SECOND PARTY OPINION
MITSUI O.S.K. LINES, LTD.
SUSTAINABLE FINANCE FRAMEWORK

Prepared by: DNV Business Assurance Japan K.K.
Location: Kobe, Japan
Date: 22 December, 2023
Ref. Nr.: PRJN‐658427-2023-AST‐JPN‐01

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Executive Summary
Mitsui O.S.K. Lines, Ltd. (hereinafter, “MOL”) is one of the largest multimodal groups, which has
approximately 140 years history, that meets diverse transport needs with one of the world’s largest
merchant fleets. As a full-line marine transport group, MOL operates around 800 diverse vessels.
Specifically, MOL runs the dry bulker transport business, energy transport business, product transportbusiness, as well as associated businesses, and other business (including cruise ships).
MOL has launched “MOL Group Environmental Vision 2.2” in April 2023 and is working to solve various
environmental issues such as climate change, aiming for “Net Zero GHG Emissions by 2050.”
In advancing the “MOL Group Environmental Vision 2.2,” MOL is working with ambitious goals for reducing
GHG emissions in line with the GHG emission reduction targets which comply with and are more ambitious
than the International Maritime Organization (IMO), an international organization in the shipping industry,
and the Ministry of Land, Infrastructure, Transport and Tourism. The MOL Group will implement thefinance towards achievement of the ambitious targets for GHG emission reduction and transition strategy
as the “Mitsui O.S.K. Lines, Ltd. Sustainable Finance (hereinafter, the ‘MOL Sustainable Finance’).”MOL believes that it will be an opportunity to disseminate MOL’s wide-ranging sustainability strategy
initiative through the issuance of this finance.
MOL has established the Mitsui O.S.K. Lines, Ltd. Sustainable Finance Framework (hereinafter, the“Framework”) in order to implement sustainable finance in a manner that conforms to the framework,
which is established referring to international standards.
DNV Business Assurance Japan K.K. (hereinafter, “DNV”), as an external review organization, hasevaluated the eligibility of the Framework.
Specifically, DNV provided an eligibility assessment for the Framework by applying frameworks centeredon the following:-

Climate Transition Finance Handbook 2023
(International Capital Market Association, hereinafter CTFH)-

Basic Guidelines on Climate Transition Finance 2021
(Financial Services Agency, Ministry of Economy, Trade and Industry, Ministry of theEnvironment, hereinafter CTFBG)-

Green Bond Principles 2021
(International Capital Market Association, hereinafter GBP)-

Green Loan Principles 2023
(Loan Market Association (LMA) and others, hereinafter GLP)-

Green Bond Guidelines 2022
(Ministry of the Environment, hereinafter GBGLs)-

Green Loan Guidelines 2022
(Ministry of the Environment, hereinafter GLGLs)-

Sustainability Linked Bond Principles 2023
(International Capital Market Association, hereinafter SLBP)-

Sustainability Linked Bond Guidelines 2022
(Ministry of the Environment, hereinafter SLBGLs)-

Sustainability Linked Loan Principles 2023
(Loan Market Association (LMA) and others, hereinafter SLLP)-

Sustainability Linked Loan Guidelines 2022

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(Ministry of the Environment, hereinafter SLLGLs)

The following is a summary of the assessment results for each common element indicated in the above
framework.
<CTF eligibility assessment results>
DNV confirmed the following through the materials and information provided by MOL. Followings (CTF-1~ CTF-4) are findings and opinions of DNV against the four common elements of the CTFH and CTFBG.
CTF -1. Issuer’s climate transition strategy and governance：
The transition strategy of the Issuer, MOL, is consistent with the environmental goals set by IMO,
the Ministry of Land, Infrastructure, Transport and Tourism, etc., and has set long-term andmedium-term targets with scientific evidence with regard to GHG emission reduction. Specifically,
the following targets have been set.
••Long-term target: Net zero emission in the entire group by 2050
Medium-term target: A 45% reduction in GHG emission intensity from transportation by 2035
(compared to 2019)

Concrete actions and investment plans towards achievement of these targets have been identified in
the “MOL Group Environmental Vision 2.2.” In addition, as governance and disclosure related to
implementation of the finance, an internal system and an information disclosure process based on
TCFD*1 has been established. These are disclosed within the Framework etc. and meet thedisclosure elements of CTF-1.
*1: Task Force on Climate-related Financial Disclosures

CTF-2. Business model environmental materiality：
The environmental materiality of MOL’s business model is associated with the results of themateriality analysis, which MOL evaluated business sustainability from both positive and negative
perspectives. The transition strategy and transition pathway based on this are shown in the “MOL
Group Environmental Vision 2.2,” including initiatives for Scope 3, and the contribution to the SDGs,
which will be described later, is also taken into consideration. In addition, the eligible projects and
KPIs specified in the Framework focus on GHG emissions from ship operations and are consistent
with MOL's transition strategy. These are disclosed within the Framework etc. and meet thedisclosure elements of CTF-2.
CTF-3. Climate transition strategy and targets to be science-based：
MOL’s transition strategy is defined by science-based targets and pathways. Specifically, MOL has
indexed and quantified short-and medium-term targets in addition to long-term targets consistent
with the targets set by IMO, the Ministry of Land, Infrastructure, Transport and Tourism, etc,
described in CTF-1 and has identified the process of achieving the targets. Disclosed information on
results toward achieving the target also includes base year and past absolute GHG emission
reductions, which supports the science-based transition strategy toward achieving 2050 net zero
emissions. The disclosed transition strategy also includes Scope 3 initiatives, CO2 capture
technologies, and the use of carbon credits for absorption/removal systems. These are disclosed
within the Framework etc. or second party opinion and meet the disclosure elements of CTF-3.
CTF-4. Implementation transparency ：MOL outlines the basic investment plan for the implementation of the transition strategy and theoutcomes and impacts of the implementation. The transition strategy identifies a plan to reduce
GHG emissions from ship navigation through the introduction of clean energy as a pathway to net
zero emissions. In addition, as an investment plan to realize this strategy, an environmental
investment of 650 billion yen is planned over the three-year period from FY2023 to FY2025, with

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environmental investment accounting for more than 50% of the total investment. These aredisclosed within the Framework etc. or this Second Party Opinion and meet the disclosure elementsof CTF-4.

<GBP/GLP eligibility assessment results>
DNV confirmed the following through the materials and information provided by MOL. Followings(GBP/GLP-1 ~ GBP/GLP-4) are findings and opinions of DNV against the four common elements(disclosure elements) of the GBP, GLP, GBGLs, and GLGLs.
GBP/GLP-1. Use of Proceeds：
MOL defines the use of proceeds as new expenditure or refinancing of existing expenditure on
green/transition-eligible projects that are consistent with the transition strategy and environmental
strategy (hereinafter, “eligible projects”). Specifically, these are projects that contribute to theintroduction of clean energy, further energy-saving technologies, efficient operations, building
business models enabling net zero, and low-carbon and decarbonization projects. The proceeds willbe allocated to one or more of these projects, such as capital expenditure, research anddevelopment or equity investment, either as new expenditure or as refinancing of existing
expenditure. These projects have been assessed as having clear environmental benefits on thetransition strategy and environmental strategy and are expected to contribute to the SDGs. These
processes are consistent with GBP/GLP-1.
GBP/GLP-2. Process for Project Evaluation and Selection：
In addition to ensuring that eligible projects meet the requirements of GBP-1, MOL also assesses thepotential for eligible projects to have negative environmental and social impacts, and implements
mitigation measures for any identified negative impacts. Specifically, the Finance Division, taking
into account the latest environmental vision and other environmental sustainability targets, and withthe advice of the Corporate Planning Division, the divisions with jurisdiction over eligible projects,
and the Technology Innovation Unit where necessary, selects projects for allocation through anappropriate process in accordance with the defined requirements for eligible projects. The
Environment & Sustainability Strategy Division verifies and confirms the appropriateness andeligibility of the projects. These processes are consistent with GBP/GLP-2.
GBP/GLP-3. Management of Proceeds：
The proceeds are managed by the Finance Division, which manages the allocations for each eligible
project using an internal system. The proceeds are allocated to eligible projects as soon as possible
after they are raised and any unallocated proceeds are managed in cash or cash equivalents. The
allocation status of proceeds is tracked by the Finance Division on a regular basis. These processes
are consistent with GBP/GLP-3.
GBP/GLP-4. Reporting：
MOL will report on the allocation status and environmental benefits (impact) of the proceeds on the
MOL website until the proceeds have been fully allocated, within the limits of confidentiality and as
far as reasonably practicable. This will include allocated amount per project category (per action),amount of unallocated proceeds and the allocation policy, if any, summary of the target project,
relevant indicators and quantified environmental benefits, focusing on the amount or percentage(%) of CO2 emission reduction. Any significant changes to the transition strategy or environmental
strategy, allocation plan or results will be reported in a timely manner or in the reporting. These
processes are consistent with GBP/GLP-4.

