:☐

Project-by-project☒

On a project portfolio basis☐

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

Information reported:☒

Allocated amounts☐

Other (please specify):☐

TB refinanced share of total investment

Frequency:☒

Annual☐Other (please specify):☐

Semi-annual

Impact reporting (Environmental Impact):☐

Project-by-project☒

On a project portfolio basis☐

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

Frequency:☒

Annual☐☐Other (please specify):

Semi-annual

Information reported (expected or ex-post):☒

GHG Emissions / Savings☐☒

Other ESG indicators (please specify):

Energy savings

SOx, NOx emission reductions

Means of Disclosure:☐

Information published in financial☐

report (Integrated Report)☐

Information published in ad hoc

Information published in sustainability
report☒Other (please specify): on NYK website

documents☐

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

Page 17 of 26

VI. Assessment Conclusion
On the basis of the information provided by NYK and the work undertaken, it is DNV’sopinion that the NYK Transition Bond (#2) meets the criteria established in the Protocol, andthat is aligned with the following stated definition or purpose of the bonds that specify theuse of proceeds within the CTFH/CTFBG and GBP/GBGLs:“provide an investment opportunity with transparent sustainability credentials”“enable capital-raising and investment for new and existing projects with environmental
benefits”
DNV Business Assurance Japan K.K.
22 June 2023

Mark Robinson

Naoki Maeda

Manager, Sustainability Services

Managing Director

DNV Business Assurance, Australia

DNV Business Assurance Japan K.K.

Masato Kanedome

Jun Chokai

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.
Disclaimer
Responsibilities of the Management of the Issuer and the Second-Party Opinion Providers, DNV: The management ofIssuer 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 Issuer management and other interested stakeholders in the Bond
as to whether the established criteria have been met, based on the information provided to us. In our work we haverelied on the information and the facts presented to us by the Issuer. DNV is not responsible for any aspect of thenominated assets referred to in this opinion and cannot be held liable if estimates, findings, opinions, or conclusions areincorrect. Thus, DNV shall not be held liable if any of the information or data provided by the Issuer’s management andused as a basis for this assessment were not correct or complete

Page 18 of 26

Schedule-1 NYK Transition Bond (#2) Eligible Projects
Category*1

Project*1

Project Overview

Expected Environmental Benefits

Partial funding for the construction of two LNG-fuelled car carriers
Project Name:

LNG fuelled
vesselExpenditure on LNGfuelled vessels (incl.
capital investment,
research anddevelopment, businessdevelopment andoperations, working
capital)

Total length:
Mould width:
Maximum numberof loadable cars:
Gross tonnage:
Scheduledcompletion:

Car Carrier Vessel
Project 1
Approx. 199.99 m
38.00 mApprox. 7,000 units
Approx. 77,900
tonnesAround 3rd quarterof 2025

Car Carrier Vessel
Project 2
Approx. 199.99 m
38.00 mApprox. 7,000
units
Approx. 72,800
tonnesAround 2ndquarter of 2023

Project Name:
CO2 reductionrate:
SOx reductionrate:
NOx reductionrate:

Car Carrier
VesselProject 1

Car Carrier
Vessel Project
2

26.1%

28.8%

97.6%

99.2%

No change

76.3%

Partial funding for the construction of LPG-fuelled VLGCs

LPG fuelled
vesselExpenditure on LPGfuelled vessels (incl.
capital investment,
research anddevelopment, businessdevelopment andoperations, working
capital)Project Name:
Total length:
Mould width:
Depth (type):
Summer full draft(type):LANTANA PLANET
Approx. 230.00 m
37.20 m21.90 m11.60 mLoading capacity:

Approx. 86,500 m3(Including 2,500 m3 deck tank capacity)

Scheduledcompletion:

Jan 2023 (in service)*1: Excerpted from the NYK Green/Transition Bond Framework.
Page 19 of 26

Project Name:
CO2 reductionrate:
SOx reductionrate:
NOx reduction
rate:

LANTANA PLANET
12.6%
96.2%
No change

Schedule-2 Green Bond Eligibility Assessment Procedure
The following checklist (GBP-1 ~ GBP-4) are DNV's Assessment Procedure created for NYK’s Green Bond Eligibility Assessment basedon the requirements of GBP and GBGLs. "Document review" in the work undertaken includes internal documents of issuer and isprovided by NYK as evidence of eligibility judgment for DNV.
Note that in Schedule-2, the term GBP is used practically, while it means hereby the standards and requirements referred in thefundraising for the green and transition projects in the transition bonds which specify the use of funds on base of CTFH and CTFBG.

GBP-1 Use of Proceeds
Ref.

Criteria

1aType of bonds

1b

Green/transiti
on project
categories

Requirements

Work Undertaken

DNV Findings

Types of transition bonds are classified into
one of the following types defined by GBP.
· (Standard) Transition Bond・ Transition Revenue Bond・ Transition Project Bond・ OtherDocuments reviewed-Framework

Through the evaluation work, DNV confirmed that NYK
Transition Bond (#2) falls into the following category:Interviews withstakeholders(Standard) Transition BondThe key to a green/transition bond is thatthe proceeds will be used for transition
projects, which should be properly stated in
the legal documents relating to the security.

Documents reviewed-Framework-NYK green/ transition
project document

DNV confirmed that the NYK Transition Bond (#2) aims tofund LNG fuelled and LPG-fuelled vessels within a wide
range of green/transition projects focused on NYK Group's
environmental goals, as described in the Framework.
DNV confirmed specifically that all transition projects listedin Schedule-1 were evaluated as conforming to theTransition Strategy, and the proceeds through thetransition bonds are planned to be allocated to LNG fuelledand LPG fuelled vessels.

Interviews withstakeholders

Page 20 of 26

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
Through the assessment, DNV concludes that theTransition project will provide tangible and genuinely
environmental benefits.
Of the NYK project categories listed below, those to which
the current funding is allocated are highlighted in yellow.
Project classification

1c

Environmental
benefits

All green/transition projects to which thefunds are used should have clear
environmental benefits, and the effects ofwhich should be assessed by the issuer and,
where possible, quantitatively demonstrated.

Documents reviewed-Framework-NYK green/ transition
project document
Interviews withstakeholders

Page 21 of 26

01

Offshore Wind Power

02

Green Terminal

03
04

Ammonia fuelled vessel
Hydrogen fuelled cell
vessel05

LNG fuelled vessel

06

LNG fuel supply vessel07

LPG fuelled vessel

08

Operation efficiency &optimization

Category
Renewable energy

Fuel switching,Technologicalinnovation, Clean
transport
Fuel switching,Technologicalinnovation, Clean
transport
Clean transport,
Energy conservation

DNV confirmed that NYK's transition projects haveenvironmental benefits, including CO2 emission reduction
rates, through the projects listed under 1b and contributeto the targets under the NYK Group Transition Strategy.
DNV also confirmed that the environmental benefits are toquantitatively assessed by CO2 emission reduction rates
and reported annuallyRef.

Criteria

Requirements

Work Undertaken

DNV Findings

1dRefinancing
share

If all or part of the proceeds are used or
may be used for refinancing, the issuer will
indicate the estimated ratio of the initialinvestment to the refinancing and, whereappropriate, it is recommended to clarify
which investment or project portfolio issubject to refinancing.

Documents reviewed-Framework-NYK green/ transition
project document

DNV confirmed that NYK plans to use the funds raised forboth newly financing and refinancing the nominatedprojects, i.e., LNG-fuelled, and LPG-fuelled vessels.
DNV confirmed that through the annual reports NYK
intends to disclose the estimated amount (or percentage)of the funds that was allocated for refinancing.

Interviews withstakeholders

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GBP-2 Process for Project Selection and Evaluation
Ref.

Criterion

2aProject
selection
process2b

Requirements

Work Undertaken

Green/Transition Bond issuers should outline
the process by which they have determinedthe eligibility of projects for which Green/
Transition Bond proceeds are to be used.
This should include (but not be limited to)・ The process by which the issuer determinesthat an eligible project falls within thebusiness category of an eligible Green/
Transition project.
・ Creation of criteria for eligibility of projects
for which green/transition bond funding will
be used・ Environmental sustainability goals
Issuer's
In addition to criteria and certifications, theenvironmental
information published by issuers regarding
and social
the green/transition bond process also
governanceconsiders the quality of performance of theframework
issuer's framework and environmental
sustainability.

Documents reviewed-Framework-NYK Green/Transition
Bond Selection andAssessment Procedure

DNV Findings
DNV confirmed that the Framework sets out the process bywhich NYK determines the eligibility of a project to use
Transition Bond procurement funds, and that it has
assessed the eligibility of this bond in accordance with the
Framework.

Interviews withstakeholders

Documents reviewed-Framework-NYK Green/Transition
Bond Selection and
Evaluation Assessment
ProcedureInterviews withstakeholders

Page 23 of 26

DNV confirmed that the transition projects implemented by
NYK are in line with NYK's management and environmental
policies and consistent with the Transition Strategy, targets
and pathways.
DNV confirmed through the review of documents including
the Framework and interviews with relevant stakeholders
that NYK is working on the conservation of the surrounding
environment through the relevant departments in the
management and implementation of the project, and that it
has implemented or plans to implement regular monitoringin the PDCA cycle.

GBP-3 Management of Proceeds
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

3aTracking
procedure - 1

The net proceeds from green/transition
bonds should be managed in sub-accounts,
incorporated into a sub-portfolio, or
otherwise tracked by other appropriate
means. It should also be evidenced by theissuer in a formal internal process related
to the issuer's investment and financing
operations for the green/transition project.

Documents reviewed-Framework-Accounting
management regulations,accounting management
systems
Interviews withstakeholders

The net proceeds from transition bonds are incorporated into
a common account of NYK, and the status of allocation istraceable on s project basis through internal systems anddocuments.
DNV has verified the actual systems in use and the relevant
documents, etc., and confirmed that the management offunds procurement can be proven on this basis.

3b

Tracking
procedure -２

During the redemption period of thegreen/transition bonds, the balance of theproceeds being tracked should be adjusted
at regular intervals to match the amountallocated to eligible projects undertaken
during that period.

Documents reviewed-Framework-Accounting control
documents
Interviews withstakeholders

DNV confirmed that NYK regularly (at least once a year)
reviewed the balance of the transition finance using theaccounting systems / documents described in 3a during theperiod from issuance to redemption of transition bond.

3c

Temporaryholdings

If no investment or payment has yet been
made for a nominated green/transition
project, the issuer should also inform theinvestor of the possible temporary
investment method for the balance of
unallocated funds.

Documents reviewed-Framework-Accounting control
documents

Through the verification of NYK's internal systems anddocuments and workflows DNV confirmed that the balanceof unallocated funds was recognized sequentially.
DNV confirmed through the Framework and the assessmentthat the balance of unallocated funds was managed in cash
or cash equivalents. DNV also confirmed that the balance of
unallocated funds will be disclosed through the reporting of
the status of allocation.

Interviews withstakeholders

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GBP-4 Reporting
Ref.

Criteria

4aPeriodical
Reporting

Requirements

Work Undertaken

In addition to the ad-hoc investment reportingfor fund utilization and refinance, the issuer
will provide at least once a year the list of
projects funded by the green/transition bondin consideration of the following:-Confidentiality and competitive
considerations-Outline of each project, expected sustainable
environmental and social benefits

Documents reviewed-Framework-NYK Green/Transition
project documents

DNV Findings
DNV confirmed that NYK will carry out reporting of transition
bonds annually until the proceeds are fully allocated and so
by will disclose the status of the allocation of funds and theenvironmental benefits.
DNV confirmed that NYK will disclose environmental benefits
by some or all of the items in the table below, within thelimits of confidentiality and as long as they are reasonably
practicable.
<Allocation status>
 Allocated amount Balance of unallocated amount Approximate amount of the proceeds allocated forrefinancing<Environmental benefits> *See table below

Table Green/Transition project environmental benefits (recipients of this funding allocation highlighted in yellow)

No.

Project Classification

01

Offshore Wind
Power

02

Green Terminal

Self-elevating work platform (SEP), Crewtransport vessels (CTVs)
New establishment and expansion ofGreen Terminal

Page 25 of 26

Record of Equipment
introduction(Capacity, cardinal
number, number ofvessels)

GHG, CO2
Emission
Reductions

SOx, NOx
Emission
Reductions

✔＊1＊2

-

-

✔＊2

-

-

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

Ammonia
Ammonia-based liquefied ammonia✔＊3
fuelled vessel
carrier and tugboat
HydrogenIntroduction of ships equipped with high04
fuelled cell✔＊3
power hydrogen fuelled cells
vessel
LNG fuelled
LNG fuelled vessels *excluding existing
05
✔＊3
✔＊4
✔＊5
vesselfossil fuelled transportation
LNG fuel supply
06
LNG bunkering vessel
✔＊3
✔＊4
✔＊5
vessel
LPG fuelled
07
LPG fuelled vessel
✔＊3
✔＊4
✔＊5
vesselOperation
Software development, etc. that supports
08
efficiency &✔*6✔＊5operational efficiency and optimization
optimization* 1: Introduction record (number of vessels) and specifications of SEP vessels and CTV* 2: Number of units and power generation capacity (MW) of the offshore wind power generation, onshore wind power generation andsolar power generation introduced* 3: Number and main specifications of vessels built according to the project classification* 4: GHG / CO2 emission reduction amount or ratio compared to the case of using heavy oil as fuel (Including planned values)* 5: SOx and NOx emission reduction amount or ratios compared to the case of using heavy oil as fuel (Excluding NOx for LPG fuelled
vessel)* 6: GHG / CO2 / SOx / NOx emission reduction amount or ratios before and after the introduction of equipment and systems
compared to standard operations
03

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NYK LINE Green/transition Bond Framework and Transition Bond

SECOND PARTY OPINION

NYK LINE
GREEN/TRANSITION BOND FRAMEWORK &TRANSITION BOND
Prepared by: DNV Business Assurance Japan Co., Ltd.
Location: Kobe, Japan
Date: July 1, 2021
Ref. Nr.: PRJN-258246-2021-AST-JPN

This report was prepared in the “Climate Transition Finance Model Project in FY2021 (Investigation of ideal
way of Transition Finance)” which is a commissioned project by the Ministry of Economy, Trade and Industry.