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<SLBP/SLLP eligibility assessment results>
DNV confirmed the following through the materials and information provided by MOL. Followings(SLBP/SLLP-1 ~ SLBP/SLLP-5) are findings and opinions of DNV against the five common elements of
the SLBP and SLLP (including SLBGLs and SLLGLs).
SLBP/SLLP-1. Selection of Key Performance Indicators (KPIs)：
Please see the Table-1 below. MOL’s environmental sustainability (transition) KPI (EEOI: Energy
Efficiency Operating Indicator) is material to MOL’s overarching transition strategy. The rationale
and process for KPI selection, as well as its definition, measurability and verifiability, are deemed to
be robust, reliable and in accordance with the SLBP/SLLP.
SLBP/SLLP-2. Calibration of Sustainability Performance Targets (SPTs)：
DNV concludes that MOL’s SPTs (EEOI reduction rate based on FY2019) are meaningful andrelevant in the context of MOL’s broader sustainability (transition) and business strategy andrepresent a material improvement over a predefined timeline. Please see the Table-1 below. The
SPTs constitute the annual (cumulative) reduction rate of EEOI from FY2019 to FY2035. The SPTs
are ambitiously set by using external standards set by IMO, the Ministry of Land, Infrastructure,
Transport and Tourism, etc. as benchmarks. In the evaluation of ambition, although there is adifference due to the difference between the external standard and MOL’s baseline (base year), it
has been properly estimated and adjusted by MOL, and as a result, it has been demonstrated to beambitious. In addition, DNV confirmed through a review that MOL's plans are realizable forachieving the annual SPT from 2023 to 2035.
SLBP/SLLP-3. Finance Characteristics：
The financial and structural characteristics of based on the Framework are impacted based on KPI
performance under SPTs. This impact includes, but is not limited to, interest rate stepping up/down
etc., and will be specifically identified in statutory disclosure documents of the bond or loan
agreement documents for each transition linked finance under the Framework.
SLBP/SLLP-4. Reporting：
MOL plans to include the information required by SLBP/SLLP in reporting, and stipulates in the
Framework that the reporting will be disclosed at an appropriate frequency.
SLBP/SLLP-5. Verification：
MOL will undergo independent verification of KPI-related data by an external evaluation bodyannually.

Table-1 MOL Transition Linked Finance KPIs and SPT
Item

Outline
EEOI：Energy Efficiency Operational Indicator

KPI

EEOI is an indicator to measure the CO2e (GHG) emission performance of ship operations. EEOI
is an indicator/calculation method, which is widely used in the shipping industry. It is indicatedthat the use of EEOI is a recognized approach as a methodology for assessing GHG emissions
from ships.
𝑬𝒎𝒊𝒔𝒔𝒊𝒐𝒏𝒔 (𝒈𝒓𝒂𝒎 − 𝑪𝑶𝟐𝒆)
𝑬𝑬𝑶𝑰 (𝒈𝒓𝒂𝒎 − 𝑪𝑶𝟐𝒆/𝒎𝒊𝒍𝒆/𝒕𝒐𝒏𝒏𝒆) =𝑫𝒊𝒔𝒕𝒂𝒏𝒄𝒆 𝒔𝒂𝒊𝒍𝒆𝒅(𝒎𝒊𝒍𝒆) 𝒙 𝑪𝒂𝒓𝒈𝒐 𝒄𝒂𝒓𝒓𝒊𝒆𝒅 (𝒕𝒐𝒏𝒏𝒆)
Emission (gram-CO2e): CO2e (GHG) emissions from ships (gram)Distance sailed (mile): Operating distance (miles)
Cargo carried (tonne): Cargo weight (tonne)

The company-wide average is calculated in total in the following way, using a standardized
methodology designed to compensate for the impact of the greater or lesser absolute intensity
derived from the business characteristics of each segment on the calculation of the company-

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wide average, and to ensure that the efficiency gains achieved by each division are properlyreflected in the company-wide average.
•

Base year: Calculated by dividing the total GHG emissions of all segments by the total
tonne-miles of all segments•

Target years after the base year: The EEOI reduction rate compared to the base year is
calculated for each segment. The contribution rate to the total is then determinedaccording to the project scale, calculated based on the energy consumption of eachsegment, and the EEOI reduction rate of each segment is then weighted and averaged
with that contribution rate.

GHG emissions cover the fuel combustion phase emissions (Scope 1) and part of the fuelproduction phase emissions (Scope 3/Category 3) on the MOL Group's self-operating oceangoing vessels.
Set annual EEOI reduction rate year-on-year as SPT to achieve 45% EEOI reduction by2035 relative to a 2019 baseline.
SPT

MOL performs calculation adjustments comparable to the target by 2030 and 2050 (bothtargets are compared to 2008 as the base year) defined in 2023 IMO GHG strategy, and thensets until 2035 in consistent with IMO’s target level.

On the basis of the information, including the Framework, provided by MOL and the work undertaken,
DNV confirmed that the Framework formulated by MOL meets the criteria required by the relevant
frameworks within CTFH, CTFBG, GBP, GLP, GBGLs, GLGLs, SLLP, and SLLGLs is eligible.

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Contents
Executive Summary

2

Ⅰ. Introduction

8

Ⅱ.

Scope and Objectives

16

Ⅲ.

Responsibilities of MOL and DNV

18Ⅳ. Basis of DNV’s Opinion

18

Ⅴ. Work Undertaken

21

Ⅵ. Findings and DNV’s Opinion

22

Ⅶ Assessment Conclusion

34

Schedule-1 Green/Transition Eligible Projects

36

Schedule-2 Key Performance Indicators (KPI) and Sustainability Performance Targets (SPT)38

Schedule-3 Climate Transition Finance eligibility assessment protocol

40

Schedule-4 Green Finance Eligibility Assessment Protocol

47

Schedule-5 Sustainability Linked Finance Eligibility Assessment Protocol

53

Revision history
Revision
number01

Date of issue
26/10/2021

22/12/2023

Remarks
Initial published as Mitsui O.S.K. Lines, Ltd. Transition Linked Loan Framework
Second Party Opinion• Revised Second Party Opinion following the revision of the Transition Linked
Loan Framework and the issuance of the Mitsui O.S.K. Lines, Ltd. Sustainable
Finance Framework. This includes the following changes:• Revisions due to assessments based on the following added or revised criteria- New criteria added as assessment criteria: GBP, GLP, GBGLs, GLGLs,
SLBP, and SLBGLs- Revised criteria: CTFH, SLLP, and SLLGLs• Reflecting information on the MOL Group's revised Management Plan (MOLBLUE ACTION 2035) and Environmental Vision 2.2

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 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. Introductioni.

About the Fundraiser
Mitsui O.S.K. Lines, Ltd. (hereinafter, “MOL”) is one of the largest multimodal groups, which
has approximately 140 years history, that meets diverse transport needs with one of theworld’s largest merchant fleets. As a full-line marine transport group, MOL operates around800 diverse vessels. Specifically, MOL is developing the following businesses:
Dry Bulk Business：MOL’s dry bulker fleets has a full line up of general-purpose bulk
carrier for transporting various resources such as iron ore, coal andgrains, and has specialized carriers designed and constructed to meetthe specific characteristics, also provides flexible meeting various
trades around the world and high-quality transport services.
Energy Business：MOL contributes to a stable worldwide energy supply through thetransport crude oil, refined petroleum products, liquefied chemical
products and liquefied natural gas (LNG), and the wind power energy
business, offshore businesses. Also, MOL is moving into new
businesses such as Floating equipment.
Product Transport Business：MOL transports a broad range of products, from industrial
products to general consumer goods and automobiles, and provides
extensive logistics services, drawing upon its ocean shipping knowhow and specialized group companies to meet diversified logistics
needs.
Wellbeing & Lifestyle Business：MOL contributes to “people's wellbeing and lifestyles”
centered on the ferry and coastal RORO vessel business, the cruise
business, the real estate business and the foreign human resourcesbusiness.
Associated Business：MOL’s expertise encompasses not only ocean shipping-related
businesses such as tugboat and maritime consulting services, but also
travel, finance, trading, insurance, ICT systems, supporting a nationaloil stockpiling project, sales of nautical charts, CVC (Corporate Venture
Capital), and human resource business.

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ii.

Fundraiser’s initiatives for ESG/SDGs
The MOL Group has identified key issues for sustainable development together with society
through the realization of the Group Vision as “sustainability issues” (materiality). In 2022, inorder to accelerate initiatives to resolve sustainability issues, MOL has set targets, KPIs, andaction plans for each issue and formulated the “MOL Sustainability Plan.” Since 2023, alongwith the formulation of the management plan “BLUE ACTION 2035”, MOL has reviewed thepositioning of the “MOL Sustainability Plan” and incorporated it as part of the “BLUE ACTION
2035,” in order to further integrate it with management.
The MOL Group aims to improve its corporate value over the long term by minimizing thenegative social impact of its business activities while striving to maximize its social value
through contributions to the SDGs and other efforts. For this purpose, MOL has newly
identified five “sustainability issues (materiality),” which are deeply connected with the
management plan.

Table-1 Overview of MOL’s Sustainability Issues (Materiality)
Sustainability Issues (Materiality）

SDGs

Provide sustainable value throughmarine transport and social
infrastructure business
Conservation for marine andglobal environment
Contributing to the growth anddevelopment of people andcommunities
Innovation for development inmarine technology
Governance and compliance tosupport businesses

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iii. Fundraiser’s environmental initiatives
MOL established “MOL Group Environmental Vision 2.2” in April 2023. The Environmental
Vision 2.2 sets out specific action policies, including the development of interim milestones
and specific emission reduction pathways, in order to increase the effectiveness of initiatives
to achieve net zero emissions by 2050.
The “MOL Group Environmental Vision 2.2” identifies risks and opportunities in response to
climate change through three scenario analyses of 1.5°C, 2.0°C, and 2.6°C, and verifies theresilience of the MOL Group's transition plan based on the policy of implementing a transition
plan consistent with the 1.5°C target. Based on the risks and opportunities identified in thesescenario analyses, the MOL Group will accelerate its initiatives to address environmental
issues by setting “medium- and long-term targets” and “five actions to achieve the mediumand long-term targets.”
The “medium-to long-term targets” and “five actions to achieve the targets” in the “MOL
Group Environmental Vision 2.2” are as follows.