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NYK LINE Green/transition Bond Framework and Transition Bond

Executive Summary
Nippon Yusen Kabushikikaisha, also known as NYK Line (hereinafter, NYK) is one of theworld's leading shipping companies, founded in 1885. Currently, the NYK Group runs thegeneral freight transportation business, which consists of the liner trade business, air cargotransportation business, and logistics business, as well as the bulk shipping business, realestate business, and other businesses.
NYK Group set and issued the "NYK Group ESG Story" in February 2021 to promote ESG
management that enables both maximization of earnings and environmental and social
sustainability concurrently. NYK Group ESG Story sets out important issues (materiality),priority goals (action plans) including the environment, and also sets out initiatives related tocontributions to the SDGs.
NYK Group would positions the climate transition strategy that NYK Group intends to achievegreenhouse gas emission reduction targets of International Maritime Organization (IMO), which
is an international organization in the shipping industry, and the Ministry of Land,
Infrastructure, Transport and Tourism's (Maritime roadmap), etc., and NYK Group's certified
SBT, as well. NYK Group intends to raise green/transition bond for these activities as anopportunity to disseminate the NYK Group's environmental efforts to its stakeholders.
NYK Group has established the NYK Green/transition Bond Framework (hereinafter,
Framework) in order to carry out this green/transition bond in a manner that conforms to theinternationally recognized framework (handbook, principles, guidelines, etc.).
DNV Business Assurance Japan Co., Ltd. (hereinafter, DNV), as an external reviewer, evaluatedthe eligibility of the framework and the NYK Transition Bond (hereinafter, Transition Bond).
Specifically, DNV provided the eligibility evaluation for frameworks and transition bonds against
the following handbook, principle and guidelines which are widely recognized:--

Climate Transition Finance Handbook(International Capital Markets Association, 2021 hereafter, CTFH)
Basic guidelines on Climate Transition Finance(Financial Services Agency, Ministry of Economy, Trade and Industry, Ministry of theEnvironment, 2021 hereafter, CTFBG)
Green Bond Principles(International Capital Markets Association, 2021 hereafter, GBP)
Green Bond Guidelines(Ministry of the Environment, 2020 hereafter, GBGLs)

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

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NYK LINE Green/transition Bond Framework and Transition Bond

CTF-1. Issuer’s Climate Transition Strategy and Governance:
The transition strategy of the issuer NYK Group is consistent with the environmental goals
set by IMO and the Ministry of Land, Infrastructure, Transport and Tourism, etc. and isbased on the transition pathway clarified by SBTi. In addition, as governance anddisclosure related to execution of the finance, an internal system and an information
disclosure process based on TCFD * has been established. Furthermore, the contribution
to the SDGs, which will be described later, is also taken into consideration. These aredisclosed within the framework and satisfy the disclosure elements of CTF-1.
* TCFD: Task Force on Climate-related Financial Information Disclosure

CTF-2. Business model environmental materiality:
The planned transition strategies and transition pathway are associated with the NYK
Group's priority goals and materiality. These are disclosed within the framework and satisfy
the disclosure elements of CTF-2.
CTF-3. Climate transition strategy to be science-based including targets and pathways:
NYK's transition strategy is defined by science-based targets and pathways. Specifically,
NYK applies the targets set by IMO, Ministry of Land, Infrastructure, Transport andTourism, SBT, etc. as described in CTF-1, in addition to the long-term goals, the short- andmedium-term goals, the process to achieve the goals, and the positive environmental
impact of the target project are the criteria for evaluation. It is qualified and quantified
along with the baseline for the evaluation. These are disclosed through the framework or
second party opinion and satisfy the disclosure elements of CTF-3.
CTF-4. Implementation transparency:
NYK has established an internal management system and process for determining basic
investment plans for executing transition strategies. For future overall and individual
investment plans, it was confirmed that the investment required to execute the transition
strategy will be executed based on the internal management system and process inconsideration of CTF-1 to CTF-3. Details of the investment plan will be disclosed as
required by CTF-4 when utilizing the upcoming green/transition bond. These are disclosed
through the Framework etc., or this Second Party Opinion and satisfy the disclosure
elements of CTF-4.

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NYK LINE Green/transition Bond Framework and Transition Bond

GBP-1. Use of Proceeds:
NYK defines the eligibility criteria for the use of proceeds as green/transition projects thatmeet the requirements of transition strategies and related frameworks. Specifically, it
refers to project, to directly and indirectly contribute to and support the fuel conversion andtechnology innovation of ships and vessels, and projects related to the energy efficiency ofequipment related to the ships and vessels operation and renewable energy. The proceeds
will be used for capital investment, R&D, business development/operating, working capital,
or multiple of these projects as new financing and refinancing of new or existing
expenditures. These projects have been evaluated that they will have clear environmental
impact on the transition strategy, and are expected to contribute to the SDGs. These
processes are in compliance with GBP-1.
GBP-2. Process for Project Evaluation and Selection:
NYK ensures that the Green/transition projects meet the GBP-1 eligibility criteria and do
not conflict with the pre-defined exclusion criteria in the framework. Specifically, theEnvironment group and the Finance group evaluate and select projects based on acomprehensive analysis of finance, technology, and market environment, and the final
decision is made by the executive officer in charge of finance. These processes are incompliance with GBP-2.
GBP-3. Management of Proceeds:
The finance group manages the proceeds for each project using the internal system andforms. The proceeds will be allocated within 2 years from bond issuance. In addition, theunallocated amounts of the proceeds are managed in cash or cash equivalents until the
allocation.
GBP-4. Reporting:
NYK plans to report on the status of proceeds allocation and environmental impacts
through NYK Group website until the full amount of the proceeds is allocated. This includes
the allocated amount, unallocated amount (new/refinancing), allocated project outline,
greenhouse gas emission reduction amount or ratio (%) and other qualified indicators andquantified value of environmental impacts for each project category. For ongoing projects,
progress and expected environmental impacts will be reported. Any major changes intransition strategies, pathways, allocation plans or performance will also be reported in atimely or reporting manner.

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NYK LINE Green/transition Bond Framework and Transition Bond

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

Offshore Wind
Power *1

Category*2*3-

02

Green Terminal *1

03

Ammonia fueled
vessel *1-

04

Hydrogen fueled
vessel *1-

LNG fueled vessel
LNG fuel supply
vessel

-

05
06
07

LPG fueled vessel

08

Operation
efficiency &optimization-

Renewable Energy

Fuel Conversion
Technology
Innovation
Clean
Transportation
Fuel Conversion
Technology
Innovation
Clean
Transportation
Cleantransportation,energy efficiency

Project Overview & Target Activities- Self Elevating Platform(SEP)- Crew Transport Vessel(CTV)- New construction andexpansion of the Green
Terminal- Ammonia-fueled liquefied
ammonia carrier andtugboat- Introduction of ships
equipped with high-powerhydrogen fueled cells- LNG fueled vessel- LNG bunkering vessel- LPG fueled vessel

Contribution
to SDGs

Targetactivities:-Capital
investment-R&D funding-Businessdevelopment-Business
operating-Working
capital, etc- Technology developmentthat contributes tooperational efficiency andoptimization* 1 Project 01 to 04 have been evaluated as green project.
* 2 Projects that have been confirmed to be eligible as green projects can be incorporated into green bond, and in addition,
they are admitted by CTFBG to be incorporated as part of transition bond.
* 3 Projects that are currently categorized as transition projects can be regarded as green projects due to the application andapplication of future technological innovations (e.g., application of green fuel, achievement of performance that meets CO2
emission standards as a green project, etc.)

DNV confirmed that the framework meets the criteria required by the relevant handbook,principles and guidelines and is eligible by evaluation based on related documents andinformation provided by NYK including the framework. DNV also confirmed that Transition Bondis expected to be properly planned and implemented in accordance with this framework.

5

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NYK LINE Green/transition Bond Framework and Transition Bond

CONTENTS
Executive Summary

2

Ⅰ Introduction

8

Ⅱ Scope and Objectives

15

Ⅲ Responsibilities of NYK and DNV

16

Ⅳ Basis of DNV’s opinion

17

Ⅴ Work Undertaken

18

Ⅵ Findings and DNV’s opinion

19

Ⅶ Assessment Conclusion

30

Schedule-1 NYK Green/Transition Bond Nominated Project32

Schedule-2 Climate Transition Finance Eligibility Assessment Protocol

33

Climate Transition Finance Handbook Alignment

33

Schedule-3 Green Bond Eligibility Assessment Protocol

36

GBP-1 Use of Proceeds

36

GBP-2 Process for Project Evaluation and Selection38

GBP-3 Management of Proceeds

39

GBP-4 Reporting

40

Schedule-4 Basic Guidelines on Climate Transition Finance Eligibility checklist

42

CTF-1 Fundraiser’s Climate Transition Strategy and Governance42

CTF-2 Business Model Environmental Materiality49

CTF-3 Climate Transition Strategy to be Science-based Including Targets and Pathways

51

CTF-4 Implementation Transparency

55

Schedule-5 Green Bond Guidelines Eligibility Assessment

60

GBGLs-1 Use of proceeds

60

GBGLs-2 Process for Project Evaluation and Selection

63

GBGLs-3 Management of proceeds

66

GBGLs-4 Reporting

69

Reference GBGLs-5 External Review

72

Reference document list

75

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NYK LINE Green/transition Bond Framework and Transition Bond

Disclaimer
Our assessment relies on the premise that the data and information provided by Issuer to us as part of our review procedures have been
provided in good faith. Because of the selected nature (sampling) and other inherent limitation of both procedures and systems of internal
control, there remains the unavoidable risk that errors or irregularities, possibly significant, may not have been detected. Limited depth ofevidence gathering including inquiry and analytical procedures and limited sampling at lower levels in the organization were applied as per scopeof work. DNV expressly disclaims any liability or co-responsibility for any decision a person or an entity may make based on this Statement.

Statement of Competence and Independence
DNV applies its own management standards and compliance policies for quality control, in accordance with ISO/IEC 17021:2011 - Conformity
Assessment Requirements for bodies providing audit and certification of management systems, and accordingly maintains a comprehensive
system of quality control, including documented policies and procedures regarding compliance with ethical requirements, professional standards
and applicable legal and regulatory requirements. We have complied with the DNV Code of Conduct1 during the assessment and maintainindependence where required by relevant ethical requirements. This engagement work was carried out by an independent team of sustainability
assurance professionals. DNV was not involved in the preparation of statements or data included in the Framework except for this Statement.
DNV maintains complete impartiality toward stakeholders interviewed during the assessment process.
1 DNV Code of Conduct is available from DNV website (www.DNV.com)

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NYK LINE Green/transition Bond Framework and Transition Bond

Ⅰ Introduction
i. About the issuer
Nippon Yusen Kabushikikaisha, also known as NYK
Line (hereinafter, NYK) is one of the world's leading
shipping companies, founded in 1885. Currently, the
NYK Group runs the general freight transportation
business, which consists of the liner trade business,
air cargo transportation business, and logistics
business, as well as the bulk shipping business, realestate business, and other businesses.
ii. NYK’s Environmental Initiatives
The NYK Group established the "NYK Group ESG
Story" in February 2021 to promote ESG
management that enables both maximization of
earnings and social / environmental sustainability
concurrently. NYK publishes its ESG activities on its
website. The NYK Group ESG Story sets out
environmental important issues (materiality), priority
goals (action plans), of the NYK Group, and also setsout initiatives related to contributions to the SDGs.
In addition, in order to steadily carry out ESG
management, NYK is now working on both theinternal system and implementation aspects, such as
new ESG Management Committee establishment

Figure 1 NYK Group ESG management

NYK Group ESG story︓https://www.nyk.com/english/esg/esg-story/
NYK Report 2020︓https://www.nyk.com/english/ir/pdf/2020_nykreport_all_print.pdf
ESG management︓https://www.nyk.com/english/esg/

Figure-2 ESG Management Committee of NYK Group

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NYK LINE Green/transition Bond Framework and Transition Bondiii. About the Framework
To progress environmental initiatives, NYK Group implements Green/Transition bond as
funds raising which promote activities aimed at achieving the environmental goals of theinternational Maritime Organization (IMO), an international organization in the shipping
industry, and the Ministry of Land, Infrastructure, Transport and Tourism, etc.*1, and NYK
Group positions these kind of funds raising as an opportunity to inform NYK Group initiative
to stakeholders. NYK Group has established the NYK Green/Transition Bond Framework(hereinafter, Framework) to implement it in a manner that meets the internationallyestablished framework.
This framework will be available for the NYK Group's future green/transition bondimplementation. The framework that the NYK Group specifically referred to when
formulating this framework is described in Section II (3) below.
*1:”Initial IMO GHG Strategy” and “Roadmap to Zero Emission from International Shipping” prepared by
JSTRA, MLIT (Ministry of Land, Infrastructure, Transport and Tourism), and other maritime organizations.

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NYK LINE Green/transition Bond Framework and Transition Bondiv. Issuer’s Contribution to the SDGs
Figure-3 shows the overall image of NYK Group’s efforts toward SDGs.
Table-2 shows the major SDGs related to this Green/transition Bond.
NYK Group is working to resolve the issues of the 6 out of 17 targets in order to contributeto the achievement of SDGs through its business activities. This Green/transition Bond isdirectly and indirectly contributing to energy, industry and technology innovation, andclimate change.

Figure-3 NYK Group’s efforts for SDGs (Medium-term management plan, March 2018)

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

Main Themes

Main activities

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

Innovation

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

Safe operation andreduction ofEnvironmental burden
Conversion to nextgeneration fuels

SDGs

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

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NYK LINE Green/transition Bond Framework and Transition Bond

v. Issuer’s Transition strategy for decarbonization(1) Strategies by sector (industry) at theinternational/national /regional level
Figure-4 shows the outlines of IMO’s GHG
emission reduction targets and theirpathway. IMO focuses on measures foremission reduction, by design andtechnology (reduction of fuelconsumption), improvement of operation
efficiency technological innovation and fuelconversion (introduction of lowcarbon/zero-carbon fuel) and various
technologies.
Also, IMO has set a target of 40%
reduction in average fuel consumption perunit transportation in 2030 as an index
corresponding to the short- and mediumterm target, and has set a target of atleast 70% reduction by 2050 as an index
equivalent to the long-term target (bothbaselines are 2008).

Figure-4 IMO International Maritime Organization
The GHG emission reduction targets and pathway*Above︓IMO website, Below︓NYK

In March 2020, NYK has collaborated
with the Ministry of Land,
Infrastructure, Transport and Tourism,
as well as the shipping, shipbuilidng, and marine maritime industires, research institutes,
and publi institutions to create a “Roadmap to Zero Emission from Internaional Shipping”(Sponsored by Japan Ship Technology Research Association).＊1 This roadmap shows
Japan’s efforts (international treaty formmulation, technological development) in a mannerconsistent with the goals of the IMO.

NYK Group has set GHG eission reduction targets, including fuel conversion, as a low-carbon
and decarbonization strategy for its core businesses, based on international and national
policies, such as IMO and MLIT (Ministry of Land, Infrastructure, Transport and Tourism).
Ministry of Land, Infrastructure, Transport and Tourism (maritime) 、 Roadmap to Zero Emission from International Shipping︓
https: //www.mlit.go.jp/maritime/GHG_roadmap.html
https://www.mlit.go.jp/common/001354314.pdf

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NYK LINE Green/transition Bond Framework and Transition Bond

*1 Reference Figure: Roadmap to Zero Emission from International Shipping from MLIT website
https: //www.mlit.go.jp/maritime/GHG_roadmap.html
https://www.mlit.go.jp/common/001354314.pdf

above: Overview of IMO Strategy
below: Timeline for the Introduction of Alternative Fuels and Technologies Used in Emission Pathways

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NYK LINE Green/transition Bond Framework and Transition Bond

(2) Strategies of the Issuer
The NYK Group positions the activities tocontribute to the above-mentioned IMO andthe MLIT GHG emission reduction target,
and the activities aimed at achieving the
NYK Group’s certified SBTi as its transition
strategies.
Figure-5 shows GHG emission intensity
reduction target of NYK Group (SBTi
certified).
NYK Group uses GHG emissions in 2015 as
the baseline (baseline of year and emission)and set a 30% reduction target by 2030 and
a 50% reduction target by 2050. Since it isdifferent from the baseline (2008) set by
IMO and MLIT, the notation of the reduction
percentage is different. Despite the fact,
the NYK Group’s GHG emission reduction
target is well above the targets of IMO andthe MLIT.

Figure-5 GHG emissions intensity reduction of NYK Group(SBT certified)Figure-6 shows the process of achieving
GHG emission reduction targets of NYK
Group.
In the process of achieving the GHG
emission reduction targets, NYK plans toachieve the target by promoting efficiency
and optimization through fuel conversion,
improvement of ships (hardware),improvement of operation (software), etc.
The NYK Group is also taking on thechallenge of the energy field as a new
business in order to realize the process ofachieving the goals set by SBT.

Figure-6 Process for achieving GHG emission reduction targetsof NYK Group

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NYK LINE Green/transition Bond Framework and Transition Bond

Figure-7 shows the Business Development Timeline in the Energy Field of NYK Group.
As an initiative to the energy sector, the NYK Group promotes the structuring of a newenergy value chain through a renewable energy business (offshore wind power generation)
which contributes to the GHG emission reduction, through R&D and demonstrations forbuilding a supply chain of hydrogen and ammonia, etc.
The overall strategy and details of these efforts are disclosed in “The NYK Group ESG Story”.

NYK Group ESG Story︓https://www.nyk.com/english/esg/esg-story/

Fogure-7 Business Development Timeline in the Energy Field of NYK Group(As an example, zero emission value chain image in the transportation of vehicles is also shown.)
The NYK Group ESG Story︓https://www.nyk.com/english/esg/esg-story/

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NYK LINE Green/transition Bond Framework and Transition BondⅡ Scope and Objectives
DNV will conduct a pre-issue eligibility assessment of the NYK Green / Transition Bond
Framework and Transition Bond. The objective of DNV’s assessment is to implement anassessment to confirm that the Bond meets the identified criteria of the standards CTFH, CTFBG,
GBP and GBGLs described below and applicable CBS related technical standards and otherrelevant criteria or guidelines (refer to the following), and to provide the issuer with independent
second-party opinion on the eligibility of the NYK Green/Transition Bond Framework andTransition Bond (BOND)*.
*This report (Second Party Opinion) was prepared by the “Climate Transition Finance Model Project in FY2021(Investigation of Transition Finance” which are adopted the project of Ministry of Economy, Trade and Industry.