Figure-1 MOL Group Environmental Vision 2.2

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iv. About the Sustainable Finance Framework
In advancing the “MOL Group Environmental Vision 2.2”, MOL is working with ambitious
goals for reducing GHG emissions in line with the GHG emission reduction targets compliedby the International Maritime Organization (IMO), an international organization in the
shipping industry, and the Ministry of Land, Infrastructure, Transport and Tourism*1.
The MOL group will set the ambitious GHG emission reduction target as a Sustainability
Performance Target and raise part of the funds needed to achieve the target through bonds
or loans, either as transition finance with specific use of proceeds or as transition linked
finance, where the achievement of KPIs/SPTs and financial and structural incentives arelinked without specifying the use of proceeds.
MOL believes that it will be an opportunity to disseminate MOL’s wide-ranging environmental
strategy initiative through the implementation of finance.
MOL has established the Mitsui O.S.K. Lines, Ltd. Sustainable Finance Framework(hereinafter, the “Framework”) in order to implement the above-mentioned finance in amanner that conforms to the internationally established frameworks.
The criteria which this Framework specifically referred to is described in (3) of Section II
below.
*

1: “Roadmap to Zero Emissions from International Shipping” formulated in collaboration with 2023 IMO

Strategy on Reduction of GHG Emissions from Ships, the Ministry of Land, Infrastructure, Transport andTourism, shipping, shipbuilding, and maritime industries, research institutes, and public institutions(Sponsored by the Japan Ship Technology Research Association)

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v.

Fundraiser’s transition strategy for decarbonization(1)

Strategies by sector (industry) at the international/national/regional level

Figure-2 shows the outlines of IMO’s GHG emission reduction targets and their pathway. IMO
focuses on measures for emission reduction, by design and technology (reduction of fuelconsumption), improvement of operation efficiency technological innovation and fuelconversion (introduction of low-carbon/zero-carbon fuel) and various technologies.
In Japan, in March 2020, MOL has collaborated with the Ministry of Land, Infrastructure,
Transport and Tourism, as well as the shipping, shipbuilding, and marine maritime industries,
research institutes, and public institutions to create a “Roadmap to Zero Emission fromInternational Shipping” (Sponsored by the Japan Ship Technology Research Association). This
roadmap shows Japan’s initiatives (international treaty formulation, technologicaldevelopment) in a manner consistent with the goals of the IMO.
MOL has set GHG emission reduction targets, including fuel conversion, as a low-carbon anddecarbonization strategy for its core businesses, based on international and national policies,
such as IMO and the Ministry of Land, Infrastructure, Transport and Tourism.

Figure-2 Roadmap to Zero Emission from International Shipping MLIT (maritime) website
https://www.mlit.go.jp/en/maritime/GHG_roadmap_en.html

Furthermore, in July 2023, IMO revised the “IMO GHG Reduction Strategy (2018)” andadopted the “2023 IMO Strategy on Reduction of GHG Emissions from Ships,” whichstrengthened the GHG emission reduction target from international shipping to “zero GHG
emissions by around 2050.”

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Figure-3 GHG emission reduction targets from ships based on the 2023 IMO GHG Strategy
https://www.imo.org/en/MediaCentre/HotTopics/Pages/Cutting-GHG-emissions.aspx(2) Transition strategies of the Fundraiser
The MOL Group positions the activities to contribute to the above-mentioned emission
reduction targets of IMO, the Ministry of Land, Infrastructure, Transport and Tourism, etc.,
and the activities aimed at achieving the target defined by “MOL Group Environmental Vision2.2” as transition strategies.
Figure-4 shows a conceptual diagram of the MOL Group’s Pathway to Net Zero GHG
Emissions associated with medium- to long-term targets. The MOL Group has set a target to
reduce GHG emissions intensity by approximately 45% by 2035 (versus 2019). In addition,
Figure-5 shows the quantitative KPIs and milestones that measure progress for each action
to ensure achievement of net zero emissions by 2050.
The MOL’s Group’s reduction rate is different from the IMO and the Ministry of Land,
Infrastructure, Transport and Tourism because the MOL Group's targets by 2035 aredifferent from base year (2008) and target year (2030) set by the IMO and the Ministry ofLand, Infrastructure, Transport and Tourism mentioned above. However, from theestimation results based on the SPT calibration results described later, it has been confirmedthat the MOL Group’s GHG emission intensity reduction target is consistent with the targetsof IMO and the Ministry of Land, Infrastructure, Transport and Tourism.
In addition, the overview of MOL's environmental initiatives, including climate change
response, is disclosed on its website as “MOL Group Environmental Vision 2.2.”

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* Scope: all of Scopes 1, 2 and 3 in the entire MOL Group (consolidated scope).
* In the net-zero target year (2050), the net emissions are calculated by offsetting theremaining gross emissions by the quantity of negative emissions. However, for the
calculation of annual emissions in earlier years, gross emissions will be used and nooffsetting by negative emissions will be carried out.
Figure-4 Pathway to Net Zero Emissions associated with the medium- to long-term targets
MOL has established quantitative KPIs and milestones to measure progress for each action
to ensure achievement of net zero emissions by 2050, as shown in the figure below (Figure5). In addition, the followings have been set as KPIs and milestones for the Environmental
Vision 2.2 as a whole.
• Environmental investment in 2025: 650 billion yen (cumulative total since FY2023)• A 23% reduction in total GHG emissions in 2030 (compared to 2019)

Figure-5 KPIs and milestones

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(3) Governance of the Fundraiser (for environmental management)
Figure-6 shows MOL’s system for environmental initiatives.
MOL has established an environmental management system with the President & CEO as thechief executive, and environmental initiatives, including climate change measures as well as
natural capital/biodiversity, are deliberated mainly by the Environment & Sustainability
Committee, a subordinate body of the Executive Committee.
The Board of Directors is responsible for the supervision of environmental initiatives, andparticularly important matters are decided by the Board of Directors. In addition, part of theassessment of the long-term target contribution variable remuneration (accounting for 20% of
the total) for the CEO and CESO (Chief Environment and Sustainability Officer) and otherexecutive directors reflects the progress made in addressing climate change and othersustainability-related initiatives.
The Environment & Sustainability Committee, with the Environment & Sustainability Strategy
Division as its lead division, is responsible for regularly monitoring the status of response to
climate change risks and opportunities based on TCFD scenario analysis, checking the impact
on the business from a long-term perspective, and developing medium- and long-term
environmental targets, as well as for the achievement status and the promotion ofenvironmental and emission-free projects.

Figure-6 MOL's environmental governance organization (as of the end of April 2023)

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Ⅱ. Scope and Objectives
MOL has commissioned DNV to conduct an eligibility assessment of the “Mitsui O.S.K. Lines, Ltd.
Sustainable Finance Framework.” The objective of DNV’s assessment is to implement an assessment toconfirm that the Framework meets the standards and guidelines described below (refer to thefollowing), and to provide a second party opinion on the eligibility of the Framework.
DNV, as an external reviewer, assessed the eligibility of the Framework. Specifically, DNV applied
frameworks (e.g., principles and guidelines) focusing on (3) below to provide an assessment of theeligibility of the Framework.
DNV, as an independent external reviewer, has identified no real or perceived conflict of interest
associated with the delivery of this second party opinion for MOL.
In this paper, no assurance is provided regarding the financial performance of the sustainable finance,
the value of any investments, or the long-term environmental benefits of the transaction.

Green finance and transition finance with specific use of proceeds* Items are listed around GBP, but will be replaced with loan-specific items where appropriate.

(1) Scope of review
The review assessed the following elements and confirmed their alignment with the gist of GBP/GLP:☒

Use of Proceeds☒

Process for Project Evaluation and Selection☒

Management of Proceeds☒

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

Second party opinion☐

Certification☐

Verification☐

Rating☐Other (please specify):

Sustainability finance and transition finance with general corporate purpose* Items are listed around SLBP, but will be replaced with loan-specific items where appropriate.

(1) Structure of bonds at the time of issuance☒

Stepping up the structure☒

Changes in reimbursement structures* Any of the above or set individually based on the Fundraiser's internal process at the time of financeimplementation.

(2) Scope of review*
The review assessed the following elements and confirmed their alignment with the gist of SLBP/SLLP:☒

Assess all the following elements(all elements assessment)☐

Assess only some elements (partial assessment)☒

Selection of KPIs☒

Bond characteristics

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☒Calibration of SPTs☒

Verification☒

Furthermore, check consistency
with SLBP☒

Reporting* The scope of review is applied as the assessment part for transition finance with general corporate
purpose.
* The four disclosure elements of CTFH/CTFBG are also included in the scope of review.

(3) Role(s) of review provider (general corporate purpose)☒

Second party opinion☐

Certification☐

Verification☐

RatingStandards/guidelines to be applied
No.

Standards/guidelines

1.

Climate Transition Finance Handbook (CTFH)*1

2.

Scheme ownerBasic Guidelines on Climate Transition Finance(CTFBG) *2

International Capital Market Association (ICMA),
2023
Financial Services Agency, Ministry of Economy,
Trade and Industry, Ministry of theEnvironment, 2021
International Capital Market Association (ICMA),

3.

Green Bond Principles (GBP)

4.

Green Loan Principles (GLP)

5.

Green Bond Guidelines (GBGLs)

Ministry of the Environment, 2022

6.

Green Loan Guidelines (GLGLs)

Ministry of the Environment, 2022

7.

Sustainability Linked Bond Principles (SLBP)

8.

Sustainability Linked Bond Guidelines (SLBGLs) Ministry of the Environment, 2022

9.

Sustainability Linked Loan Principles (SLLP)*3

10.