DNV Business Assurance, as an independent external reviewer, has identified no real or perceived
conflict of interest associated with the delivery of this second-party opinion for NYK
In this report, no assurance is provided regarding the financial performance of the BOND, thevalue of any investments in the BOND, or the long-term environmental benefits of thetransaction.
(1) Scope of review
The review assessed the following elements and confirmed their alignment with the gist of GBP:☒

Use of Proceeds☒

Process for Project Evaluation and Selection☒

Management of Proceeds☒

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

Consultancy (incl. 2nd opinion)☐

Certification☐

Verification☐

Rating☐Other (please specify):

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NYK LINE Green/transition Bond Framework and Transition Bond

(3) Standards/guidelines to be applied
No.

Standards/guidelines

Scheme owner

Applied level*1*2

1.

Climate Transition Finance Handbook(CTFH)

International Capital Market
Association (ICMA), 2021

Apply

2.

Basic Guidelines on Climate Transition
Finance (CTFBG)

3.

The Green Bond Principles (GBP2021)

4.

Green Bond Guidelines (GBGLs2020)

5.

6.
7.

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

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

Apply
Apply

Ministry of Environment, 2020

Apply

Climate Bond Initiative, 2019

Refer
(applicable technicalstandards)

International Capital Market
Association (ICMA), 2020

Refer

International Capital Market
Association (ICMA), 2021

Refer

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

Ⅲ Responsibilities of NYK and DNV
NYK has provided the information and data used by DNV during the delivery of this review.
DNV’s statement represents an independent opinion and is intended to inform NYK and otherinterested stakeholders in the BOND as to whether the established criteria have been met, basedon the information provided to us. In our work we have relied on the information and the facts
presented to us by NYK. DNV is not responsible for any aspect of the nominated projects andassets referred to in this opinion and cannot be held liable if estimates, findings, opinions, orconclusions are incorrect. Thus, DNV shall not be held liable if any of the information or data
provided by NYK’s management and used as a basis for this assessment were not correct orcomplete.

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NYK LINE Green/transition Bond Framework and Transition BondⅣ Basis of DNV’s opinion
To provide as much flexibility for the issuer, NYK as possible, we have adapted ourgreen/transition bond assessment methodologies, which incorporates the requirements of the
CTFH, CTFBG, GBP and GBGLs, to create a NYK Green/Transition Bond Eligibility Assessment
Protocol (henceforth referred to as “Protocol”). (Refer to Schedule-2) The Protocol is applicableto CTFH, CTFBG, GBP and GBGLs based green/transition bond.
Our Protocol includes a set of suitable criteria that can be used to underpin DNV’s opinion. The
overarching principle and guidelines behind the criteria are that a green/transition bond should“enable capital-raising and investment for new and existing projects with environmental
benefits”.
As per our Protocol, the criteria against which the green/transition bond has been reviewed aregrouped into four common elements, represented by CTFH, CTFBG and GBP, and GBGLs:(1) Four elements of CTFH and CTFB (disclosure elements)•

Principle One: Issuer’s climate transition strategy and governance•Principle Two: Business model environmental materiality

The financing purpose should be for enabling an issuer’s climate change strategy.
The planned climate transition trajectory should be relevant to the environmentally-material partsof the issuer’s business model.
•

Principle Three: Transition is science-based including targets and pathway
Issuer’s climate strategy should reference science-based targets and transition pathways.

•

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

(2) Four elements of GBP and GBGLs (“green” can be converted “transition” here)•

Principle One: Use of Proceeds. The Use of Proceeds criteria are guided by the requirementthat an issuer of a green bond must use the funds raised to bond eligible activities. The eligible
activities should produce clear environmental benefits.

•

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

•

Principle Three: Management of Proceeds. The Management of Proceeds criteria are guided
by the requirements that a green bond should be tracked within the issuing organization, that
separate 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 atleast Sustainability Reporting to the bond investors should be made of the use of bond proceeds andthat quantitative and/or qualitative performance indicators should be used, where feasible.

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NYK LINE Green/transition Bond Framework and Transition BondⅤ Work Undertaken
Our work constituted a comprehensive review of the available information, based on theunderstanding that this information was provided to us by the issuer 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:

Green Bond pre-issue assessment(Green/Transition Bond Framework and Transition Bond)•

Creation of the issuer-specific Protocol, adapted to the purpose of the BOND, as describedabove and in Schedule-2 to this Assessment.

•

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

Discussions with the issuer, and review of relevant documentation;•

Documentation of findings against each element of the criteria.

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NYK LINE Green/transition Bond Framework and Transition BondⅥ Findings and DNV’s opinion
DNV’s findings and opinion are as below.
(1)-(4) are the findings and opinions of DNV against the four common disclosure elements of the
CTFH and CTFBG, and (5)-(8) are the findings and opinions of DNV against the four common
elements of GBP and GBGLs.

(1) Issuer’s climate transition strategy and governance
DNV confirmed that the framework is consistent with the NYK Group's transition strategy andthat the methods for achieving the transition target are consistent with efforts below the 2°C
goal. This transition strategy is well above the environmental targets set by the IMO and the
MLIT, etc. It is also based on the transition pathway clarified by the SBTi. (Fig.-4〜Fig.-7)
DNV also confirmed that NYK's transition execution plan is reliable, ambitious and achievable.
Specifically, as governance and disclosure related to execution, an internal system has been
established and an information disclosure process based on TCFD * has been established.
(Fig.-1〜Fig.-2)
In addition, the contribution to the SDGs, which will be described later, is also taken into
consideration. These are disclosed in the framework and satisfy the disclosure elements of
CTF-1 (Fig.-3, Table-2).

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

(3) Transition is science-based including targets and pathway
DNV confirmed that NYK Group's transition strategy was quantified and, in an absolutesense, built around a identified SBT model for sustainable CO2 emission reductions. The
transition pathway shown to reduce GHG emission is below the 2°C goal.
Specifically, NYK's transition strategy is defined by evidence-based goals and pathways.
Specifically, as described in CTF-1, in addition to the long-term goals, the short- andmedium-term goals, the process of achieving the goals, and the environmental
improvement effect of the target project are indexed and quantified together with the
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NYK LINE Green/transition Bond Framework and Transition Bondbaseline that serves as the evaluation criteria based on the IMO, Ministry of Land,
Infrastructure, Transport and Tourism, SBT, etc.
These are disclosed through the framework etc. or second party opinion and satisfy thedisclosure elements of CTF-3.

(4) Implementation transparency
DNV confirmed that the investment and deployment plans related to the NYK Group'stransition strategy include consensus building on investments made so far and future
investments and expenditures. DNV also reviewed the framework and NYK Group ESG
stories and confirmed that the execution was transparent and that the NYK Group explained
and agreed on the relevance of the execution.
Specifically, NYK has established an internal management system and process fordetermining basic investment plans for executing transition strategies, and it was confirmedthat the investment plans are executed through this internal management system andprocess. Details of the investment plan will be disclosed as required by CTF-4 when using
the upcoming green/transition finance. These are disclosed through the framework etc. or
second party opinion and satisfy the disclosure elements of CTF-4.

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NYK LINE Green/transition Bond Framework and Transition Bond

(5) Use of Proceeds

NYK defines the criteria applied to eligible projects (green/transition project) which meettransition strategy and relevant handbook, principle and guidelines, etc.
Specifically, it refers to projects to directly and indirectly execute and support the fuelconversion and technological innovation of ships, and projects related to energy saving ofequipment related to ship operation and renewable energy.
DNV confirmed that NYK will allocate the net proceeds from Green/Transition Bond,excluding expenses, as new investment and refinancing for capital investment, operating
expenses, and R&D related expenses for Green/transition eligible projects that meet theinvestment plan for executing the NYK Group’s transition strategy.
These are typical business transformation and qualified project categories such as CTFH,
CTFBG, GBP and GBGLs. These projects have been evaluated as having a clear
environmental improvement effect on the transition strategy, and are expected to contributeto the SDGs. These processes are in compliance with GBP-1.
「Renewable energy business」*1「Fuel Conversion」*2「Energy Saving Business」*1「Technology Innovation」*2「Clean Transportation」*1「Development and provision of products
and services in new fields」*2* 1 Typical green eligible project classifications illustrated by GBP and GBGLs. etc. Projects that are
currently confirmed eligibility as green projects can be incorporated into green finance and are also
permissible in the CTFBG to be incorporated as part of transition finance.
* 2 A typical transition project that meets the transition strategy of the issuer in CTFBG and is
exemplified as a business transformation that contributes to the realization of the Paris Agreement.
Projects that are currently classified as transition-eligible projects may become green projects due to theapplication of future technological innovations (e.g., application of green fuel, achievement of
performance that meets GHG emission criteria as a green project, etc.) New sector products and service
development and supply are relevant to the projects listed in table-3 entirely.

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

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NYK LINE Green/transition Bond Framework and Transition Bond

Table-3 NYK Green/transition Bond Nominated Project
Category*1*2

Project

Project Overview & Target Activities

Offshore Wind

01

Power

*1

- Self Elevating Platform(SEP)
EnergyGreen Terminal *1

02

Ammonia fueled

03

vessel*1

Hydrogen fueled

04

vessel*1

LNG fueled vessel05

LNG fuel supply

06

vessel- New construction and expansion of
the Green Terminal-

Fuel Conversion-

Technology- Ammonia-fueled liquefied ammonia
carrier and tugboat

Innovation- Introduction of ships equipped with

- Cleanhigh-power hydrogen fueled cells

Transportation-

Fuel- LNG fueled vessel

Tconversion-- LNG bunkering vessel

Technology
Innovation

07

LPG fueled vessel- Clean08

Operation efficiency-& optimization- Crew Transport Vessel (CTV)- Renewable- LPG fueled vessel

Transportation
Clean- Technology

transportation,

development

TargetActivities︓- Capital
investment- R&D- Businessdevelopment- Business
operation- Workingcapital etc.

that

contributes to operational efficiency- energy efficiency

and optimization

Use of proceeds categories as per GBP:☒

Renewable energy☒

Energy efficiency☐

Pollution prevention and control☐☐

Terrestrial and aquatic biodiversity
conservation
Sustainable water management☒

Sustainable management of living natural
resources
Clean transportation☐

Climate change adaptation

Eco-efficient products, production
technologies and processes

☐

☐
☐
☒
☒

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

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NYK LINE Green/transition Bond Framework and Transition Bond

Table-4 Green/transition Bond Representative Project Example (1/3)

No.

Project(Category)

Green/transition nominated projects (Example)

Self Elevating Platform (SEP)(Assets and projects that are essential
for installing offshore wind power
generation equipment. Used as
dedicated equipment）
Offshore wind01

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

02

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

Green Terminal

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

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NYK LINE Green/transition Bond Framework and Transition Bond

Table-4 Green/transition Bond Representative Project Example (2/3)

No.

03

Project(Category)

Ammonia

Green/transition nominated projects (Example)

AFAGC* Appearance image

fueled vessel

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

Ammonia fueled tugboat Appearance image
Hydrogen fueled cell vessel
Example: Demonstration projectfor practical use of a ship
equipped with a high-power fuelcell (hydrogen FC vessel)
Outline of the demonstration
project
1. Implementation of high-power
FC for ships and development ofoperation technology
2. Development of onboardhydrogen fuel supply system /equipment, development ofenergy management system(EMS) combining FC and storage
battery
3. Development of hydrogen fuelsupply system
4. Ship application, design anddevelopment

Hydrogen04

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

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NYK LINE Green/transition Bond Framework and Transition Bond

Table-4 Green/transition Bond Representative Project Example (3/3)

No.

05

Project

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

LNG fueled vessel

LNG fueled car carrier (image)06

LNG fuel supply
vessel
LNG fuel supply ship (Ship-to-Ship method)(image)07

Example: Ship-to-Ship(A method in which an LNG fuelsupply vessel is attached(sideways) to an LNG fueled
vessel moored at a quay / pieror an anchored LNG fueled
vessel to supply LNG fuel)<Outline of Vessel>
Gross tonnage: 50,000 tons
Fuel: LPG
Length overall: about 230.00m
Breadth: about 37.20m
Tank capacity: 84,000m3

LPG fueled vessel

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

NYK SUPER ECO SHIP 2050

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

LPG fueled VLGC (image)Operation

08<Environmental impact>
Compared to conventional
vessels of the same size, it isdesigned to significantly reduce
CO2.

efficiency &optimization

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

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NYK LINE Green/transition Bond Framework and Transition Bond

(6) Process for Project Evaluation and Selection
NYK confirms that the Green/transition project meets the GBP-1 eligible criteria and does notconflict with the pre-defined exclusion criteria in the framework. Specifically, theEnvironment Group and the Finance Group evaluate and select projects based on acomprehensive analysis of finance, technology, and market environment, and the final
decision is made by the executive officer in charge of finance.
Evaluation and selection:☒

Conforms to the issuer’s achievement of☒Documented process to determine that projects

environmental contribution goals☒

fit within defined categories

The project is eligible for use of proceeds☒

Documented process to identify and manage

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

ensured.
☒The project is evaluated and selected based☐

Other (please specify):

on the published standard summary

Information on Responsibilities and Accountability:☒

Evaluation / Selection criteria subject to☒In-house assessment

external advice or verification☐

Other (please specify):

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NYK LINE Green/transition Bond Framework and Transition Bond

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

The Finance Group registers and manages in a predetermined internal system based on
the report of the allocation status to eligible projects from the business division.
Allocation status is identified for each eligible project.
As an internal control process, the Finance Group organizes the allocation statusannually and reports it to the Chief Financial Officer (CFO) for approval.

This internal system and internal control process can track and confirm over the redemption
period, and the funds raised will be managed appropriately.
The proceeds will be allocated within two years of issuance. In addition, the amount ofproceeds will be managed in cash or cash equivalents in the same amount as theunallocated funds until the allocation.

Tracking of proceeds:☒

Some or all of the proceeds by green bonds that are planned to be allocated aresystematically distinguished or tracked by the issuer.

☒

Disclosure of intended types of temporary investment instruments for unallocatedproceeds☐

Other (please specify):

Additional disclosure:☐

Allocations to future investments only☒

Allocations to both existing and future
investments☒

Allocation to individual disbursements☐

Allocation to a portfolio of disbursements☐

Disclosure of portfolio balance of☒

Other (please specify): The amount of

unallocated proceeds

existing investment and new investment
and loan of the business subject to green
bond allocation will be disclosed in theannual report.