2021
Loan Market Association (LMA) and others,
2023

Sustainability Linked Loan Guidelines (SLLGLs)*3

International Capital Market Association (ICMA),
2023
Loan Market Association (LMA) and others,
2023
Ministry of the Environment, 2022

*1 Climate Transition: The concept of climate transition focuses principally on the credibility of the Fundraiser’s
climate change-related commitments and practices (quoted from CTFH).
*2 They confirm compliance with the four core elements of transition (use of proceeds, process for project
evaluation and selection, management of proceeds, reporting) etc., which should be met when implemented asa bond/loan with a specific use of proceeds (quoted and edited from CTFBG).
*3 Sustainability Linked Loan: Sustainability linked loans are any types of loan instruments and/or contingent
facilities (such as bonding lines, guarantee lines or letters of credit) which incentivize the borrower’s
achievement of ambitious, predetermined sustainability performance objectives. (quoted from SLLP. *SLBP is
also defined as the same and is assessed.) They confirm compliance with the five elements etc., which should
also be met when implementing transition linked finance with general corporate purpose.

Page 17 of 65

Ⅲ.

Responsibilities of MOL and DNV

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

Ⅳ. Basis of DNV’s Opinion
To provide as much flexibility for the Fundraiser, MOL as possible, we have adapted our sustainablefinance assessment methodologies, which incorporates the requirements of the CTFH, CTFBG, GBP,
GLP, GBGLs, GLGLs, SLBP, SLBGLs, SLLP, and SLLGLs, to create a Sustainable Finance Eligibility
Assessment Protocol (hereinafter, the “Protocol”). Please refer to Schedule-2. The Protocol is applicableto finance under the CTFH, CTFBG, GBP, GLP, GBGLs, GLGLs, SLBP, SLBGLs, SLLP, and SLLGLs.
DNV, as an independent external reviewer, provides 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 criteria is that a Green Finance and Climate Transition Financewith/without specific use of proceeds should:“enable capital-raising and investment for new and existing projects with environmental benefits”“provide an investment opportunity with transparent sustainability credentials””be important (as climate transition) through KPIs and SPTs, quantitative, pre-determined, ambitious,
regularly monitored, and encourage the achievement of ESG (in terms of climate transition) of theFundraiser that can be externally validated”

As per our Protocol, the criteria against this sustainable finance to be reviewed is grouped into thefollowing elements, represented by the CTFH, CTFBG, GBP, GLP, GBGLs, GLGLs, SLBP, SLBGLs, SLLP,and SLLGLs:(1) Four common elements of CTFH and CTFBG (disclosure elements)
Principle one: Issuer’s climate transition strategy and governanceIt should be shown that the financing purpose is to enable the Fundraiser’s climatetransition strategy.
Principle two: Business model environmental materiality
The planned climate transition trajectory should be relevant to the environmentallymaterialities of the Fundraiser’s business model.
Principle three: Climate transition strategy and targets to be science-based

Page 18 of 65

The Fundraiser’s climate transition strategy should reference science-based targets andtransition pathways.
Principle four: Implementation transparency
Market communication in connection with the offer of a financing instrument which has theaim of funding the Fundraiser’s climate transition strategy should also provide
transparency of underlying investment program.

(2) Four elements of GBP/GBGLs and GLP/GLGLs
Principle One: Use of Proceeds
The Use of Proceeds criteria are guided by the requirement that a fundraiser of asustainable finance must use the proceeds to eligible activities. The eligible activities
should produce clear environmental benefits.
Principle Two: Process for Project Evaluation and Selection
The Process for Project Evaluation and Selection criteria are guided by therequirements that a fundraiser of a sustainable finance should outline the process it
follows when determining eligibility of an investment using sustainable financeproceeds, and outline any impact objectives it will consider.
Principle Three: Management of Proceeds
The Management of Proceeds criteria are guided by the requirements that asustainable finance should be tracked within the fundraising organization, that separate
portfolios should be created when necessary and that a declaration of how unallocatedproceeds will be handled should be made.
Principle Four: Reporting
The Reporting criteria are guided by the recommendation that at least Sustainability
Reporting to the bond investors and loan lenders should be made of the use ofproceeds and that quantitative and/or qualitative performance indicators should be
used, where feasible.
* GLGLs set out requirements for loan-specific elements (internal reviews).

*1(3) Five elements of SLBP/SLBGLs and SLLP/SLLGLs

Principle one: Selection of Key Performance Indicators (KPIs)
The Fundraiser of a sustainability linked finance or transition linked finance should clearlycommunicate its overall sustainability objectives, as set out in its sustainability strategy, andhow these relate to its proposed SPTs to investors or lenders. The KPI should be reliable,material to the Fundraiser’s core sustainability and business strategies, address relevant
ESG challenges of the industry sector, and be under management control.
Principle two: Calibration of Sustainability Performance Targets (SPTs)

Page 19 of 65

The SPTs should be ambitious, meaningful, and realistic. The target setting should be donein good faith and based on a sustainability improvement in relation to a predetermined
performance target benchmark.
Principle Three: Finance Characteristics
The finance will need to include a financial and/or structural impact depending on whether
the selected KPIs reach (or not) the predefined SPTs. The finance documentation needs torequire the definitions of the KPI(s) and SPT(s) and the potential variation of the financial
and/or structural characteristics of the sustainable linked finance or transition linked
finance. Any fallback mechanisms in case the SPTs cannot be calculated or observed in asatisfactory manner, should be explained.
Principle Four: Reporting
The Fundraiser should publish and keep readily available and easily accessible up to date
information on the performance of the selected KPI(s), as well as a verification assurance
report (see Principle 5) outlining the performance against the SPTs and the related impact
and timing of such impact on the finance’s financial and/or structural characteristics, withsuch information to be provided to those institutions participating in the finance or toinvestors or lenders participating in the finance at least once per annum.
Principle Five: Verification
The Fundraiser should have its performance against its SPTs independently verified by aqualified external reviewer with relevant expertise, at least once per annum. The
verification of the performance against the SPTs should be made publicly available.
*1: Sustainability Linked Finance: DNV’s Protocol consists of five requirements set under SLBP (2023)/SLLP(2023) and includes SLLGLs.

Page 20 of 65

Ⅴ. Work Undertaken
Our work constituted a comprehensive review of the available information, based on theunderstanding that this information was provided to us by the Fundraiser in good faith. In theverification of the Framework, we have not performed an audit or other tests to check the veracity of
the information provided to us. In the case of implementing transition linked finance with general
corporate purpose, MOL plans to be verified by a third-party organization on information related to
SPT.
The work undertaken to form our opinion included:i. Pre-funding assessment•

Creation of a MOL-specific Protocol, adapted to the purpose of the Framework, as describedabove and after Schedule-3 to this Assessment;•

Assessment of documentary evidence provided by MOL on the Framework and supplemented
assessment by a comprehensive desktop research. These checks refer to current assessment
best practices and standards methodology;•

Discussions with MOL, and review of relevant documentation;•

Documentation of findings against each element of the criteria.

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

Interview with MOL management, and review (or verification) of the relevant documentation;•

Field research and inspection (if necessary);•

Document creation of post-financing assessment observation result.

Page 21 of 65

Ⅵ. Findings and DNV’s Opinion
DNV’s findings and opinion are as described in (1), (2), and (3) below.
From the CTF-1 to 4 in (1) below are the findings and opinions of DNV against the disclosure elementsof the CTFH and CTFBG as Climate Transition Finance applied to the MOL Sustainable Finance.
Please see Schedule-3 for details.
From the GBP/GLP 1 to 4 in (2) below are the findings and opinions of DNV against the requirement of
the GBP, GLP, GBGLs, and GLGLs as green/transition finance applied to the MOL Sustainable Finance.
Please see Schedule-4 for details.
From the SLBP/SLLP 1 to 5 in (3) below are the findings and opinions of DNV against the requirementof the SLBP, SLLP, SLBGLs, and SLLGLs as transition linked finance*1 applied to the MOL Sustainable
Finance.
Please see Schedule-5 for details.
*1: Bonds or loans with potential financial and structural changes linked to the achievement of futuretransition goals(1) Findings and opinions of DNV against the four common elements of the CTFH
and CTFBG (disclosure elements)
CTF-1

Issuer’s climate transition strategy and governance-

The MOL Group revised its Environmental Vision and formulated the “MOL Group
Environmental Vision 2.2” in April 2023. In the “MOL Group Environmental Vision
2.2,” MOL has set environmental corporate strategies based on identification of risk
and opportunity and scenario analysis using TCFD guidance. The “MOL Group
Environmental Vision 2.2” also shows transition strategy and pathway/trajectory as a
medium- to long-term target from 2023 to 2050 and as a pathway to the MOLGroup’s Net Zero Emissions.

-

Based on the science-based evidence quantified by the MOL Group, DNV reviewed
and confirmed that MOL's targets are aligned with the goals of the Paris Agreement.

-

The MOL Group's transition strategy has identified the medium-term target towards
achievement of 2050 net zero emissions, which incorporates environmental targets of
IMO, the Ministry of Land, Infrastructure, Transport and Tourism, etc. Specific GHG
reduction targets of the MOL Group are shown below.
•

Long-term target: Net zero emission in the entire group by 2050•

Medium-term target: A 45% reduction in GHG emission intensity fromtransportation by 2035 (compared to 2019)-

The MOL Group has established a system and mechanism to promote the transition
strategy, at the management level. The transition strategy includes a clear
investment plan and the technologies to be utilized to achieve net zero emissions.
Specifically, the company plans to make environmental investments amounting toPage 22 of 65

650 billion yen over the three-year period from 2023 to 2025. These environmental
investments will be allocated to activities that reduce GHG emissions from thecompany, such as the construction of alternative fuel vessels and wind power
utilization equipment, and to the expansion of low-carbon and decarbonized energy
businesses, including offshore wind power-related projects and clean energy
production and transportation.
-

The MOL Group has clarified its contributions to the SDGs, while minimizing thenegative impact (negative external effects) on society through business activities.