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NYK LINE Green/transition Bond Framework and Transition Bond

(8) Reporting
NYK plans to report on the status of allocation and environmental improvement effects (impact)
on the NYK Group website until the full amount of the proceeds is allocated. The report includes
the allocated amount, unallocated amount (finance/refinance), project outline, GHG emission
reduction amount or ratio (%) for each project category. Also, it will include relevant indicatorsand quantified environmental improvement effects for each project category. For ongoingprojects, progress and expected environmental improvement effects will be included. In
addition, if there is a significant change in the transition strategy or pathway, allocation plan or
project implementation status (e.g., interruption of the project that started allocation, significant
postponement on a yearly basis, sale or retirement, etc.), NYK will report it in a timely manner
or in its report.
<Allocation status>•

Allocated amount•

Balance of unallocated amount and its management•

Approximate amount (or share) of the proceeds being used for refinancing<Environmental Impact > * Any or all of the followings will be disclosed
Project

Reporting item
・ Introduction record (number of vessels) and specifications of SEP and
CTV・ Location, cardinal numbers and capacity (kW) of introduced offshore
wind power generation
・ Cardinal numbers and capacity (kW) of introduced wind power
generation
・ Capacity of Solar PVs (kW)01Offshore Wind Power

02

Green Terminal

03

Ammonia fueled vessel

・ Numbers and main specifications of ammonia fueled vessels

04

Hydrogen fueled cell
vessel・ Numbers and main specifications of Hydrogen fueled cell vessels

05

LNG fueled vessel

06

LNG fuel supply vessel07

LPG fueled vessel

08

Operation efficiency &optimization

・ Number and main specifications of LNG fueled vessels
・ GHG emissions (mt/vessel/year)
・ GHG ・ CO2 ・ SOx ・ NOx emission reduction amount or ratio comparedto the case of using HFO (heavy fuel oil)・ Number and main specifications of LNG fuel supply vessels
・ GHG emissions (mt/vessel/year)
・ GHG ・ CO2 ・ SOx ・ NOx emission reduction amount or ratio comparedto the case of using HFO (heavy fuel oil)・ Number of LPG fueled vessels ・ Main specifications
・ GHG emissions (mt/vessel/year)
・ GHG ・CO2 ・ SOx ・emission reduction amount or ratio compared tothe case of using HFO (heavy fuel oil)・ GHG / CO2 / SOx / NOx emission reductions or ratios before and after
the introduction of equipment and systems compared to standard
operations

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NYK LINE Green/transition Bond Framework and Transition BondUse of proceeds reporting:☐

Project-by-project☒

On a project portfolio basis☐

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

Information reported:☒

Allocated amounts☐

Other (please specify):☐

GB refinanced share of total investment

Frequency:☒

Annual☐Other (please specify):

Semi-annual☐

Impact reporting (Environmental Impact):☐

Project-by-project☒

On a project portfolio basis☐

Linkage to individual bond(s)☐On a project portfolio basis

Frequency:☒

Annual☐Other (please specify):☐

Semi-annual☐

Energy Savings

Information reported (expected or ex-post):☒

GHG Emissions / Savings☐

Other ESG indicators (please
specify):

Means of Disclosure☒

Information published in financial☒

reportInformation published in sustainability
report(NYK Integrated Report)☐

Information published in ad hoc documents☒

Other (please specify): NYK Report or web
site☐

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

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NYK LINE Green/transition Bond Framework and Transition Bond

Ⅶ Assessment Conclusion
On the basis of the information provided by NYK and the work undertaken, it is DNV’s opinion
that the NYK Green/Transition Bond Framework and Transition Bond issued by NYK meets thecriteria established in the Protocol and that it is aligned with the stated definition or purposeof green/transition bond within the CTFH, CTFBG, GBP and GBGLs, which is to “enable capitalraising and investment for new and existing projects with environmental benefits”.
DNV Business Assurance Japan K.K.
1st Jul. 2021

Mark Robinson

Jan-Henrik Hübner

Manager, Sustainability Services

Technical Expert

DNV Business Assurance, Australia

Global Head of Shipping Advisory

Shaun Walden

Naoki Maeda

Principal Consultant

Managing Director

DNV Business Assurance, UK

DNV Maritime, Germany

DNV Business Assurance Japan K.K.

Masato Kanedome
Project Leader
DNV Business Assurance Japan K.K.

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NYK LINE Green/transition Bond Framework and Transition Bond

About DNV
Driven by our purpose of safeguarding life, property and the environment, DNV enables organisations to advancethe 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 andconfidence. 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.

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NYK LINE Green/transition Bond Framework and Transition Bond

Schedule-1 NYK Green/Transition Bond Nominated Project

The green projects listed in the table are green/transition bond candidates that have been evaluated for eligibility at the time of preissue eligibility assessment (as of June 2021). In the future, if additional green/transition projects are included in the finances issued
under the NYK Green/transition Bond Framework, eligibility will be evaluated in advance by the issuer, and if necessary, DNV will
evaluate them in a timely manner.

Category*2*3

Project
01

Offshore Wind*１Power

02

Green Terminal*１

03

Ammonia fueled vessel*１-

Renewable Energy-- Ammonia-based liquefied ammonia
carrier and tugboat- LNG fueled vessel

vessel *１-

Fuel Conversion
Technology
Innovation
Clean Transportation05

LNG fueled vessel-

Fuel Conversion

06

LNG fuel supply vessel-

Technology

07

LPG fueled vessel-

Clean Transportation

Operation efficiency &-Clean transportation

04

08

Hydrogen fueled cell

optimization

Project Overview & Target Activities- Self Elevating Platform(SEP)- Crew Transfer Vessel (CTV)

Innovation

Energy efficiency- New establishment and expansion ofGreen Terminal- Introduction of ships equipped withhigh-power hydrogen fueled cells

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

Efforts for fuel conversion phase (introduction of
low-carbon fuel) shown in the roadmap frominternational shipping. Includes projects related- LNG bunkering vesselto ship fuel conversion (LNG, LPG) and fuel- LPG fueled vessel
supply vessels that support it.
- Development of ship construction technology (lightening & stability, propulsion
efficiency, alternative fuel equipment) that contributes to high operational efficiency &optimization, digital solution development, etc.

*1 Project categories 01 to 04 are projects that have been confirmed to be eligible as green project*2 Projects that have been confirmed to be eligible as green projects can be incorporated into green bonds in the future, and CTFBG allows them to
be incorporated as a part of transition bonds.
*3 Projects that are currently classified as transition projects may become green projects due to the application of future technological innovations(e.g., application of green fuel, achievement of performance that meets CO2 emission standards as a green project, etc.).

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NYK LINE Green/transition Bond Framework and Transition Bond

Schedule-2 Climate Transition Finance Eligibility Assessment Protocol
The checklists (1-4) below are DNV evaluation procedures created for NYK Transition Bond Eligibility Evaluation based on the disclosure
requirements of CTFH and CTFBG.
The "confirmed documents" in the evaluation work include public or private documents (materials inside the issuer), etc., and are provided
by NYK as evidence of eligibility judgment for DNV.

Climate Transition Finance Handbook Alignment
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1

Issuer’s Climate
Transition
Strategy andGovernance

The financing purpose should be forenabling an issuer’s climate change
strategy. A ‘transition’ label applied to a
debt financing instrument should serve tocommunicate the implementation of anissuer’s corporate strategy to transform thebusiness model in a way which effectively
addresses climate-related risks andcontributes toalignment with the goals of the Paris
Agreement.

Confirmed documents-Framework-NYK Group ESG Story-NYK Green/transition
Project Documents-IMO, Ministry of Land,
Infrastructure,
Transport and Tourism,
NYK Group SBT relatedmaterials

NYK has established a framework and has implemented various
plans and initiatives for the NYK Group's broad range ofenvironmental strategies to manage and enhance theorganization's environmental sustainability and related
performance.
DNV reviewed and confirmed on the basis of the NYK Group's
quantified scientific evidence that these correspond well below
the 2°C target of the Paris Agreement.

The planned climate transition trajectoryshould be relevant to the environmentallymaterial parts of the issuer’s business

Confirmed documents-Framework-NYK Group ESG Story

2

Business model
environmental
materiality

Interviews withstakeholders

The NYK Group's transition strategy incorporates theenvironmental targets of the IMO and the Ministry of Land,
Infrastructure, Transport and Tourism and the targets certified
by the SBT, and defines the efforts and review plans required tocontinuously realize emission reductions in the future.
DNV has confirmed that the framework and implementation
plan are well aligned with the NYK Group's transition strategy.
DNV has confirmed that implementation plans based ontransition strategies are reliable, ambitious and achievable.
DNV evaluated whether major activities related to NYK Group'sbusiness activities correspond to NYK Group's transition

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Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

model, taking into account potential futurescenarios which may impact on current
determinations concerning materiality.

-NYK Green/transition
Project Documents-IMO, Ministry of Land,
Infrastructure,
Transport and Tourism,
NYK Group SBT relatedmaterials

strategy, which was evaluated as contributing to theenvironment.

Interviews withstakeholders

The NYK Group's main activity is to focus on reducing CO2
emissions from ships, mitigating it’s impact on climate change.

The NYK Group's CO2 emission reduction plan is set andquantified in an absolute sense that it must be an optimal
solution that exceeds the goals of the shipping industry set by
IMO and the Ministry of Land, Infrastructure, Transport andTourism, and the possibility of further improvement.

DNV has confirmed that NYK Group's transition plan is anactivity of NYK Group's core business, which contributes to theenvironment and supports commercial driving force. The NYK
Group's planned transition strategies and transition routes areassociated with the NYK Group's priority goals and materials,
and will contribute to significant environmental impacts from aqualitative and quantitative perspective.

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Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

3

Climatetransition
strategy to bescience-based
includingtargets andpathways

Issuer’s climate strategy should reference
science-based targets and transition
pathways. The planned transition
trajectory should:•
be quantitatively measurable (basedon a measurement methodology
which is consistent over time);•be aligned with, benchmarked orotherwise referenced to recognized,
science-based trajectories wheresuch trajectories exist;•
be publicly disclosed (ideally inmainstream financing filings),
include interim milestones, and;be supported by independent assurance orverification.

Confirmed documents-Framework-NYK Group ESG Story-NYK Green/transition
Project Documents-IMO, Ministry of Land,
Infrastructure,
Transport and Tourism,
NYK Group SBT relatedmaterials

The NYK Group has established a scientifically-based “wellbelow the 2°C target” transition plan and a transition trajectorythat is consistent with the IMO, Ministry of Land, Infrastructure,
Transport and Tourism and SBT targets.
The plan is to maintain realistic achievements and pathways for
reducing CO2 emissions in the absolute sense, and absolute CO2
emissions to maintain at defined levels in the future.

Market communication in connection withthe offer of a financing instrument which
has the aim of funding the issuer’s climatetransition strategy should also provide
transparency to the extent practicable, ofthe underlying investment program
including capital and operational
expenditure.

Confirmed documents-Framework-NYK Group ESG Story-NYK Green/transition
Project Documents-IMO, Ministry of Land,
Infrastructure,
Transport and Tourism,
NYK Group SBT relatedmaterials

4

Implementationtransparency

Interviews withstakeholders

DNV confirmed that NYK Group's transition strategy isquantified and, in an absolute sense, is built around the shortand medium-term and long-term goals set out in the identified
SBT model for sustainable CO2 emission reduction. The
transition trajectory shown to reduce CO2 emission is below the
2°C target. These are open to the public through the framework
and NYK Group ESG stories.
DNV confirmed that the investment and deployment plans
related to the NYK Group's transition strategy include consensus
building on the investments made so far and future investments
and expenditures. It was confirmed that the overall investment
plan (investment amount) has a plan to be implemented along
the timeline.
DNV also reviewed the framework and NYK Group ESG stories
and confirmed that the execution was transparent and that the
NYK Group explained and agreed on the relevance of theexecution.

Interviews withstakeholders

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Schedule-3 Green Bond Eligibility Assessment Protocol
The checklist below (GBP-1 to GBP-4) is a DNV evaluation procedure created for the NYK Green/transition Bond Eligibility Assessment based on therequirements of GBP and GBGLs. "Confirmation of related documents" in the evaluation work includes documents inside the issuer and is provided by NYK
as evidence of eligibility judgment for DNV.
In Schedule-3, it is referred to as GBP according to the practice, but this is the standard to be referred to in the case of financing that specifies the use offunds such as green projects and transition projects in transition bond that specifies the use of funds based on CTFH and CTFBG, including both green andtransition contexts.

GBP-1 Use of Proceeds
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1aTypes of funds

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

Confirmed documents-Framework-NYK Green/transition
Project Documents

Through the evaluation work, DNV confirmed that NYK
Green/transition Bonds fall into the following categories.

The key to a green/transition bond is thatthe proceeds will be used for a green
project, which should be properly stated in
the legal documents relating to the security.

Confirmed documents-Framework-NYK Green/transition
Project Documents

1b

Green/transition
Project
Classification· (Standard) Green/transition Bond

Interviews withstakeholders

Interviews withstakeholders

DNV confirms that NYK Green/transition Bond aims to funda wide range of Green/transition projects focused on the
NYK Group's environmental goals, as described in
Framework and Schedule-1.
Specifically, all Green/transition Candidate projects listed in
Schedule-1 are evaluated as conforming to the Transition
Strategy, and the proceeds through the Green/transition
Bond are planned to be transferred to one or more
Green/transition Candidate Projects.

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Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
Through the assessment, DNV concludes that theGreen/transition Candidate Projects will bring concrete andactual environmental benefits.

1c

1dEnvironmental
benefits

Refinancing rate

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

Confirmed documents-Framework-NYK Green/transition
Project Documents

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

Confirmed documents-Framework-NYK Green/transition
Project Documents

Interviews withstakeholders

Interviews withstakeholders

Project classification

Category01

Offshore wind power

Renewable energy

02

Green Terminal

03

Ammonia fueled vessel

04

Hydrogen fueled cell
vessel05

LNG fuele vessel

06

LNG fuel supply vessel07

LPG fueled vessel

08

Operation efficiency &optimization

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

The Green/transition Project will contribute to the goals
based on the NYK Group's transition strategy, and will haveenvironmental benefits such as CO2 emission reduction
through low carbonization through the projects in the
project classification and category shown in 1b. It was
confirmed that the environmental improvement effect will
be quantitatively evaluated as the amount of CO2 emission
reduction and reported annually.
The issuer plans to use all proceeds for new investment,
refinancing, or both for eligible candidate projects includedin Schedule-1, not decided prior to issuance. Through theannual report, they confirmed that they plan to clarify theestimated amount (or ratio) of the proceeds which wasallocated to refinancing.

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GBP-2 Process for Project Evaluation and Selection
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

2aProject
selection
process

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

Confirmed documents-Framework-NYK Green/transition Bond
Selection / Evaluation Procedure

DNV confirmed that the issuer has a process ofdetermining the eligibility of the projects for which
the Green/transition Bond funding and that theoutline is specified in the framework.

2b

Issuer's
Environment
al and Social
Governance
Framework

Interviews with stakeholders

Confirmed documents-Framework-NYK Green/transition Bond
Selection / Evaluation Procedure
Interviews with stakeholders

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

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GBP-3 Management of Proceeds
Ref.

Criteria

3a

Tracking
procedure-1

3b

3c

Tracking
procedure-2

Temporaryholding

Requirements

Work Undertaken

DNV Findings

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

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

The proceeds from the funds raised by theGreen/transition Bond are incorporated into thecommon account of the issuer, and the status of fundallocation on a project-by-project basis can be tracked
using the in-house system, forms, etc.
DNV confirmed the system actually used and related
documents, etc., and confirmed that the management
status of the proceeds was proved based on them.

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

Confirmed documents-Framework-Accounting management
document

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

Confirmed documents-Framework-Accounting management
document

Interviews with stakeholders

Interviews with stakeholders

Interviews with stakeholders

DNV confirmed that the issuer plans to periodically(annually) review the balance of green/transition bonds
using the in-house system / forms described in 3aduring the period from issuance to redemption of green
bonds.

Through the confirmation process based on the issuer's
in-house system / form and related business flow, it
was confirmed that the balance of unallocated money isrecognized sequentially.
DNV confirmed through the framework and assessmentthat the balance of unallocated funds is managed in
cash or cash equivalents. It was confirmed that thebalance of unallocated money will be revealed throughthe reporting of the fund allocation status.

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GBP-4 Reporting
Ref.

Criteria

4aPeriodical
Reporting

Requirements

Work Undertaken

DNV Findings

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

Confirmed documents-Framework-NYK Green/transition
Project Documents

DNV confirmed that the issuer will carry out an annual reporting ofGreen/transition Bonds until the proceeds are allocated and will disclose
information on the status of allocation of funds, the projects to which the funds
have been allocated and the effects of environmental improvement.
It was confirmed that the environmental improvement effect will be disclosed inany or all of the following tables within the scope of confidentiality and as longas it is reasonably feasible.
<Fund allocation status>-Appropriate amount-Balance of unallocated money and management method-Approximate amount of the portion of the proceeds used for refinancing<Environmental improvement effect> * Refer to the table below

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Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

Table : Green/transition project Environmental improvement effect * Any or all will be disclosed
Record of Equipment
GHG, CO2
Sox, NOx
introduced
Emission
EmissionNo.
Project classification(Capacity, cardinal number,
reduction
reduction
number of vessels)
amountamountOffshore
Self Elevating Platform (SEP)
＊1＊2
01
✔
－
－
wind power
Crew Transfer Vessel (CTV)
02
Green Terminal
New establishment and expansion of Green Terminal✔＊2－－
Ammonia fueled＊3
03
Ammonia-based liquefied ammonia carrier and tugboat
✔
－
－
ship
Hydrogen fueled
Introduction of ships equipped with high-power hydrogen
04
✔＊3
－
－
cell vessel
fueled cells＊3＊405
LNG fueled vessel LNG fueled vessel *excluding fossil fueled transportation✔
✔
✔＊5
LNG fuel supply✔＊506
LNG bunkering vessel✔＊3✔＊4
vessel07
LPG fueled vessel LPG fueled vessel
✔＊3
✔＊4
✔＊5
Operation
Software development, etc. that supports operational
08
efficiency &
－
✔*6
✔＊5
efficiency and optimization
optimization* 1: Introduction record (number of vessels) and specifications of SEP vessels and CTV* 2: Number of units and power generation capacity (MW) of the offshore wind power generation, onshore wind power generation and solar
power generation introduced* 3: Number and main specifications of vessels built according to the project classification* 4: GHG / CO2 emission reduction amount or ratio compared to the case of using heavy oil as fuel (Including planned values)* 5: SOx and NOx emission reduction amount or ratios compared to the case of using heavy oil as fuel (Excluding NOx for LPG fueled vessel)* 6: GHG / CO2 / SOx / NOx emission reduction amount or ratios before and after the introduction of equipment and systems compared tostandard operations

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Schedule-4 Basic Guidelines on Climate Transition Finance Eligibility checklist
The following checklist (from CTF-1 to CTF-4) are based on four “disclosure elements “which indicated in the “Basic Guidelines on Climate Transition
Finance (CTF)” established by the Financial Services Agency, Ministry of Economy, Trade and Industry, and Ministry of the Environment in May 2021.
According to the CTF, “disclosure elements” are classified into the following thee categories. Should:◎ recommend:〇 be considered/possible: △These expressions are used in the following context.
-

Items described with the word “should” are basic elements that financial instruments labeled as transition finance are expected to have.

-

Items described with the word “recommended” are elements that financial instruments labeled as transition finance are optimally recommended to-have under these Guidelines although instruments which do not have these items can also be labeled as “transition”.
Items described with the word “be considered” or “possible” are elements that these Guidelines provides as examples and interpretations although it is
not considered problematic even if financial instruments labeled as transition finance do not have them.

There is a supplementary explanation in the margin of each checklist for the annotations in the disclosure elements.
The number /01/、/02/〜/XX/ listed in the “Work Undertaken” are documents confirmed through the eligibility evaluation work. Details (document name)are shown in Appendix-1. In addition to the confirmed documents, the “Work Undertaken” includes the case where the information obtained throughdiscussions and interviews with the issuer is used as evidence.

CTF-1 Fundraiser’s Climate Transition Strategy and Governance
Ref.

No.

disclosure elements

◎

1-a)

Financing through transition finance should aim
to implement or incentivize the achievement oftransition strategies9. Such strategies shouldincorporate a long-term target to align with thegoals of the Paris Agreement, relevant interim
targets on the trajectory towards the long-term
goal, disclosure on the levers towards
decarbonization, and fundraiser’s strategicplanning.

Requirement checkYes
No
Not Applicable

Work Undertaken

DNV Findings

Confirmed
documents:/01//02//03//14//15//18/
Discussions withissuer

NYK’s financing through transition bond is in linewith the low-carbon / decarbonization strategy set
by IMO and the Ministry of Land, infrastructure,
Transport and Tourism. In addition, it is also
motivated by the realization of transition
strategies based on certified SBT.
NYK's transition strategy is disclosed as follows.
Short- to medium-term target: 30% reduction
Long-term goal: 50% reduction(Both are transportation units compared to 2015,
and these targets exceed the targets of IMO and42

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Ref.

No.

disclosure elements

Requirement check

Work Undertaken

DNV Findings
the Ministry of Land, Infrastructure, Transport andTourism when compared to 2008, which is thebase year of IMO and the Ministry of Land,
Infrastructure, Transport and Tourism.)

◎

1-b)

(△)

〇

1-c)

A transition strategy should serve to explicitly
communicate the implementation of an issuer’s
strategy to transform the business model in a
way which effectively addresses climate-relatedrisks and contributes to achieving the goals of
the Paris Agreement10. Transformation of abusiness model is not limited to initiatives as anextension of existing businesses but can also betransformation based on various otherperspectives. It includes fuel conversion that
achieves significant carbon and GHG reduction
benefits, introduction of innovativetechnologies, improvement of / changes inmanufacturing processes and products, anddevelopment and provision of products andservices in new fields.

Yes

The implementation of a transition strategy
assumes cases where it affects society andenvironment other than climate change, suchas employment or stable provision of products
and services, through transformation of abusiness model. In such cases, it isrecommended that the fundraiser also takes
into consideration the impact of business

Yes

No
Not ApplicableNo
Not Applicable

Confirmed
documents:/01//02//03//14//15//18/
Discussions withissuer

The NYK Transition Strategy consists of theshipping business, which is NYK's core business,and the renewable energy-related business,
which is based on the development oftechnologies cultivated so far. As specificbusiness transformation, it includes fuelconversion from existing heavy oil-fueled vessels
to LNG, LPG or future ammonia- and hydrogenfueled vessels, the introduction of innovativetechnologies such as operational efficiency andoptimization, and the expansion into renewableenergy-related businesses as a new businessfield.

Confirmed
documents:/01//02//03//14//15//19/
Discussions withissuerAt this time, there are no additional significant
environmental and social impacts on theimplementation of NYK's transition strategy.
However, in project implementation,
consideration and countermeasures forenvironmental and social impacts based on laws
and ordinances and company standards will be
implemented under NYK's management.

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Ref.

No.

disclosure elements

Requirement check

Work Undertaken

DNV Findings

Confirmed
documents:/01//14//15//19/
Discussions withissuer

NYK's transition strategy is built on IMO, Ministryof Land, Infrastructure, Transport and Tourism,
TCFD and certified SBT. NYK plans a transition
pathway that exceeds the goals of the IMO,
Ministry of Land, Infrastructure, Transport andTourism, which should be referred to as theshipping industry (starting point is set 2008 by
IMO and MLIT. NYK set 2015 the strategy andtarget value).

Confirmed
documents:/01//14//15//19/
Discussions withissuer

NYK puts ESG at the center of its management
and formulates the NYK Group ESG Story. ThisNYK Group ESG Story is closely linked to NYK's
transition strategies and plans. This means that
NYK's transition strategies and plans are linked
to NYK's ESG management, and are considered
to have high reliability in terms of effectiveness.

Confirmed
documents:/01//14//15/
Discussions withissuer

NYK obtained SBT certification in 2018 against
its ongoing medium-long term environmental
target. NYK would review SBT in 2023 due to
SBT certification scheme, and recognized thatthe goals of IMO and the Ministry of Land,
Infrastructure, Transport and Tourism maychange in the medium to long term. NYK plans
to make changes and amendments to its
transition strategies and plans as necessary.

innovations to society and environment otherthan climate change.

◎
(△)

〇

△

1-d)

1-e)

1-f)

Climate change-related scenarios11 should bereferenced in developing transition strategies.
The pathway to transition should be planned forrespective sector and regions of individual
fundraiser, who may generally be placed in adifferent starting point and pathway totransition.

Yes

Transition strategies and plans must be highly
credible in terms of their effectiveness.
Therefore, it is recommended that a transition
strategy and plan are linked to management
strategy and business plan, including mediumterm management plans.

Yes

However, because such strategies and plansrun for a long period of time, it is possible thatthe content may be modified or adjusted in theevent of a major change in the assumed
external environment and so on.

Yes

No
Not ApplicableNo
Not ApplicableNo
Not Applicable

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Ref.

No.

disclosure elements

△

1-g)

In the initial phase of developing a transition
strategy by the fundraiser, it is considered as
an option for the fundraiser to indicate a planfor future implementation of items describedwith the words “recommended” and “beconsidered/ possible” in these Guidelines.

Yes

In order to secure the effectiveness of thetransition strategy, the fundraiser should
establish an organizational structure12 for theboard of directors and/or other such committee
to oversee the activities addressing climatechange and for management to play a role inassessing and managing such climate-related
activities.

Yes

While a transition strategy shall be basicallydeveloped by a company in need of finance, it ispossible for entities to utilize the strategy ofcompanies that are wholly or partially
responsible for the initiatives to establish or
explain their own strategy, given that thefinance supports GHG emissions reduction
initiatives of not just a single company but its
supply chain.

Yes

◎

△

1-h)

1-i)

Requirement checkNo
Not ApplicableNo
Not ApplicableNo
Not Applicable

Work Undertaken

DNV Findings＊Confirmation
through thisassessment

It was confirmed that NYK's transition strategy is
generally implemented for the “recommend” and“be considered/possible” items in this basic
guideline.

Confirmed
documents:/01//04//05/
Discussions withissuer

NYK has established a climate change responsemanagement system and created a new ESG
management promotion committee andestablished a business execution system and agovernance system for supervision andreporting.

Confirmed
documents:/01//02//03/
Discussions withissuer

NYK itself built a transition strategy.

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Ref.

No.

disclosure elements

◎

1-j)

Transition strategies should be disclosed inadvance in a company’s integrated report,sustainability report, statutory documents andother materials for investors (including suchdisclosures on the website). This also applies tothe other three elements.

Yes

It is possible to disclose transition strategies
and elements concerning the governanceguaranteeing that the execution of transition
strategies is in alignment with the reporting
frameworks such as the Recommendations of
the Task Force on Climate-Related Financial
Disclosures (TCFD; Final Report)13.

Yes

If the implementation of a transition strategy
assumes impacts on society and environment
other than climate change, it is recommended
that the fundraiser explain the view underlying
its approach14, etc. to address such impacts anddisclose how the strategy on the wholecontributes to achieving the Sustainable
Development Goals (SDGs) so that the effects
can be appropriately evaluated by the financier.

Yes

Considering the length of application and otherfactors, there may be instances when a

Yes

△

〇

◎

1-k)

1-l)

1-m)

Requirement checkNo
Not ApplicableNo
Not ApplicableNo
Not Applicable

Work Undertaken

DNV Findings

Confirmed
documents:/01//02//03/
Discussions withissuer

NYK's transition strategy is disclosed to thegeneral public or investors in the Integrated
Report (NYK Report), NYK Group ESG Story(Booklet, presentation materials and web
videos), in relation to the goals of IMO, Ministryof Land, Infrastructure, Transport and Tourism
and Certified SBT.

Confirmed
documents:/01//14//15/
Discussions withissuer

NYK is proceeding with the disclosure of climatechange-related information in line with TCFD
recommendations. Specifically, the NYK report
defines governance building and strategy / risk
management. NYK's transition strategy is
consistent with this TCFD effort.

Confirmed
documents:/01//14//15/
Discussions withissuerAt this time, there are no additional significant
environmental and social impacts on theimplementation of NYK's transition strategy.
However, in project implementation,
consideration and countermeasures forenvironmental and social impacts based on laws
and ordinances and company standards will be
implemented under NYK's management. The
framework clarifies how activities based ontransition strategies are associated with theSDGs.

Confirmed
documents:

NYK obtained SBT certification in 2018 against
its ongoing medium-long term environmental
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Ref.

〇

〇

No.

1-n)

1-o)

disclosure elements

Requirement checktransition strategy and plan will need to bemodified due to major changes in the external
environment and relevant conditions that wereassumed at a planning phase. In this case, thecontents of the modification should be disclosed
together with the underlying reason in a timely
manner.

No

In terms of governance, it is recommended that
disclosures include an organizational structure
for overseeing the implementation of atransition strategy and for assessing andmanaging related initiatives. It is also
recommended that disclosures include thespecific roles of the constituent organizations
and the management and the process by which
the content of deliberations is reflected inmanagement.

Yes

In cases where the fundraiser determines theneed for an objective assessment regarding thetransition strategy, it is recommended that areview, assurance and verification by an
external organization for its transition strategy.

Yes

Not ApplicableNo
Not ApplicableNo
Not Applicable

Work Undertaken

DNV Findings/01/
Discussions withissuertarget. NYK would review SBT in 2023 due to
SBT certification scheme, and recognized thatthe goals of IMO and the Ministry of Land,
Infrastructure, Transport and Tourism maychange in the medium to long term. NYK plans
to make changes and amendments to its
transition strategies and plans as necessary.
NYK plans to timely disclose any significant
changes, along with the reasons for them.

Confirmed
documents:/01//04//05//14//15/
Discussions withissuer

NYK has established a climate change responsemanagement system and created a new ESG
management promotion committee andestablished a business execution system and agovernance system for supervision andreporting. In these systems, the relationshipbetween specific role of organization / manager
and ESG management is organizedConfirmed
documents:/01/
Discussions withissuer

NYK utilizes reviews from DNV, an externalorganization, for an objective assessment of its
transition strategy.

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Ref.

No.

disclosure elements

△

1-p)

It is recognized useful to obtain a review
particularly concerning the following inconnection with the transition strategy:- Alignment of short-term, mid-term and longterm targets (for targets, refer to Element 3)
with the overall scenario- Credibility of the fundraiser’s strategy toreach the targets- - Appropriateness of the management
process and governance for the transition
strategy

Requirement checkYes
No
Not Applicable

Work Undertaken

DNV Findings

Confirmed
documents:/01//02//03//04//05//14//15//18/
Discussions withissuer

DNV confirmed the following regarding a reviewof transition strategies:- NYK’s transition strategy has a consistentscenario (concrete action plan) with shortterm and medium-term goals (2030) andlong-term goals (2050).
- NYK's transition strategy is positioned at thecenter of its ESG management, and has
specific plans and goals and is reliable.
- The transition strategy is properly managed
and implemented through the Climate
Change Response Management System andthe ESG Promotion Committee.

9 Transition finance is available for not only entities with strategies and plans for reducing emissions associated with their corporate economic activities,
but also entities that plan to take initiatives that enable others to implement transition strategies through their own products and services. In suchcases of financial institutions, a financier should articulate how the underlying projects or activities themselves fit into the fundraiser’s strategy while,similarly, a subsidiary or an SPC to make use of its group’s or its sponsors’ strategy. However, doing so they should explain how their strategy willcontribute to the strategy as a whole. In addition, it can be considered that parent company or the group who established the strategy would explain
the transition elements as the main fundraiser.
10 The Paris Agreement sets out a goal to Holding the increase in the global average temperature to well below 2°C above pre-industrial levels andpursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.
11 Climate-related scenarios are listed in the “Task Force on Climate-related Financial Disclosures (TCFD) Technical Supplement” and the document issued
by the Ministry of the Environment: “Practical Guide for Scenario Analysis in line with TCFD Recommendations”. In addition, Principles for Responsible
Investment (PRI) disclose a set of climate scenario tools.
12 Assumes matters provided for under “governance” in the TCFD Recommendations.
13 As for the approach to disclosure aligned with TCFD Recommendations, refer to “Guidance on Climate-related Financial Disclosures (TCFD Guidance)2.0”, “Guidance for Utilizing Climate-related Information to Promote Green Investment (Green Investment Guidance)” (both published by the TCFD
Consortium), and the document published by the Ministry of the Environment: “Practical Guide for Scenario Analysis in line with TCFD
Recommendations”.
14 An example of the approach may be to identify, eliminate, reduce, and manage potential negative effects.
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CTF-2 Business Model Environmental Materiality
Ref.

No.

disclosure elements

◎

2-a)

Initiatives for achieving the transition
strategy should be such that contribute totransforming core business activities that areenvironmentally material parts today and in
the future.15

Yes

When identifying business activities that areenvironmentally material parts, it isrecommended that the fundraiser consider
multiple climate change-related scenariosthat may possibly impact its judgment on
the identification16.

Yes

In terms of considering materiality, it ispossible to apply existing guidance provided
by an organization that creates standard
criteria concerning sustainability reporting17.