-

Based on the Framework, the “MOL Group Environmental Vision 2.2,” andassessment of the implementation plan, DNV confirmed that they are well alignedwith the MOL Group’s transition strategy. DNV has confirmed that implementationplans based on transition strategies are reliable, ambitious, and achievable.

Page 23 of 65

CTF-2Business model environmental materiality-

Of the MOL Group's business activities, CO2 (GHG) emissions (Scope 1) from ship
operations account for about three quarters of the total. KPI set by the MOL
Sustainable Finance utilizes EEOI (see SLLP-1 below) and focuses on CO2 (GHG)
emission reduction generated by the ship operations.

-

The MOL Group's GHG emission reduction plan covers from Scope 1 to Scope 3, iswell aligned with the goals of the shipping industry set by IMO, the Ministry of Land,
Infrastructure, Transport and Tourism, etc., and aims to exceed them.

-

DNV confirmed that the MOL Group's transition plan is the core business activity of
the MOL Group, which contributes to the environment and supports commercial
driving force. The MOL Group's planned transition strategies and transition pathway
are associated with the priority themes and materials defined by the MOL Group, andcontribute to important environmental benefits (impacts) from a qualitative andquantitative perspective.

CTF-3

Climate transition strategy and targets to be science-based-

The MOL Group has set a transition plan that is consistent with the Paris Agreement
based on science-based evidence, and a transition trajectory that is consistent withthe goals of IMO, the Ministry of Land, Infrastructure, Transport and Tourism, etc.

-

DNV confirmed that the MOL Group’s transition strategy is quantified based on
consistent measurement methodology and has absolute meaning (meaning material
reductions as total GHG emissions). Base year and past emission results are also
disclosed in terms of GHG emissions results (in absolute terms), including Scope 3
material categories.

-

DNV confirmed that the MOL Group’s transition strategy has been established as
milestones with short-term targets, medium-term targets, and long-term targets thatexceed the targets of IMO, the Ministry of Land, Infrastructure, Transport andTourism, etc. The MOL Group's transition strategy also includes initiatives to address
Scope 3, including the use of CO2 capture technologies, absorption and removal
systems carbon credits to offset the eventual remaining GHG emissions.

-Five actions in the “MOL Group Environmental Vision 2.2” are approaches to reducing
GHG emissions including Scope 1 to Scope 3 and are applied in specific plans. Amongthese, as a medium-term target up to FY2035, MOL has set a target value using EEOI
as the GHG emission intensity in transportation. Please see Schedule-2 for
information on EEOI.

CTF-4

Implementation transparency-

DNV confirmed that the investment and deployment plans associated with the MOLGroup's transition strategy include consensus building on future investment andexpenditure. As a specific example, MOL has an environmental investment plan
expected to be about 650 billion yen over the three-year period from FY2023 to
FY2025, which exceeds 50% of the total investment amount during the period. These
investment plans have been drawn up taking into account the impact of risks andPage 24 of 65

opportunities based on the results of scenario analysis on the MOL Group's profit andloss, and the assumed internal carbon price.
-

DNV also reviewed the Framework and the “MOL Group Environmental Vision 2.2”
and confirmed that the implementation was highly transparent and that the MOLGroup explained and agreed on the adequacy of the implementation.

(2) Findings and opinions of DNV against the four common elements of the GBP,
GLP, GBGLs, and GLGLs
GBP/GLP-1. Use of Proceeds-

MOL defines eligible projects to which proceeds are allocated as those that meet therequirements of the transition strategy and related frameworks. Eligible projects
relate to the five actions that underpin the MOL Group's transition strategy. See
Table-2 on the next page for the specific eligible projects envisaged.

-

DNV has confirmed that of the full amount of proceeds raised by MOL throughgreen/transition finance, all of the net proceeds, excluding expenses, will be allocatedto capital expenditure, research and development, equity investment, and investment
in eligible projects that meet the MOL Group's investment plan to implement its
transition strategy, both as new investment and refinancing. These projects havebeen assessed as providing clear environmental benefits to the transition strategy andare expected to contribute to the SDGs. These processes are consistent with
GBP/GLP-1.

Table-2 Green/transition eligible projects

MOL’s actions

Main envisaged eligible projects

Eligible project
categories
Green*1

・ Capital investment, research andTransition*2◯

development, investment, etc. in
LNG/methanol-fuelled vessels・ Capital investment, research and01

Adopt Clean Energy

◯

◯

◯

◯

development, investment, etc. related toships with engines capable of using fuelsthat are recognized as zero emission
・ Capital investment etc. in the
introduction of renewable electricity
・ Capital investment, research and

02

Further Adopt
Energy-saving
Technologies◯

development, investment, etc. related toWind Challenger-equipped vessels・ Capital investment, research anddevelopment, investment, etc. in the

Page 25 of 65◯

introduction of wind propulsion
equipment and technology such as rotor
sails other than Wind Challenger
・ Capital investment, research and◯development, etc. related to energy-

03

Efficient Operations

saving/environmental protection
technologies and equipment to be
retrofitted to existing vessels

04

Build Business
Models that Enable
Net Zero Emissions

・ Investment etc. in projects to remove◯◯

and store CO2 from the atmosphere in
relation to negative emissions initiatives
・ Capital investment, research and◯development, investment, etc. inbuilding ammonia and hydrogen supply
chains05

Expand Lowcarbon/decarbonizedBusiness by
Leveraging theGroup’s Collective
Strengths

・ Capital investment, research and

◯

◯

(◯)

◯

◯

◯

development, investment, etc. in
offshore wind power-related projects
・ Capital investment, research anddevelopment, investment, etc. in
CCS/CCUS projects
・ Capital investment, research anddevelopment, investment, etc. in marine
clean energy projects*1 A typical green eligible project category exemplified by GBP/GBGLs and GLP/GLGLs. In addition to
being eligible for inclusion in green finance, projects that qualify as green projects are permitted
within the CTFBG to be included as part of transition finance.
*2 Representative transition projects that are exemplified in the CTFBG as business transformations
that meet the transition strategy of the Fundraiser and contribute to the realization of the Paris
Agreement. Projects classified as transition-eligible projects at present may become green projects
through the application of future technological innovations (e.g., application of green fuels,
achievement of performance that meets CO2 emission standards as a green project). The
development and provision of products and services in new sectors is related to the overall projects
listed in Table-1.

Use of proceeds classified under GBP/GLP☒

Renewable energy☐

Energy efficiency (Energy savings)☒

Pollution prevention and control☐

Environmentally sustainable management of
biological natural resources and land use☐

Conservation of terrestrial and aquatic☒

Clean transportation

biodiversity

Page 26 of 65

☐Sustainable water resources and☐Adaptation to climate change☐

Green buildings with locally, nationally, or

wastewater management☐

Highly eco-efficient products,
environmentally adapted products,

internationally recognized standards orenvironmentally friendly production

certifications

technologies and processes☒

Other (please specify): Projects based on the Fundraiser’s transition strategy (transition
projects)☒

Undecided at the time of financing implementation, but expected to fit into the GBP/GLP
classification or other eligibility areas not currently listed in the GBP/GLP; projects based on
the Fundraiser's transition strategy (transition projects)

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

MOL assesses that eligible projects meet the GBP/GLP-1 eligibility criteria and selects
eligible projects. The Finance Division, taking into account the latest environmental
vision and other environmental sustainability targets, and with the advice of the
Corporate Planning Division, the divisions with jurisdiction over eligible projects, andthe Technology Innovation Unit where necessary, selects projects for allocation throughan appropriate process in accordance with the defined requirements for eligible
projects. The Environment & Sustainability Strategy Division verifies and confirms theappropriateness and eligibility of the projects, then CFO gives the final approval.

Evaluation and selection☒

Consistent with the achievement of the☒

Projects have been assessed and selectedenvironmental contribution targets of thethrough a documented process that

Fundraiser

demonstrates that they meet the definedeligibility categories.

☒

The project is an eligible use of green bond☒Potential ESG risks associated with projectproceeds and is transparent.

implementation have been assessed and selected
through a documented process to identify andmanage them.

☒

The evaluation and selection of projects are☐

Other (please specify):

based on published criteria abstracts.

Information on responsibility and accountability☒

Evaluation/selection criteria based on advice☒

Evaluation within the organizationor verification by external bodies☐

Other (please specify):

Page 27 of 65

GBP/GLP-3. Management of Proceeds-

The proceeds are fully tied to the selected eligible projects. Specifically, the Finance
Division manages the allocation status using an internal system and shares thisinformation with the relevant divisions.

-This internal system will allow tracking and confirmation over the redemption period
or until loan maturity, and will ensure that the proceeds are properly managed.

-

The proceeds are promptly allocated to eligible projects and, where unallocatedproceeds arise, an amount equal to the unallocated proceeds is maintained as cash or
cash equivalents.

Tracking and managing proceeds:☒

Part or all of the proceeds from green finance that are planned to be allocated aresystematically differentiated or tracked by the Fundraiser.

☒

The type of temporary investment and schedule of unallocated proceeds is disclosed.

☐

Other (please specify):

Additional disclosure:☐

Allocated to new investments only☒

Allocated to both existing and newinvestments☒

Allocated to individual (project)☐

Allocated to portfolio disbursements☒

Other (please specify): The amount of

disbursements☐

Disclose portfolio of unallocatedproceeds

existing and new investments and loans inprojects eligible for green/transition financeallocations will be disclosed annually (only inthe case of bonds) or to lenders (only in thecase of loans).