Yes

〇

△

2-b)

2-c)

Requirement checkNo
Not ApplicableNo
Not ApplicableNo
Not Applicable

Work Undertaken

DNV Findings

Confirmed
documents:/01//06/
Discussions withissuer

The NYK Transition Strategy consists of the shipping
business, which is NYK's core business, and therenewable energy-related business, which is based on
the development of technologies cultivated so far.
As specific business transformation, it includes fuelconversion from existing heavy oil-fueled vessels to
LNG, LPG or future ammonia- and hydrogen-fueled
vessels, the introduction of innovative technologies
such as operational efficiency and optimization, andthe expansion into renewable energy-related
businesses as a new business field.

Confirmed
documents:/01//06//14//15/
Discussions withissuer

NYK is proceeding with the disclosure of climatechange-related information in line with TCFD
recommendations. Specifically, the NYK Report
identifies the major risks and opportunities thatclimate change may have and the impact on the NYK
Group. This transition strategy and efforts are
consistent with this scenario.

Confirmed
documents:/01//06//14//15/
Discussions withissuer

NYK considers the materiality of climate change
efforts in its climate change-related disclosures in linewith TCFD recommendations. In addition, themateriality of the NYK Group is defined by "safety,""environment," "human resources," and contributions
to the SDGs are also organized.

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Ref.

No.

disclosure elements

◎

2-d)

The fundraiser should indicate that climatechange is an environmentally material partof business activities18.

Yes

It is recommended that disclosures include
the contents of climate change-related
scenarios used in identifying businessactivities that are environmentally material
parts along with the underlying reasons(e.g., regional and industrial characteristics)
for selecting such scenarios.

Yes

〇

2-e)

Requirement checkNo
Not ApplicableNo
Not Applicable

Work Undertaken

DNV Findings

Confirmed
documents:/01//06//14//15/
Discussions withissuer

The materiality "environment" defined by the NYK
Group shows that global environmental issues(climate change) are important in the NYK Group'sbusiness activities. It also identifies specific risks andopportunities and sets CO2 reduction targets as
medium- to long-term environmental targets.

Confirmed
documents:/01//06//14//15/
Discussions withissuer

NYK conducts scenario analysis of the shipping
business through TCFD. Specifically, NYK refers toWorld Energy Outlook for future energy-related
trends, and analyzes it on the premise of the IEA's
main scenario and the achievement of the SDGs. A
detailed explanation of these is disclosed in the NYK
report.

15 They include activities that are environmentally material parts are considered to be business activities of the fundraiser that identifies climate change aspart of its materiality.
16 Scenario analysis using multiple climate-related scenarios is similar to that required by the TCFD Recommendations, and it is considered useful to referto relevant guidelines and such like for implementation methods. An example is the document issued by the Ministry of the Environment: “Practical
Guide for Scenario Analysis in line with TCFD Recommendations”.
17 “The SASB Materiality Map” issued by the Sustainability Accounting Standards Board serves as a guidance concerning materiality.
18 As for the approach to identifying environmentally material business activities, it is possible to use the materiality map and such like and outline thelevel of materiality of climate change for one’s entity.

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CTF-3 Climate Transition Strategy to be Science-based Including Targets and Pathways
Ref.

No.

disclosure elements

◎

3-a)

The fundraiser should reference science-basedtargets in developing its transition strategies.

Requirement checkYes
No
Not Applicable

◎

◎

3-b)

3-c)

(△)

◎

3-d)

This should include mid-term targets (short- to
mid-term targets) in addition to long-termtargets for 2050 and be quantitatively
measurable based on a measurement
methodology which is consistent over a long
period of time.

Yes

In addition, it is recommended that GHG
reduction targets, which could be formulated
either in intensity and absolute terms, should
consider environmental materiality and cover
Scopes 1 through 3 of GHG Protocol, theinternational standard on supply-chain emissions.
It is recommended that targets covering Scope 3
be set using a practical calculation method whenit could be subject to significant reduction in thefundraiser’s business model19. It is also possible
to disclose the avoided emissions as necessary.

Yes

Science-based targets are GHG reduction targets
required for achieving the goals of the Paris

Yes

No
Not ApplicableNo
Not Applicable

Work Undertaken

DNV Findings

Confirmed
documents:/01//02//03//18/
Discussions withissuer

NYK is building a transition strategy based on
scientifically-based goals which obtained SBT
certification. It also refers to IEA's World
Energy Outlook as a scenario.

Confirmed
documents:/01//02//03//14//15//18/
Discussions withissuer

NYK uses a consistent measurement method
using the "GHG emission intensity" andquantitatively measurable indicators, and has
included the 2030 target (30% reduction from2015) as an intermediate target (short- to
medium-term target) in addition to the longterm target for 2050 (50% reduction from2018).

Confirmed
documents:/01//02//03//07//18/
Discussions withissuer

NYK has adopted the "GHG emission intensity"and the reduction rate compared to 2015 asindicators of emission reduction targets. The
absolute value compared to 2015 is also
calculated.
About 95% of NYK's target scopes are Scope1
and Scope2. Scope3 is about 5% and is not an
important reduction target to be considered, so
individual targets are not set.
The calculation method for reduction has been
established within the NYK Group.

Confirmed
documents:

NYK's Transition Strategic Goals refer to:51

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Ref.

No.

(△)

◎

△

3-e)

3-f)

disclosure elements

Requirement check

Agreement and should be set while taking into
account differences in regional characteristics andindustries. In so doing, it is possible to refer tothe following trajectories.
- Scenarios widely recognized in theinternational community (Examples include
the Sustainable Development Scenario (SDS)
outlined by the International Energy Agency(IEA)20)- Objectives verified under the Science
Based Targets Initiative (SBTi) and such like- Nationally Determined Contributions(NDC) of countries aligned with the goals of
the Paris Agreement, roadmaps by industry
sector21, industries set out plans that are
science-based achieving the Paris
Agreement22 and so on.

No

Short- to mid-term targets (with a term of three
to fifteen years) should be set by referencing the
aforesaid trajectories or on the pathway toward
the long-term targets planned as benchmarks23.

Yes

In doing so, since short- to mid-term targets will
likely be set in consideration of various factors(including the starting point and track records ofthe issuer, timing of capital investments,
economic rationality, cost-benefit analysis, andavailability of technology necessary to achieve

Yes

Not Applicable

Work Undertaken/01//02//03//14//15//18/
Discussions withissuerDNV Findings- Internationally recognized scenario⇒Goals that exceed IMO's GHG reduction
strategy- Goals verified by Science Based Targets
Initiative (SBTi) etc.
⇒Certified Goals in 2018
- GHG emission reduction targets in eachcountry that are consistent with the goals of
the Paris Agreement（Nationally Determined
Contributions:⇒Goals and initiatives consistent with the
Zero Emissions Roadmap of International
Shipping of Ministry of Land, Infrastructure,
Transport and Tourism.

No
Not ApplicableNo
Not Applicable

Confirmed
documents:/01//02//03//14//15//18/
Discussions withissuer

NYK's short- and medium-term goals (2030) are
set based on the asset introduction andtechnology development plans shown in thepathway towards the long-term goals of 2050.
Specifically, it is consistent with the efforts of
IMO and the Ministry of Land, Infrastructure,
Transport and Tourism.

Confirmed
documents:/01//02//03//14//15//18/
Discussions withissuer

NYK plans to set short- and medium-term goals
and promote business activities toward
subsequent long-term goals (transformation ofexisting businesses, efforts for new businesses)
through various projects illustrated in the text.
This includes the starting point of the shipping

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Ref.

No.

disclosure elements

Requirement check

Work Undertaken

the targets), it is possible that the pathway may
not necessarily be linear with the same slope atall times but may be nonlinear.

◎

◎

△

3-g)

3-h)

3-i)

DNV Findings
business, consideration of performance, capital
investment in BAT, and pioneering efforts forinnovation for future implementation.

The fundraiser should disclose the short- to midterm and long-term targets they have set,
including the base years etc.

Yes

In order to show that long-term targets are
science-based, disclosures should explain themethodology or trajectory used to define target,
including the underlying reasons (e.g.,characteristics specific to a region or industry). In
particular, when reference is made to plans andindustry roadmaps established by an industry,
etc., the explanation should include that they are
grounded in scientific basis.

Yes

It is possible that disclosures explain the pathway
toward a long-term target and the alignment
between the short- to mid-term targets on thepathway and the transition strategy, based on

Yes

No
Not ApplicableNo
Not ApplicableNo
Not Applicable

Confirmed
documents:/01//02//03//14//15//18/
Discussions withissuer

SBT, NYK's transition strategy, discloses that it
has set 2015 as the base year, has set 2030 asshort- and medium-term targets year, and has
set 2050 as long-term targets year.

Confirmed
documents:/01//02//03//14//15//18/
Discussions withissuer

NYK's transition strategy refers to plans androadmaps of IMO and Ministry of Land,
Infrastructure, Transport and Tourism, which
recognized in the shipping industry. IMO
roadmap (IMO GHG emission strategy) includes
the GHG emission reduction targets of the Paris
Agreement goals for temperature and includes
consideration of short-term, medium- to longterm timelines, building of construction capacity,and supportive measures such as technicalcooperation and R & D, so it is considered to bea scientifically-founded long-term goal. (Source:
IMO website Initial IMO GHG Strategy)

Confirmed
documents:/01//02//03//14//15//18/
Discussions withissuer

NYK exemplifies representative projects that canbe invested as green/transition candidate
projects among the efforts toward long-termgoals. The overall investment plan (investment
amount) is undecided, but it was confirmed that

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Ref.

No.

disclosure elements

Requirement check

Work Undertaken

the investment plan (refer to Element 4) andother plans.

△

3-j)

Concerning targets and trajectories, obtaining
expert reviews on the following is considered tobe particularly useful:- Whether the long-term target is aligned with
science-based targets➡Whether the disclosed information explains thealignment with the Paris Agreement- Whether the short- to mid-term targets are
determined using a GHG emissions forecast
calculated based on a climate change scenario
analysis➡Whether scenarios, etc. widely recognized in
the international community are used orreferenced- Whether the actual values of the indicators
used for the targets are quantitatively
measured using consistent measurement
methods➡Whether a specific GHG emissions reduction
measure has been developed to achieve short- to
mid-term targets aligned with long-term goals

DNV Findings
NYK has a plan to implement it according to thetimeline.

Yes
No
Not Applicable

Confirmed
documents:/01//02//03//14//15//18/
Discussions withissuerBased on the materials and information provided
by NYK, DNV reviewed the following andconfirmed that the goals and trajectories werescientifically based.
Whether the long-term target is alignedwith science-based targets➢ The referenced IMO, Ministry of Land,
Infrastructure, Transport and Tourism and
SBT are consistent with the Paris
Agreement.
-

Whether the short- to mid-term targets are
determined using a GHG emissions forecast
calculated based on a climate change
scenario analysis➢ Utilizes internationally recognized
scenarios. Specifically, NYK refers to TCFD
and SBT.

-

Whether the actual values of the indicators
used for the targets are quantitatively
measured using consistent measurement
methods➢ A measurement method has been
established and quantified using the GHG
emission intensity as an index.

19 Since an appropriate method for calculating Scope 3 emissions for specific industrial sectors is under development, it is possible to estimate Scope 3
emissions on a provisional “best effort” basis. When disclosing, it is recommended that boundaries, calculation methods and other relevant factors be
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NYK LINE Green/transition Bond Framework and Transition Bondalso reported. “Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain” (METI, MoE; 2017 Japanese only. Related
information in English) can be used for calculation references.

20 In addition to benchmarks indicated by the IEA, there are those referenced by the IPCC, such as RCP 2.6 (keep global warming to below 2°C), RCP 1.9(keep global warming to below 1.5°C) and other related Transition Pathway Initiative (TPI) benchmarks. Meanwhile, scenario listings are available in
the TCFD Technical Supplement and in the document published by the Ministry of the Environment: “Practical Guide for Scenario Analysis in line with
TCFD Recommendations”.
21 An example of a sector-specific roadmap formulated by a public organization is the “Roadmap to Zero Emission from International Shipping” (Ministry ofLand, Infrastructure, Transport and Tourism; 2020). The Ministry of International Trade and Industry also plans to formulate a roadmap for highemission industries.
22 In utilizing a plan formulated at a sector level, it is necessary to have a credible proposition that the alignment with the Paris Agreement can be
explained with scientific grounds.
23 While it is possible to set short- to mid-term targets by determining the standard based on an assumed use of best available technologies (BAT),
consideration should be made as to whether the use of such technologies might make it difficult to achieve long-term targets.

CTF-4 Implementation Transparency
Ref.

No.

disclosure elements

◎

4-a)

In implementing transition strategies, thefundraiser should provide transparency of thebasic investment plan to the extent practicable.

Yes

The investment plan includes not only capital
expenditure (Capex) but also capital andoperational expenditure (Opex). Therefore, costs
related to research and development, M&A, anddismantling and removal of facilities are also

Yes

◯

4-b)

Requirement checkNo
Not ApplicableNo
Not Applicable

Work Undertaken

DNV Findings

Confirmed
documents:/01//02//03//08//14//15//18/
Discussions withissuer

NYK exemplifies representative projects that canbe invested as green/transition candidate
projects among the efforts toward long-termgoals. The overall investment plan (investment
amount) is undecided, but it was confirmed that
NYK has a plan to implement it according to thetimeline.

Confirmed
documents:/01//02//03//08//14//15//18/

The investment plan includes expenditures of thefollowing activities that contribute to the efforts
needed to implement the transition strategy:-Capital investment- Research and Development
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NYK LINE Green/transition Bond Framework and Transition Bond

Ref.

No.

disclosure elements

Requirement checksubject to the investment plan. In other words, it
is recommended that the investment plan
incorporate, to the extent possible, expenditureand investment necessary for implementing thetransition strategy.

△

◯

4-c)

4-d)

Work Undertaken
Discussions withissuer

It is recommended that the investment plan
outline the assumed climate-related outcomes
and impacts24 in a quantitative fashion where
possible, along with the calculation methods andprerequisites25. If quantification is difficult, theuse of external certification systems can beconsidered as a substitute for qualitative
assessment.

Yes

In particular, when outlining the assumed
climate-related outcomes and impacts, it isrecommended that the disclosure include not
only GHG emission reduction and other initiatives
to ease climate change but also report how
consideration of a “just transition”26 isincorporated into the transition strategy.

Yes

No
Not ApplicableNo
Not Applicable

DNV Findings- Business Development- Business operation- Working capital, etc.

Confirmed
documents:/01//02//03//08//14//15//18/
Discussions withissuerFor each green/transition candidate project to beinvested, environment-related indicators are
selected and quantitatively evaluated. However,when research and development, trial
production, demonstration tests, etc. are
included, if it is clear that the project willcontribute to future environmental improvement
effects, the evaluation may be carried out basedon the fact that the funds were allocated andimplemented. (Estimate the expectedenvironmental improvement effect only within
the feasible range)

Confirmed
documents:/01//14//15//18//19/
Discussions withissuerNo critical factors impeding "just transition" byexecuting NYK's Green/transition Candidate
Project.
However, through the assessment, it was
confirmed that if it corresponds to a “justtransition” in the project that NYK will carry out
in the future or if it is considered that it willaffect the SDGs, it will be disclosed as
appropriate as necessary.

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NYK LINE Green/transition Bond Framework and Transition Bond

Ref.

No.

disclosure elements

〇

4-e)

If implementing the transition strategy has thepotential of having a negative impact on
employment or the environment andcommunities other than climate change, it isrecommended that any expenditures to mitigate
such negative impacts be added to the plan.

Yes

Moreover, the outcomes arising from investments
included in the investment plan should align withthe targets.

Yes

Transition finance is a means to financially
support the implementation of a transition
strategy, and it is recommended that financing
be provided for new initiatives. However, in thecase of transition finance in the format of Use ofProceeds instruments, refinancing for areasonably set lookback period (the period during
which refinancing is to be applied for projects
that have already started) is considered to beeligible.

Yes

◎

〇
(△)

4-f)

4-g)

Requirement checkNo
Not ApplicableNo
Not ApplicableNo
Not Applicable

Work Undertaken

DNV Findings

Confirmed
documents:/01//14//15//18//19/
Discussions withissuerAt this time, there are no additional significant
environmental and social implications for
implementing NYK's transition strategy.
However, in project implementation,
consideration and countermeasures forenvironmental and social impacts based on laws
and ordinances and company standards will be
implemented under NYK's management. The
framework clarifies how activities based ontransition strategies are associated with theSDGs.