GBP/GLP-4. Reporting-

MOL will, so far as is reasonably practicable and within the limits of confidentiality
obligations, disclose the following information on the allocation of proceeds fromsustainable finance and environmental benefits, until the full amount of proceedsfrom sustainable finance has been allocated to eligible projects, on an annual basis on
the website in the case of bonds, or to lenders in the case of loans.

<Allocation status>
Allocated amount per action

Amount and allocation policy of unallocated proceeds, if any

Page 28 of 65

<Environmental benefits>
MOL’s actions

Main envisaged eligible
projects
・ Capital investment, research anddevelopment, investment, etc. in
LNG/methanol-fuelled vessels・ Capital investment, research and01

Adopt Clean Energy

development, investment, etc.
related to ships with engines
capable of using fuels that arerecognized as zero emission
・ Capital investment etc. in the
introduction of renewable electricity

Environmental benefits*(impact reporting
indicators)
・ Number of LNG/methanolfuelled vessels
・ Number of zero emission
ocean-going vessels
・ CO2 emission reduction rate(%) compared with heavy oil
fuels
・ Share of renewable energy inelectricity (%)

・ Capital investment, research anddevelopment, investment, etc.
related to Wind Challenger-

02

Further Adopt
Energy-saving
Technologies

equipped vessels・ Capital investment, research anddevelopment, investment, etc. in
the introduction of wind propulsion
equipment and technology such as

・ Number of vessels equippedwith Wind Challenger
・ Number of vessels with rotor
sails etc.
・ Overview of wind propulsion
systems

rotor sails other than Wind
Challenger
・ Capital investment, research anddevelopment, etc. related to03

Efficient Operations

energy-saving/environmental
protection technologies and・ Fuel efficiency(megajoules/tonne mile)equipment to be retrofitted toexisting vessels

04

Build Business
Models that Enable
Net Zero Emissions

・ Investment etc. in projects toremove and store CO2 from theatmosphere in relation to negativeemissions initiatives

・ Absorption and removal
system carbon credit usage(tonnes CO2)・ Capital investment, research and05

Expand Lowcarbon/decarbonizedBusiness by
Leveraging theGroup’s Collective
Strengths

development, investment, etc. in・ Overview of initiatives tobuilding ammonia and hydrogenbuild the ammonia andsupply chains
・ Capital investment, research anddevelopment, investment, etc. in
offshore wind power-relatedhydrogen supply chain
・ Offshore wind power
generation capacity (MW)・ Overview of the CCS/CCUS
project

projects
・ Capital investment, research anddevelopment, investment, etc. in
CCS/CCUS projects

Page 29 of 65

・ Overview of marine clean
energy projects

・ Capital investment, research and・ Electricity generation capacity

development, investment, etc. infrom marine clean energy

marine clean energy projects(MW)* Adopt appropriate indicators depending on the nature of the eligible project.

(3) Findings and opinions of DNV against the five elements*1 of the SLBP/SLLP*1: Including SLBGLs/SLLGLs

SLBP/SLLP-1-

Selection of Key Performance Indicators (KPIs)

DNV has reviewed MOL sustainability KPI and confirmed that the chosen KPI is material
and relevant to the company’s core sustainability and business strategies.

-

Core to MOL’s business strategy is to play the role of social infrastructure, which isindispensable for maintaining people’s activities through marine transportation services.
Core to MOL’s sustainability strategy is identified as five sustainability issues(materiality). Please see Table-1 in I (ii) for details.

-

Among these, the material KPI for MOL Sustainable Finance is GHG emission reduction
centered on the marine and global environmental conservation. Since the share of
MOL's total GHG emissions (Scope 1 to Scope 3) from ship operations is approximately
75%, EEOI is highly adequate to be chosen as KPI. This is explained as three mediumto long-term targets and five actions in the “MOL Group Environmental Vision 2.2,”
being focused on emission reduction from the company and society towards net zero
emissions in 2050.

-

The chosen KPI is as follows:Energy Efficiency Operational Indicator (EEOI)
Unit：g-CO2e(GHG)/mile/tonne

𝑬𝑬𝑶𝑰 (𝒈𝒓𝒂𝒎 − 𝑪𝑶𝟐𝒆/𝒎𝒊𝒍𝒆/𝒕𝒐𝒏𝒏𝒆)
𝑬𝒎𝒊𝒔𝒔𝒊𝒐𝒏𝒔 (𝒈𝒓𝒂𝒎 − 𝑪𝑶𝟐𝒆)=
𝑫𝒊𝒔𝒕𝒂𝒏𝒄𝒆 𝒔𝒂𝒊𝒍𝒆𝒅(𝒎𝒊𝒍𝒆) 𝒙 𝑪𝒂𝒓𝒈𝒐 𝒄𝒂𝒓𝒓𝒊𝒆𝒅 (𝒕𝒐𝒏𝒏𝒆)
Emission (gram-CO2e): CO2e (GHG) emissions from ships (gram)Distance sailed (mile): Operating distance (miles)
Cargo carried (tonne): Cargo weight (tonne)
The company-wide average is calculated in total in the following way, using astandardized methodology designed to compensate for the impact of the greater or
lesser absolute intensity derived from the business characteristics of each segment on
the calculation of the company-wide average, and to ensure that the efficiency gains
achieved by each division are properly reflected in the company-wide average.
➢

Base year: Calculated by dividing the total GHG emissions of all segments by the
total tonne-miles of all segments➢

Target years after the base year: The EEOI reduction rate compared to the baseyear is calculated for each segment. The contribution rate to the total is thenPage 30 of 65

determined according to the project scale, calculated based on the energy
consumption of each segment, and the EEOI reduction rate of each segment isthen weighted and averaged with that contribution rate.
GHG emissions cover the fuel combustion phase emissions (Scope 1) and part of thefuel production phase emissions (Scope 3/Category 3) on the MOL Group's own oceangoing vessels.

-

EEOI selected as the KPI is an indicator to measure the CO2 emission performance ofship operations and is widely used in the shipping industry, of which calculation
methodology is defined by IMO. The IMO guidelines indicate that the use of EEOI is arecognized approach as a methodology for assessing GHG emissions from the ships.

-

The KPI is to measure relative carbon intensity (GHG emission intensity) reduction ofits shipping operations and is highly relevant to MOL’s business strategy now and forthe foreseeable future.

-

In terms of MOL’s broader business strategy, DNV acknowledges that reducing EEOI
will be a key driver of lowering operational costs for the vessel operation. Therefore,
the EEOI as a KPI will contribute to both the environmental sustainability targets andMOL’s business strategy.

-

DNV concludes that the EEOI as a KPI is measurable based on a consistentmethodology, externally verifiable, and able to be benchmarked to external references.
DNV concludes that EEOI is a robust and reliable indicator to measure GHG emission
reduction for from the ships.

-

IMO GHG Strategy on reduction of GHG emissions, adopted in 2018 and revised in
2023, can be used as external reference to benchmark of MOL’s level of ambition. IMO
has set GHG reduction targets for 2030 and 2040, with 2008 as the base year, toachieve zero GHG emissions in 2050. IMO's reduction target for 2030 calls for a 40%
reduction in CO2 emissions per transport volume and a 5-10% use of zero emission
fuels etc. The Ministry of Land, Infrastructure, Transport and Tourism's “Roadmap to
Zero Emissions from International Shipping” (sponsored by the Japan Ship Technology
Research Association), which has referenced to IMO, sets goals that are consistent with
IMO.

-

MOL’s targets and the targets of IMO, the Ministry of Land, Infrastructure, Transport
and Tourism, etc. have different base years. However, DNV confirmed that MOL has
standardized to directly compare the two based on past performance data, public
information, etc., and that the KPI was properly set as an indicator that can be directlycompared with the targets of IMO, the Ministry of Land, Infrastructure, Transport andTourism, etc.

-

DNV confirmed that the KPI (EEOI) chosen by MOL provides a clear evaluation scopeand calculation methodology. Please see Schedule-2 for details.

Page 31 of 65

SLBP/SLLP-2-

Calibration of Sustainability Performance Targets (SPTs)

DNV confirmed that SPT supports the three medium-to long-term targets and fiveactions set forth in the “MOL Group Environmental Vision 2.2,” has goals that are alignedwith the goals of IMO, the Ministry of Land, Infrastructure, Transport and Tourism, etc.,
and has specific plans inherent. DNV therefore confirmed that the SPT is ambitious,
realistic and meaningful. DNV also confirmed that the achievement of SPT is in line with
MOL’s overall sustainability/ESG strategy.

-

Based on MOL's fleet configuration transition plan provided to DNV, DNV concludes that
SPT is realistic, the plan is feasible, and it is likely to achieve the SPT objectives outlinedin the Framework. It was confirmed that the 45% reduction in EEOI by 2035 comparedto the 2019 baseline set by MOL, when converted to the baseline of IMO, the Ministry ofLand, Infrastructure, Transport and Tourism, etc., is an ambitious target aligned with thetargets of IMO, the Ministry of Land, Infrastructure, Transport and Tourism, etc. for theentire period from 2019 to 2035 and goes beyond “Business as Usual.” This target
setting is expected to be a driving force for MOL's efforts to implement its sustainability
strategy.

-

DNV confirmed that the SPT target setting exercise has been based on an appropriate
combination of benchmarking approaches.
•

DNV confirmed that the Framework provides guidance for target setting from2023 to 2035 by the KPI information, which is based on the appropriate data
and actual results, for more than three years from 2008 to 2022 by benchmarking approach.

•

DNV concludes that the SPT outlined in the Framework is aligned with the SPTof industry standard (target of IMO, Ministry of Land, Infrastructure,
Transport and Tourism, etc.).