Confirmed
documents:/01//08/~/12//14//15//18//19/
Discussions withissuer

NYK quantitatively evaluates that the results(GHG intensity reduction effect) of each
investment target candidate project included in
the investment plan are consistent with thetarget (same as above).

Confirmed
documents:/01//08/~/12/
Discussions withissuer

NYK's Green/transition nominated project will be
used to fund new initiatives. In the future, whentargeting refinancing, it was confirmed that areasonable lookup period (e.g., the transition
and greenness of the target asset should not be
impaired at the time of allocation) will be set.

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Ref.

No.

disclosure elements

◯

4-h)

It is recommended that investment plans be
disclosed by linking the outcomes and impacts
with the expenditures to the extent practicable27.

Yes

It is recommended that the fundraiser, after
securing financing, reports any deviations
between the initial plan and the actual
expenditure, outcomes and impacts. For any
deviations, it is recommended that the underlying
reasons be explained.

Yes

In cases where the Use of Proceeds bonds
include refinancing, the fundraiser should provide
an explanation on the lookback period set under
the framework or other relevant methods alongwith the underlying reasons and factors.

Yes

While there are differences in business practices,Yessuch as the fact that loans are traditionally madeNo

based on the bilateral relationship between a

Not Applicable

◯

◎

◯

(△)

4-i)

4-j)

4-k)

Requirement checkNo
Not ApplicableNo
Not Applicable

No

Work Undertaken

DNV Findings

Confirmed
documents:/01/
Discussions withissuerNo detailed plans have been disclosed at thistime for long-term amounts for each NYK Green/ Transition candidate project. In the future, we
also referred to 3-f) and confirmed through theassessment that it is expected to be
implemented systematically.

Confirmed
documents:/01/
Discussions withissuer

NYK will report any significant differences inspending, outcomes or impacts from the originalplan, including the reasons in the post-issuancereport.

Discussions withissuer

NYK has no plans of refinancing at this time. In
the future, if refinancing is included when issuingbonds of Use of Proceeds based on a preestablished framework, NYK plans to disclose
necessary information in legal documents, etc. inaccordance with 4-g).

Discussions withissuer

NYK has no plans to make a loan at this time.

Not Applicableborrower and a lender, it is recommended that
disclosure on the above be made to the extent
possible in order to ensure transparency and58

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Ref.

No.

disclosure elements

Requirement check

Work Undertaken

DNV Findings

Discussions withissuer

NYK is not a small-to-medium-sized enterprise.

credibility of transition finance. However, if it isdifficult to disclose such information to the publicfrom the standpoint of confidentiality andcompetition, it is possible to report suchinformation only to lenders or external evaluation
organizations without disclosing it to the public.

△

4-l)

Similarly, in cases where the fundraiser is asmall-to-medium-sized enterprise and it isdifficult to disclose to the public the same content
as that reported to the financier or an external
evaluation institution, it is possible for thefundraiser to simplify the content of disclosure,for example, by limiting disclosure to a summaryof h) to j) of this section.

Yes
No
Not Applicable

24 The Ministry of the Environment, in its “Concept Paper on Impact Finance”, refers to impact as “a positive or negative change to the environment,
society or economy caused by an organization and is not a direct deliverable or output but an outcome as a change brought about in terms of theenvironment, society or economy.”
25 In disclosing impacts, outlining the amount of contribution to reducing CO2 emissions in the global value chain on the whole and the entire lifecycle,
including the consumption phase, can be considered. For the amount of contribution to the reduction, it is possible to reference the “Guideline forQuantifying GHG Emission Reduction Contribution” (METI, 2018). Furthermore, as for outcomes on research and development, it is possible toreference the IEA Measuring Innovation by Technology Readiness Level (TRL) or Importance for Net-Zero Emission, among others, and outline theprogress in the R&D phase or the potential of reducing CO2 emissions with the relevant technology by highlighting the importance of net-zero emissions.
26 A just transition is an attempt to ensure the wide sharing of virtual profits created through a transition to a green economy, as well as to support any
party who will experience an adverse economic impact (be it a country, a region, an industry, a community, a worker, or a consumer). The concept of ajust transition corresponds to several SDGs.
27 In particular, disclosure of investment plans is expected to be required for projects applicable to Use of Proceeds.
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Schedule-5 Green Bond Guidelines Eligibility Assessment
Following check list (GBGLs-1 ~ GBGLs-4) is prepared based on the Green Bond Guidelines (GBGLs, MOE, 2020).
According to the GBGLs, Requirements/Evaluation aspects are divided into following two terms, Should:◎ Recommend:〇
The numbers /01/, /02/ ~ /22/ listed in the Work Undertaken column are the confirmed documents, and the details (document name) are shown inReference dcoument-1 (See the Attachment).
In addition to the confirmed documents, the Work Undertaken includes the case where the information obtained through discussions and interviews withthe publishers is used as evidence.
This assessment applies as a requirement for Use of Proceeds based on CTFH, so any term "green" in Schedule 5 should be read as "green and / ortransition".

GBGLs-1 Use of proceeds
Ref.

SectionRequirements◎

1-①

Green Bond proceeds should beallocated to Green Projects that state
the clear environmental benefits,
which should be assessed by theissuerYes

Environmental benefit of Green Bond
proceeds, where feasible,
quantification is recommended.

Yes

〇

1-①

Requirement checkNo
Not ApplicableNo
Not Applicable

Work Undertaken

DNV Findings

Confirmed document:/01//08/~/12/Interviews withstakeholders

Projects to which the proceeds from theGreen/transition Bond will be allocated to the projects
that contribute to low/decarbonization through the NYK
Group and related industries, through shipping businessor new business, etc. Regarding specific environmental
improvement effects, it is evaluated by the issuer that
it will lead to reduction of CO2 and harmful substances.

Confirmed document:/01//08/

NYK quantifies the environmental improvement effects
of green/transition projects.
Specifically, NYK has established a calculation formulain advance for the CO2 reduction effect, harmful
substance reduction effect, etc., and quantified theeffects. (It is difficult to quantify some projects because
they include research and development)Interviews withstakeholders

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Ref.

SectionRequirements◎

1-④

In advance, issuers should provide
investors with information regarding
the use of Green Bond proceeds
through legal documentation (suchas a prospectus) or otherdocuments.

Yes

The provision of the information
regarding the use of proceeds should
specify the Green Project categories.

Yes

◎

1-⑤

Requirement checkNo
Not ApplicableNo
Not Applicable

Work Undertaken

DNV Findings

Confirmed document:/01//08/~/12//22/
Interviews withstakeholders

It is confirmed that NYK will explain to investors inadvance through the framework and securities
registration statement or the GB Amended Shelf
Registration, etc.

Confirmed document:/01/
This report
Interviews withstakeholders

Issuer plans to explain to investors that the proceeds will
be used in the following business categories through theframework, securities registration statements, GB
Amended Shelf Registration, etc. and the results ofexternal reviews. The framework shows the following
projects candidate list. The proceeds will be allocated tosome or more of them.
projects
category*1*2
Offshore
Renewable Energy
01
wind power
02 Green Terminal
Renewable Energy
Fuel Conversion
03 Ammonia fueled vessel
Technology Innovation
Hydrogen fueled cell04
Clean Transportation
vessel05
06
07
08

LNG fueled vessel
LNG fuel supply vessel
LPG fueled vessel
Operation efficiency &optimization

Fuel Conversion
Technology Innovation
Clean Transportation
Clean transportation,
Energy efficiency*1 Projects that are currently confirmed eligibility as green
projects can be incorporated into green bond and are also
permissible in the CTFBG to be incorporated as part oftransition bond.

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Ref.

SectionRequirements

Requirement check

Work Undertaken

DNV Findings*2 Projects that are currently classified as transition projects
may become green projects due to the application of
future technological innovations. (Example: Application ofgreen fuel, achievement of performance that meets CO2
emission standards as a green project, etc.)

〇

◎

1-⑤

1-⑥

In the cases where individual Green
Projects have been specified, it isrecommended that issuers clearlypresent the projects to investors.

Yes

In cases where Green Projects haveYes

incidental negative environmental

No

impacts along with the alleged

Not ApplicableNo
Not Applicable

environmental benefits, the issuers

Confirmed document:/01//08/~/12//22/
Interviews withstakeholders

Specific candidate projects and allocation plans areprovided to external review agencies. On the other hand,the explanation to investors clearly states the outline of
the green project through the disclosure of theframework and the results of external reviews in
consideration of confidentiality, etc., and is suitable.

Confirmed document:/01//19/
Interviews withstakeholders

Regarding the negative impacts of project
implementation, the issuer has stated through theframework and disclosure of external review resultsthat the following environmental and social risk
reduction efforts have been implemented, or that thetarget project has already been implemented.
"In the operation and implementation of the projects,
we are working on the conservation of the surrounding
environment in each related group and regularly
monitoring it in the PDCA cycle."

Confirmed document:/01/
Interviews withstakeholders

NYK has no plans to refinance at this time. In the
future, if refinancing is included when issuing Use ofProceeds bonds based on a framework formulated inadvance, NYK plans to disclose necessary informationin legal documents, etc. in accordance with CTF 4-g).

should include information regardingthese negative impacts (e.g., how
they are assessed, what the issuers
do to curb them) to investors so thatthe investors and market participants
can appropriately evaluate these
impacts.

〇

1-⑦(In case of where a part of Green
Bond proceeds is used to refinanceexisting Green Projects,) it isrecommended that the issuers
provide information to the investors

Yes
No
Not Applicable

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Ref.

SectionRequirements

Requirement check

Work Undertaken

DNV Findings

Confirmed document:/01/
Interviews withstakeholders

At the present time, there are no plans to allocate
proceeds a refinancing to projects that have passed along period.

regarding (1) the amount (or theshare) of the bond proceeds being
allocated for refinancing, and (2)which Green Projects (or Green
Project categories) may be
refinanced.
◎

1-⑦

When Green Bonds are issued
multiple times to refinance an asset
that requires long-term
maintenance, the issuer should
clearly disclose the asset’s age andremaining useful life and the amountto be refinanced as at the time of thebond issuance, evaluate the longterm sustainability of environmental
benefits and obtain an assessment
from an external reviewers forverification.

Yes
No
Not Applicable

GBGLs-2 Process for Project Evaluation and Selection
Ref.

SectionRequirements◎

2-①

In advance, issuers should provide
investors with information regarding
the following:
The environmental sustainability
objectives that the issuers intend toachieve through Green Bonds.

Requirement checkYes
No
Not Applicable

Work Undertaken

DNV Findings

Confirmed
document:/01//14//15/
Interviews withstakeholders

NYK’s financing through transition bond is in line with the lowcarbon / decarbonization strategy set by IMO and the Ministryof Land, infrastructure, Transport and Tourism etc. In addition,
it is also motivated by the realization of transition strategies
based on certified SBT.
NYK's transition strategy is disclosed as follows.
Long-term goal: 50% reduction
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Ref.

SectionRequirements

Requirement check

Work Undertaken

DNV Findings
Short- to medium-term target: 30% reduction(Both are compared to 2015 transportation units)
These are planned to be explained in advance to investors
through the framework, external review results, securities
registration statements, GB Amended Shelf Registration, etc.,
and are suitable.

◎

2-①

In advance, issuers should provide
investors with information regarding
the following:
The criteria for determining theappropriateness of Green Projects
based on the environmental
sustainability objectives described
above

Yes
No
Not Applicable

Confirmed
document:/01//04//05//21/
Interviews withstakeholders

It was confirmed through the framework and assessment thatthe criteria (standards) applied for the eligibility of NYK's
Green/transition Projects are described in the framework.
Specifically, the criteria are as follows.
Climate Transition Finance Handbook
International Capital Market Association (ICMA), 2021
Basic Guidelines on Climate Transition Finance (CTF)
Financial Services Agency, Ministry of Economy, Tradeand Industry, Ministry of the Environment, 2021
The Green Bond Principles
International Capital Market Association (ICMA), 2021
Green Bond Guidelines
Ministry of Environment Japan, 2020
These are clearly stated in the framework and are planned to
be explained in advance to investors through securities
registration statements or GB Amended Shelf Registration,etc., and are suitable. In addition, DNV stated in its second
party opinion that it referred to and evaluated the relevant
technical standards of Climate Bond Standards (v3.0) in thetechnical evaluation of the project through the assessment.

◎

2-①

In advance, issuers should provide
investors with information regarding
the following:

Yes
No
Not Applicable

Confirmed
document:/01//04//05//21/

It was confirmed that the framework describes the process how
the green/transition projects are evaluated and selected.
Specifically, the Finance Group selects eligible projects, and the64

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Ref.

〇

◎

Section

2-⑥

2-⑦

Requirements
The process for determining how
Green Projects fit the criteria for theachievement of the environmental
sustainability objectives (The process
for the determination refers to thereason why issuers determine that
Green Projects can provide
environmental benefits appropriately
in light of the objectives and criteria
for the use of Green Bond proceeds,
how and by whom are the criteria
applied and used to determine
whether Green Projects areappropriate in light of the objectives,
and the like)
It is recommended that the issuers
explain to investors in advance any
environmental standards orcertifications that the issuers willrefer to in evaluating and selecting a
Green Project to be financed.
If an issuer intends to establish an
exclusion standard to identify andcontrol such potentially material
environmental and social risks ofGreen Projects, the issuer should
explain it to investors in advance as
one of the criteria it applies.

Requirement checkYes
No
Not ApplicableYes
No
Not Applicable

Work Undertaken

DNV FindingsInterviews withstakeholders

selected eligible projects are decided by the Treasury Executive
Officer. In addition, project eligibility is comprehensively
analyzed and examined for financial and operational aspects,
market environment, and ESG aspects and risks in collaboration
with specialized groups such as the environment group.

Confirmed
document:/01//02//03/
Interviews withstakeholders

The transition strategy underlying the evaluation and selection ofgreen/transition bond is based on IMO, Ministry of Land,
Infrastructure, Transport and Tourism etc. and certified SBT andwill be explained to investors through the framework and second
party opinion.
There are no environmental standards or certifications forindividual projects.
NYK has established the following as common exclusion criteria
for green/transition bond.
・ Inappropriate relationships such as unfair trade, bribery,corruption, extortion, embezzlement, etc. that do not comply
with the laws of the country of residence
・Transactions that can cause social problems such as humanrights and the environment
In addition, the following are defined as exclusion criteria for
projects related to ship construction.

Confirmed
document:/01//04//05//21/
Interviews withstakeholders

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SectionRequirements

Requirement check

Work Undertaken

DNV Findings
・Vessels dedicated to transporting either or both of coal andheavy oil

〇

2-⑨

〇

2-⑪

It is recommended that internalgroups who have expertise, such as
the environment related group, or
external institutions check whether
the determination process is suitablefrom an environmental point of view.

Yes

It is recommended that issuers
position their environmental
objectives, criteria and informationon their processes in the context of
their comprehensive environmental
sustainability objectives, strategy,
policies and so on (e.g., mediumterm management plan,sustainability strategy, CSR strategy)
when explaining them to investors.

Yes

No

Not Applicable

Confirmed
document:/01//04//05//21/
Interviews withstakeholders

No

Not Applicable

Confirmed
document:/01//14//15//21/
Interviews withstakeholders

It was confirmed that the framework describes the process bywhich the selection of the green/transition project was decided.
Specifically, the Finance Group selects eligible projects, and theselected eligible projects are decided by the Treasury Executive
Officer. In addition, project eligibility is comprehensively
analyzed and examined for financial and operational aspects,
market environment, and ESG aspects and risks in collaboration
with specialized groups such as the environment group.
The transition strategy underlying the evaluation and selection ofgreen/transition bond is based on IMO, Ministry of Land,
Infrastructure, Transport and Tourism and certified SBT and will
be explained to investors through the framework and second
party opinion.
NYK's transition strategy is disclosed as follows.
Long-term goal: 50% reduction
Short- to medium-term target: 30% reduction(Both are compared to 2015 transportation units)

GBGLs-3 Management of proceeds
Ref.