•

DNV concludes that the SPT is put in an appropriate context of international
climate change mitigation efforts. The Framework highlights MOL’s ambition
to “work on achieving the goals of the Paris Agreement”. The SPT can be seen
as aiming to outperform IMO’s GHG emission reduction targets. The broader
purpose adopted by MOL is supported by the three medium- to long-termtargets and five actions in the “MOL Group Environmental Vision 2.2.” This
includes national goals, Best Available Technology, or other closetechnologies.

-

DNV has confirmed that the SPT target setting is properly disclosed as follows:•

The timelines of SPT target achievement have clearly been disclosed, at anannual frequency leading up to 2035. MOL has set the corresponding target
observation dates for specified trigger events for each fiscal year. DNV
confirmed that the annual SPT is planned to be set over the entire financing
period for 2035 and beyond through a benchmarking approach.

•The baseline for SPT has been set as 2019 set using the latest available dataof GHG emissions. This is different from the baseline (2008) of IMO, thePage 32 of 65

Ministry of Land, Infrastructure, Transport and Tourism, etc., but isstandardized by MOL’s appropriate trial calculation adjustment(intercomparison is possible).
•Through the Framework and the “MOL Environmental Vision 2.2,” it isexplained in detail how the progress of EEOI reduction will be achieved.

SLBP/SLLP-3-

Finance Characteristics

DNV, based on statutory disclosure documents for certain bonds or loan agreements etc.
issued under the Framework, confirmed that trigger events, with corresponding target
observation date(s) and performance requirements will be linked to the achievement of
the target, loan conditions, and other financial incentives.

-

DNV confirmed that MOL has examined an appropriate fallback mechanism, andconsequently MOL concluded that they would not set another SPT or calculation method
at this time since the risk of being uncalculated or unobservable is negligible.

-

MOL has explained that as a future fallback mechanism, MOL may change the KPI andSPT due to both/either external factors and/or MOL’s management decision result, suchas when the changes of MOL's business circumstances, change of business structuresand KPI where reasonable demonstration.

SLBP/SLLP-4-

Reporting

DNV confirmed that required information will be disclosed in a timely manner regarding
the following required by SLBP/SLLP:•KPI performance for the SPT: The information will be disclosed on an annual basison the website (only in the case of bonds) or to lenders (only in the case of loans).
This will be reported annually until bond repayment or loan maturity.

•

SPT achievement status: It will be subject to annual verification by an independent
reviewer and is used to determine financial characteristics (loan conditions or otherfinancial incentives).

•

In case IMO targets change: Discuss the level of ambition of the SPT of MOL withinvestors or lenders and change it if necessary.

SLBP/SLLP-5-

Verification

DNV confirmed that MOL plans to undergo independent validation of KPI-related data at
least once a year by qualified external evaluation agency with relevant expertise in SPT
trigger events.

Page 33 of 65

Ⅶ Assessment Conclusion
On the basis of the information provided by MOL and the work undertaken, it is DNV’s opinion that the
MOL’s Framework meets the disclosure elements and requirements in the eligibility assessment
protocol and that it is aligned with the stated definition and purpose of the CTFH, CTFBG, GBP, GLP,
GBGLs, GLGLs, SLBP, SLBGLs, SLLP, and SLLGLs.
“enable capital-raising and investment for new and existing projects with environmental benefits”“provide an investment opportunity with transparent sustainability credentials””be important (as climate transition) through KPIs and SPTs, quantitative, pre-determined,
ambitious, regularly monitored, and encourage the achievement of ESG (in terms of climatetransition) of the Fundraiser that can be externally validated”

DNV Business Assurance Japan K.K.
22 December 2023

Jun Chokai

Naoki Maeda

Technical Reviewer

Representative Director/SCPADNV Business Assurance Japan K.K.

Senior Vice President
DNV Business Assurance Japan K.K.

Masato Kanedome

Kazumasa Terada

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.

Page 34 of 65

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 35 of 65

Schedule-1 Green/Transition Eligible Projects
MOL’s actions

Main envisaged eligible projects

Eligible project
categories
Green*1

・ Capital investment, research and development,
investment, etc. in LNG/methanol-fuelled vessels

01

Adopt Clean Energy

・ Capital investment, research and development,
investment, etc. related to ships with engines
capable of using fuels that are recognized as zero
emission・ Capital investment etc. in the introduction ofrenewable electricity

02

Further Adopt
Energy-saving
Technologies

Transition*2◯

Impact reporting indicators(example)• Number of LNG/methanol-fuelled
vessels◯◯• Number of zero emission ocean-goingvessels• CO2 emission reduction rate (%)◯◯

compared with heavy oil fuels• Share of renewable energy in electricity(%)

・ Capital investment, research and development,
investment, etc. related to Wind Challengerequipped vessels◯・ Capital investment, research and development,
investment, etc. in the introduction of windpropulsion equipment and technology such as
rotor sails other than Wind Challenger◯◯• Fuel efficiency (megajoules/tonne mile)◯• Absorption and removal system carbon

03

Efficient Operations

・ Capital investment, research and development,
etc. related to energy-saving/environmental
protection technologies and equipment to be
retrofitted to existing vessels

04

Build Business
Models that Enable
Net Zero Emissions

・ Investment etc. in projects to remove and store
CO2 from the atmosphere in relation to negativeemissions initiatives

Page 36 of 65• Number of vessels equipped with Wind
Challenger◯• Number of vessels with rotor sails etc.
• Overview of wind propulsion systems

credit usage (tonnes CO2)

05

Expand Lowcarbon/decarbonizedBusiness by
Leveraging theGroup’s Collective
Strengths

・ Capital investment, research and development,
investment, etc. in building ammonia andhydrogen supply chains◯• Overview of initiatives to build theammonia and hydrogen supply chain

・ Capital investment, research and development,
investment, etc. in offshore wind power-related
projects◯

・ Capital investment, research and development,
investment, etc. in CCS/CCUS projects(◯)◯

・ Capital investment, research and development,
investment, etc. in marine clean energy projects

◯

◯

◯

• Offshore wind power generation
capacity (MW)• Overview of the CCS/CCUS project• Overview of marine clean energy
projects• Electricity generation capacity frommarine clean energy (MW)*1 A typical green eligible project category exemplified by GBP/GBGLs and GLP/GLGLs. In addition to being eligible for inclusion in green finance, projects
that qualify as green projects are permitted within the CTFBG to be included as part of transition finance.
*2 Representative transition projects that are exemplified in the CTFBG as business transformations that meet the transition strategy of the Fundraiser andcontribute to the realization of the Paris Agreement. Projects classified as transition-eligible projects at present may become green projects through theapplication of future technological innovations (e.g., application of green fuels, achievement of performance that meets CO 2 emission standards as agreen project). The development and provision of products and services in new sectors is related to the overall projects listed in Table-1.

Page 37 of 65

Schedule-2 Key Performance Indicators (KPI) and Sustainability Performance Targets (SPT)KPI (Key Performance Indicators)
EEOI：Energy Efficiency Operational Indicator Unit：g-CO2e(GHG)/mile/tonne
MOL has selected the Energy Efficiency Operational Indicator (EEOI) as a KPI. The calculation method is shown in Equation-1. EEOI is an indicator tomeasure the CO2e(GHG) emission performance of ship operations. EEOI is widely used in the shipping industry, and IMO defines the calculation
method. The data required for KPI evaluation is managed and evaluated by MOL's internal process. The IMO guidelines indicate that the use of EEOI
is a recognized approach as a methodology for assessing GHG emissions from the ships.

𝑬𝑬𝑶𝑰 (𝒈𝒓𝒂𝒎 − 𝑪𝑶𝟐𝒆/𝒎𝒊𝒍𝒆/𝒕𝒐𝒏𝒏𝒆) =𝑬𝒎𝒊𝒔𝒔𝒊𝒐𝒏𝒔 (𝒈𝒓𝒂𝒎−𝑪𝑶𝟐𝒆)・・・ Equation-1

𝑫𝒊𝒔𝒕𝒂𝒏𝒄𝒆 𝒔𝒂𝒊𝒍𝒆𝒅(𝒎𝒊𝒍𝒆) 𝒙 𝑪𝒂𝒓𝒈𝒐 𝒄𝒂𝒓𝒓𝒊𝒆𝒅 (𝒕𝒐𝒏𝒏𝒆)

Emission (gram-CO2e): CO2e (GHG) emissions from ships (gram)Distance sailed (mile): Operating distance (miles)
Cargo carried (tonne): Cargo weight (tonne)
The company-wide average is calculated in total in the following way, using a standardized methodology designed to compensate for the impact of thegreater or lesser absolute intensity derived from the business characteristics of each segment on the calculation of the company-wide average, and to ensurethat the efficiency gains achieved by each division are properly reflected in the company-wide average.
Base year: Calculated by dividing the total GHG emissions of all segments by the total tonne-miles of all segments



Target years after the base year: The EEOI reduction rate compared to the base year is calculated for each segment. The contribution rate to the total isthen determined according to the project scale, calculated based on the energy consumption of each segment, and the EEOI reduction rate of eachsegment is then weighted and averaged with that contribution rate.

GHG emissions cover the fuel combustion phase emissions (Scope 1) and part of the fuel production phase emissions (Scope 3/Category 3) on the MOL Group's own
ocean-going vessels.

Page 38 of 65

SPT (Sustainability Performance Targets)
MOL sets annual EEOI reduction rate year-on-year as SPT to achieve 45% EEOI reduction by 2035 relative to a 2019 baseline.
The annual EEOI target reduction rate (SPT) set by MOL is performed trial calculation adjustment that can be compared with the 2030 target and
2050 target (base year: 2008) set by the IMO in the GHG initial reduction.