SectionRequirements◎

3-①

Issuers should track and manage the net
Green Bond proceeds in an appropriatemanner. These tracking and managing

Requirement checkYes

No

Not Applicable

Work Undertaken

DNV Findings

Confirmed document:/01//13/

The proceeds will be credited to an account managed
by the NYK Group, and will be identified and managed
for each project by an in-house system which can be

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SectionRequirements

Requirement check

activities should be controlled by theissuer’s internal process.
◎

◎

◎

〇

3-②

3-②

3-⑤

3-⑥

Work Undertaken

DNV FindingsInterviews withstakeholders

tracked and managed. It also has an internal control
process with annually reporting and approval to the
CFO.

Confirmed document:/01//13/Interviews withstakeholders

NYK has an in-house system to periodically (annually)
ensure that the allocated and unallocated balances
match the proceeds, and DNV has confirmed thatissuers can identify and manage the proceeds
separately from other balances.

Confirmed document:/01//13/Interviews withstakeholders

The balance of unallocated funds can be easily grasped
by checking the amount of proceeds and the allocation
status using the in-house system. The framework
states that unallocated proceeds will be managed as
cash and cash equivalents. NYK plans to allocate it to
the project within two years after raising the funds.
The framework clearly states that the proceeds will be
tracked on a case-by-case manner and annually by theinternal system. The details of the use of the proceeds
will be stated in legal documents such as securities
registration statements or GB Amended Shelf
Registration Statement and will be disclosed.
The in-house system will be stored semi-permanently
and will be available as a voucher in a timely manner ifnecessary.

As long as the Green Bonds areoutstanding, issuers manage the amountof the allocation to the Green project isequal to or more than proceed, or issuers
should periodically adjust to match theamount of the total Green Bond proceeds
to the sum of the amount of the proceeds
allocated to Green Projects and theamount of the unallocated proceeds.

Yes

If any of the proceeds remains
temporarily unallocated, the issuer should
explain to investors how it intends tomanage the balance of such unallocatedfunds and endeavour to promptly allocate
such funds to Green Projects.

Yes

In advance, issuers should provide
investors with information on how Green
Bond proceeds will be tracked andmanaged.

Yes

Not Applicable

Confirmed document:/01//13//22/
Interviews withstakeholders

It is recommended that issuers keep
evidenced documents appropriately that

Yes

Confirmed document:/01//13/No

Not ApplicableNo

Not ApplicableNo

No

Not Applicable

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SectionRequirements

Requirement checkdemonstrate how they tracked andmanaged Green Bond proceeds.

◎

〇

3-⑧

3-⑨

Work Undertaken

DNV FindingsInterviews withstakeholders

Not Applicable

Confirmed document:/01//13//22/
Interviews withstakeholders

It was confirmed that the framework describes theoperation method of the amount equivalent to thefunds before allocation (to manage with cash or cash
equivalent).

Yes

Confirmed document:/01/ /13/

Cash or cash equivalents stated in the framework aresafe assets and meet requirements.

In advance, issuers should provide
investors with information on how
unallocated Green Bond proceeds will be
managed when the Green Projects thatwill receive the Green Bond proceeds
have not been determined, or when such
Green Projects have been determined but
the proceeds have not been allocatedbecause the allocation timing has not yet
arrived.

Yes

It is recommended that issuers manage
unallocated Green Bond proceeds as an
asset with high liquidity and safety suchas cash, cash equivalents, or short-term
financial assets

No

No

Not Applicable

Interviews withstakeholders

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GBGLs-4 Reporting
Ref.

SectionRequirements◎

4-①

Issuers should publicly disclose the latest
information on the use of Green Bond
proceeds after issuance

Yes

Issuers should disclose the latest
information at least once a year until full
allocation of the proceeds and as necessary
thereafter in the event of new
developments.

Yes

Disclosed information should include thefollowing contents:<Contents>
・ A list of the Green Projects to which
Green Bond proceeds have been allocated

Yes

◎

◎

4-②

4-③

・ A brief description of each Green Project(including up-to-date progress)

Work Undertaken

DNV Findings

Confirmed
document:/01/
Interviews withstakeholders

From the year following the issuance of the Green/transition
Bond, it was confirmed that the status of allocation of theproceeds from the issuance of the Green/transition Bond to
the use of proceeds and the environmental improvement
effect are planned to be reported annually at least until theyear following the completion of the allocation. The annual
report will be disclosed on the NYK Group website.

Confirmed
document:/01/
Interviews withstakeholders

Same as 4-①.
In addition, if there is a significant change in the transition
strategy or pathway, allocation plan or project
implementation status (e.g., interruption of the project thatstarted allocation, significant postponement on a yearlybasis, sale or retirement, etc.), NYK will report the change ina timely manner or in reporting.

Confirmed
document:/01/ *See table
below
Interviews withstakeholders

The disclosed information will include the following contents
in consideration of confidentiality.
The planned allocation period will be within two years after
fund procurement, and the operation method will be
managed in cash or cash equivalents.

Requirement checkNo

Not ApplicableNo

Not ApplicableNo

Not Applicable・ The amount allocated to each Green
Project
・ The expected environmental benefits ofeach Green Project<allocation status>
 Allocated amount Balance of unallocated amount and its management
Approximate amount (or share) of theproceeds being used for refinancing<Environmental improvement effects> ※refer to thefollowing・ Information regarding unallocated Green
Bond proceeds (the amount of theunallocated proceeds or the share of theunallocated proceeds to the total amount of
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Ref.

SectionRequirements

Requirement check

Work Undertaken

DNV Findings

the proceeds, when the unallocatedproceeds are expected to be allocates toGreen Projects, and how the unallocatedproceeds are managed until allocation)
Table : Green/transition project environmental improvement effect ※Any or all will be disclosed
Result ofequipment
GHG, CO2
SOx、NOx
introduction
Emission
EmissionNo.
Project(Capacity,
reduction
reduction
cardinal number,amountamountnumber of ships)
Offshore
Self Elevating Platform (SEP)
01
✔＊1＊2
－
－
wind power
Crew Transfer Vessel (CTV)
02
Green Terminal
New establishment and expansion of Green Terminal✔＊2－－
Ammonia fueled＊3
03
Ammonia-based liquefied ammonia carrier and tugboat✔
－－
vesselHydrogen fueled
Introduction of vessel equipped with high-power hydrogen fueled
04
✔＊3
－
－
cell vesselcells
05
LNG fueled vessel
LNG fueled vessel ＊Excluding fossil fueled transportation
✔＊3
✔＊4
✔＊5
LNG fuel supply
06
LNG bunkering vessel
✔＊3
✔＊4
✔＊5
vessel07
LPG fueled vessel
LPG fueled vessel
✔＊3
✔＊4
✔＊5
Operation efficiency Software development, etc. that supports operational efficiency
08
－
✔*6
✔＊5
& optimizationand optimization* 1: Introduction record (number of vessels) and specifications of SEP vessels and CTV* 2: Number of units and power generation capacity (MW) of the offshore wind power generation, onshore wind power generation and solar power generation
introduced* 3: Number and main specifications of vessels built according to the project classification* 4: GHG / CO2 emission reduction amount or ratio compared to the case of using heavy oil as fuel (Including planned values)* 5: SOx and NOx emission reduction amount or ratios compared to the case of using heavy oil as fuel (Excluding NOx for LPG fueled vessel)* 6: GHG / CO2 / SOx / NOx emission reduction amount or ratios before and after the introduction of equipment and systems compared to standard operations

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Ref.

SectionRequirements〇

4-④

If Green Bond proceeds have been allocatedto the refinancing of existing projects, it isrecommended that disclosed information
include: 1) the approximate amount (or theshare) of the allocated proceeds used forrefinancing, and 2) a list of the Green
Projects (or the project categories)
refinanced.
While it is recommended to disclose 4-③
and 4-④ on a project-by-project basis, if
there are confidentiality agreements,
competitive considerations, or a large
number of underlying projects that limit thedisclosure of details, it is considered that
information is presented in generic terms orin an aggregated portfolio.
When disclosing information regarding the
expected environmental benefits of projects,
issuers should use appropriate indicators
while ensuring consistency with the“environmental sustainability objectives,”the “criteria” for Green Projects specified in
Section 2, “Process for Project Evaluationand Selection,” and the characteristics ofGreen Projects.
When disclosing the expected environmental
benefits of projects, it is recommended thatissuers, where feasible, use quantitative
indicators and disclose information on
methodologies and/or assumptions as wellas these indicators.

〇

◎

〇

4-⑤

4-⑦

4-⑧

Work Undertaken

DNV Findings

Confirmed
document:/01/
Interviews withstakeholders

There are no plans to refinance prior to the issuance ofgreen/transition bonds. In the future, if specific refinancing
and refinancing targets arise, the actual results (allocation
amount or ratio, target projects) will be disclosed in theannual reporting.

Confirmed
document:/01/
Interviews withstakeholders

The environmental improvement effect will be reported on
the NYK Group website until the entire amount of theproceeds is allocated.

Confirmed
document:/01/
Interviews withstakeholders

Regarding the environmental improvement effect, NYK plans
to use the appropriate index according to the project to which
the green/transition bond is allocated. Specifically, theamount or ratio of GHG / CO2 / SOx / NOx emission
reductions shown in 4-③ will be reported.

Confirmed
document:/01/
Interviews withstakeholders

The environmental improvement effect will be disclosed using
quantitative indicators, but it will be implemented for eachgreen project or each green project classification inconsideration of confidentiality and rationality of theevaluation process. In addition, the calculation method will
be disclosed to the extent necessary.

Requirement checkYes

No

Not Applicable

Yes

No

Not Applicable

Yes

No

Not Applicable

Yes

No

Not Applicable

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Reference GBGLs-5 External Review
Ref.

Criteria

Requirements/Evaluation aspects〇

5-(1)①

It is recommended that issuers utilize
an external review in case that theyneed an objective assessment of thealignment of their approaches with theframework for Green Bond issuances.

Yes

If issuers have their Green Bonds
reviewed, they should disclose thedocuments showing the review results

Yes

External reviewers should follow thebasic criteria below when giving
reviews.

Yes

◎

◎

5-(1)④5-(1)①-⑤Work UndertakenNo

Not Applicable

5-(2)⑥⑦

External review providers should have asufficient organization structure toappropriately undertake external
reviews and should hire a reasonable
number of people who have professional
experience and qualifications necessary
to cover the areas subject to theIssuer engages DNV* as external reviewer to confirm its eligibility with integrity
and objectively of green bond.
*Green bond support programme (registered supporter), MOE
http://greenbondplatform.env.go.jp/en/support/registration.html

No

Issuer would disclose external review report (verification report) on its website.

Not ApplicableNo

Not Applicable

Integrity, ②Fairness, ③Abilities and due
care as professionals, ④ Duty ofconfidentiality and ⑤Actions as
professionals◎

Confirmation result against to the Requirements/Evaluation aspects

Yes

No

Not Applicable

DNV followed basic criteria given in 5-(1)①-⑤ referring to Guidelines for Green,
Social and Sustainability Bonds External Reviews (ICMA, June 2018).
 As a third-party certification body, DNV provides certification such as ISO9001
and ISO14001.
 DNV is approved verifier of CBI which required competence to evaluate low
carbon project and complies ISAE3000.

Reference: DNV website
https://www.DNV.jp/assurance/index.html
Reference︓CBI approved verifier
https://www.climatebonds.net/certification/approved-verifiers
DNV has sufficient organization structure to appropriately undertake external review
through MOE Green bond support programme as registered supporter.
<registration requirement>
1.Implementation organization
2.Competence and Experience<registration document>
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Ref.

Criteria

Requirements/Evaluation aspects

Work Undertaken

external reviews to be performed.

Confirmation result against to the Requirements/Evaluation aspects
Format1(section.8): work implementation organization
Format1(section 10): Experience green bond supports

◎

◎

◎

◎

5-(2)⑨5-(2)⑩

5-(2)⑪

5-(2)⑫

Dependent on the type of external
review, the external reviewers will
evaluate that 1) the intended
environmental benefits of the Green
Project for which the funds are to be
used, 2) the consistency with the four
elements expected of Green Loans and3) as needed, evaluate potential
material environmental risks (negative
impacts) of the Green Project specified
by the issuer.
External review providers should include
a general description of the purpose ofan external review, scope of the review,
qualifications of persons who conduct
the external review and expertise as
external review providers.
External review providers should include
in the documents and so on concerning
their review results a statement on their
independence from the borrower andtheir policy on conflicts of interest.

Yes

External review providers should clearly
explain in the documents and so on
concerning their review results the

Yes

No

Not Applicable

Yes

No

Not Applicable

Yes

No

Not ApplicableNo

Not Applicable

DNV is also approved verifier of CBI, and it is considered to hold competence andqualification to execute verification of green bond.
DNV external review result includes 3 requirements in this section.
Specifically, the evaluation results for requirements (1) to (3) are as follows.
① The intended environmental benefits of the Green Project for which the funds
are to be used; Summary and Schedule-1② The consistency with the four elements expected of Green Loans ; Summary
and Chapter Ⅳ③ As needed, evaluate potential material environmental risks (negative impacts)of the Green Project specified by the issuer ; Chapter Ⅳ(2)In "II Scope and objective" of the external review result, the purpose of thereview, the scope of work (scope of the review), and the provision of the review
as a green bond issuance registration supporter (external review group) aredescribed.

DNV external review result includes statement in “II Scope and objective “ asbelow.
“DNV holds no other engagements with the Issuer, including its direct
shareholders, for which we foresee conflict of interest to carry out the Scope ofWork as defined in the agreement agreed with the Issuer. In this paper, noassurance is provided regarding the financial performance of the BOND, the valueof any investments in the BOND, or the long-term environmental benefits of thetransaction”
DNV external review result includes requirement in sections as below;
・Summary
・ Text and (3) Standards/guidelines to be applied in Section II
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◎

Criteria

5-(2)⑬Requirements/Evaluation aspects
definitions they used and their analytical
approach and methodologies including
the evaluation criteria applied torespective items.
External reviews should include a
conclusion and output including
marginal items evaluated in external
reviews.

Work Undertaken

Yes

No

Not Applicable

Confirmation result against to the Requirements/Evaluation aspects

DNV external review result includes requirements in sections as below;-Summary-Assessment Conclusion
DNV also explains marginal items in external review report (ChapterⅡ and Ⅲ)“DNV holds no other engagements with the Issuer, including its direct shareholders,
for which we foresee conflict of interest to carry out the Scope of Work as definedin the agreement agreed with the Issuer. In this paper, no assurance is provided
regarding the financial performance of the BOND, the value of any investments in
the BOND, or the long-term environmental benefits of the transaction”“The management of the Issuer has provided the information and data used by DNV
during the delivery of this review. DNV’s statement represents an independent
opinion and is intended to inform the Management of the Issuer and other interested
stakeholders in the BOND as to whether 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 Issuer.”

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Reference document list
/1/ NYK Green/transition Bond Framework/2/ International Maritime Organization: IMO GHG Strategy (IMO’s website)/3/ Roadmap to Zero Emission from International Shipping (Ministry of Land, Infrastructure,
Transport and Tourism)/4/ Climate change response management system (NYK’s website)/5/ ESG Management Promotion Committee (NYK’s website, NYK Report)/6/ Materiality (Group's important issues "safety," "environment," and "human resources.")
NYK’s website/7/ Environmental Performance (Scope1, 2 & 3 for NYK Group GHG emissions) (Data: NYK’s
website)/8/ Project information (LNG fueled vessel and LPG fueled vessel)/9/ Project information (Hydrogen and Ammonia Supply Chain Initiative Policy) NYK
explanatory material (email dated June 2021)/10/ Project information (SEP) NYK’s website/11/ Project information (CTV) NYK’s website/12/ N/A/13/ Procurement fund management (NYK internal materials)/14/ NYK Report 2020
/15/ The NYK Group ESG Story/16/ NYK Environmental Performance (GHG emissions per scope)/17/ CO2 reduction target by improving operational efficiency (NYK internal data)/18/NYK SBT target details (NYK internal materials, NYK website)/19/Negative social impact (case of LNG fueled vessel) NYK/20/ Pre-issue assessment plan and agenda memo of DNV (June 11, 2021)/21/ NYK Green/transition Bond Selection / Evaluation Process/22/ Issuance registration, Amendment Shelf Registration Statement or Securities report

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