Page 39 of 65

Schedule-3 Climate Transition Finance eligibility assessment protocol
The checklists below are DNV evaluation protocol created for MOL Sustainable Finance eligibility assessment based on the disclosure requirements of
CTFH2023.
The "Confirmed documents" in the Work Undertaken include public or private documents (the Fundraiser’s internal materials) etc., and are provided by
MOL as evidence of eligibility judgment for DNV.
* Please replace “Issuer”, “Investor” to “Fundraiser”, “Lender” in the context in the following requirements.

Ref.

Criteria

1

Issuer’s Climate
Transition
Strategy andGovernanceRequirements
The green, sustainability orsustainability- linked financing should bedirected toward enabling an issuer’s GHG
emissions reduction strategy inalignment with the goals of the Paris
Agreement.
Recommended information and indicators:•••

a long-term, science-based target
to align with the goals of the Paris
Agreement;
relevant and credible interimscience- based targets in the shortand medium-term on the trajectory
towards the long-term goal, in linewith the relevant regional, sector,
or international climate change
scenarios;
disclosure on an issuer’s transition
plan or climate transition strategy.
This should include specificitemization of the main levers

Work Undertaken

DNV Findings

Confirmed documents- Framework- MOL Group
Environmental Vision 2.2- IMO GHG Strategy,
Roadmap to Zero
Emission fromInternational Shipping of
Ministry of Land,
Infrastructure, Transport
and Tourism etc.
- MOL REPORT 2023

MOL has established the Framework and has introduced
various plans and initiatives to manage and enhance theenvironmental sustainability and related performance ofthe organization in the MOL Group’s broad environmental
strategy. MOL formulated the “MOL Group Environmental
Vision 2.2” in April 2023. In the “MOL Group
Environmental Vision 2.2,” MOL has set five actions as
environmental corporate strategies that are important forthe business model based on identification of risk andopportunity and scenario analysis using TCFD guidance.
In addition, as a measure against climate change, the“MOL Group Environmental Vision 2.2” shows transition
strategy and pathway/trajectory as a medium- to longterm target from 2023 to 2050 and as a pathway to MOLGroup’s Net Zero Emissions. Based on the science-based
evidence quantified by the MOL Group, DNV reviewed
and confirmed that MOL's targets aligns with the goals of
the Paris Agreement.

Interviews with stakeholdersi) The MOL Group has set a long-term target of 2050
Group-wide net zero emissions.

Page 40 of 65

Ref.

Criteria

Requirements

Work Undertaken

towards GHG emissions reduction,such as a detailed capital
expenditure (CapEx) plan andrelevant technological implications(i.e., amounts to be spent, what
carbon cost is considered for
implementing such CapEx program,
operational impacts, regulatory
considerations, etc.);• clear oversight and governance ofan issuer’s climate transition
strategy, including
management/board levelaccountability; and• evidence of a broader sustainability
strategy to mitigate relevant
environmental and social
externalities, including ‘just transition’considerations where appropriate, andcontributions to the UN Sustainable
Development Goals (UN SDGs).

DNV Findingsii) The MOL Group's transition strategy includes
environmental targets set by IMO, the Ministry ofLand, Infrastructure, Transport and Tourism, etc.
Specifically, the short- and medium-term targets
include a 45% reduction in GHG emissions intensityfrom transportation in 2035 (compared to 2019),
and the commencement of net-zero emission oceangoing vessels by the end of the 2020s.
iii) The MOL Group's transition strategy is based on an
analysis of investment plans to solve environmental
issues, factors that cause fluctuations in profit andloss based on scenario analysis, and the impact on
ordinary income. Specifically, the MOL Group plans
to make environmental investments of 650 billion
yen over the three-year period from FY2023 to
FY2025.
(iv) The MOL Group has established systems andmechanisms to promote the initiatives set out in the“MOL Group Environmental Vision 2.2,” including thetransition strategy, at management level.
V) In order to realize medium- and long-term
improvements in corporate value by maximizing
social value, including contributions to the SDGs,
while minimizing negative impacts (negative
external effects) on society through its businessactivities, the MOL Group has identified five“sustainability issues” (materialities) have been
newly identified and it has been clarified which SDG
contributions each relates to.

Page 41 of 65

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
Based on the assessment of the Framework, the “MOL
Group Environmental Vision 2.2,” and the
Implementation Plan, DNV confirmed that they are wellaligned with the MOL Group’s transition strategy. DNV
also confirmed that the Implementation Plan based on
the transition strategy is credible, ambitious, andachievable.

2

Business model
environmental
materiality

The climate transition strategy should be
relevant to the environmentally material
parts of an issuer’s business model,
taking into account potential futurescenarios which may impact current
determinations concerning materiality.
Recommended information and indicators:
Discussion on the materiality of theplanned climate transition strategy may:
be disclosed in the form of amateriality matrix made publicly
available by an issuer or be coveredin an issuer’s annual reports; and• address the materiality of climaterelated eligible projects and/or
KPI(s) on the overall emissions
profile of an issuer.
Where Scope 3 emissions are expected tobe material but are not yet identified or
measured, a timeline for reporting should
be disclosed.
•

Confirmed documents- Framework- MOL Group
Environmental Vision 2.2- IMO GHG Strategy,
Roadmap to Zero
Emission fromInternational Shipping of
Ministry of Land,
Infrastructure, Transport
and Tourism etc.
- MOL REPORT 2023
- MOL sustainability
websiteInterviews with stakeholders

DNV evaluated whether the major activities related to the
MOL Group's business activities correspond to the MOLGroup's transition strategy, which was evaluated ascontributing to the environment.
Of the MOL Group's business activities, CO2 (GHG)
emissions (Scope 1) from ship operations account for
about three quarters of the total. KPI set by the MOL
Sustainable Finance focuses on the CO2 (GHG) reduction
from ship operations utilizing EEOI (see SLLP-1 below),
and helps MOL mitigate the material impacts to theclimate change.
i) The MOL Group's materialities are identified in light ofchanges in the social and business environment,
including climate change and human rights issues,
and with reference to the opinions of external
stakeholders, and the materialities identified and theprocess for their identification are disclosed on the
MOL sustainability website, MOL REPORT 2023, etc.
ii) As mentioned above, ship operations account forthree quarters of GHG emissions from the MOLGroup's business activities, and the eligible projects

Page 42 of 65

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
and the set KPIs approach the reduction of GHG
emissions from this ship operation.
iii) The MOL Group's transition strategy also includes
Scope 3 GHG emission reductions, including the major(assumed to be a large proportion) categories of
Scope 3, which have been calculated and theinformation disclosed.

3

Climatetransition
strategy andtargets to bescience-based

An issuer’s climate transition strategy
should reference science-based targets
and transition pathways. There isscientific guidance around the required
rate of GHG emission reductions (the“GHG emissions reduction trajectory”) toalign the global economy with the goalsof the Paris Agreement.
The planned transition trajectory should:••

be quantitatively measurable
and aligned with the latest
available methodology;
be aligned with, benchmarked, orotherwise referenced torecognized third-party, sciencebased trajectories, where suchtrajectories exist; when thirdparty trajectories are notavailable, consider industry peer
comparison and/or internal
methodologies/historicalperformance;

Confirmed documents- Framework- MOL Group
Environmental Vision 2.2- IMO GHG Strategy,
Roadmap to Zero
Emission fromInternational Shipping of
Ministry of Land,
Infrastructure, Transport
and Tourism etc.
- MOL REPORT 2023

The MOL Group has set a transition plan that is consistent
with the Paris Agreement based on science-based
evidence, and a transition trajectory that is consistent
with the goals of IMO, the Ministry of Land,
Infrastructure, Transport and Tourism, etc.
The plan is a realistic achievement and pathway for GHG
emission reduction in the absolute meaning and is to
reduce GHG emissions to absolute GHG emissions tomaintain defined levels in the future.
i)

The MOL Group's GHG emission reduction targets
under the transition strategy are quantified based on
consistent measurement methodology and areintended to reduce GHG emissions in absoluteterms.

ii)

DNV confirmed that the GHG emission reduction
targets under the MOL Group's transition strategy
are built on milestones, with short-term (annually
until 2030), medium-term (2035) and long-term(2050) targets that exceed those of IMO, theMinistry of Land, Infrastructure, Transport andTourism, etc.

Interviews with stakeholders

Page 43 of 65

Ref.

Criteria

Requirements••

Work Undertakeniii) As mentioned above, annual reduction targets up to2030, including medium-term targets for 2035,
have been published.

be publicly disclosed (ideallyin mainstream financial
filings), including interim
targets; andiv) The MOL Group's GHG emission results, which forms
the basis of its GHG emission reduction targets, hasbeen subject to third-party verification.

be supported byindependent assurance orverification.

ⅴ) The MOL Group's long-term GHG emission reduction
target is 2050 net zero, with short-term (annual
reduction targets to 2030) and medium-term(reduction targets for 2035) targets to achieve thisgoal, consistent with the Paris Agreement.

Strongly recommended information andindicators:
•

•

•

•

•

DNV Findingsvi) The actual GHG emissions in 2019 are used as thebasis for disclosing the results, along with the total
GHG emissions in the past.

short, medium, and long-term
GHG emission reduction targets
aligned with the Paris Agreement;
baseline year and historicemissions (including absoluteemissions, where intensity metrics
are the main indicator);
scenario utilized and methodology
applied (e.g., ACT, SBTi, IEA etc.).
When third-party trajectories are
not available, industry peer
comparison and/or internal
methodologies/historicalperformance;
GHG emission objectives covering
all scopes and most relevant subcategories (Scopes 1, 2 and 3);
targets formulated in either intensity
or absolute terms, noting, that
where intensity targets are used,projections on the change tovii) The MOL Group's transition strategy has beendeveloped based on the risks and opportunities
resulting from analyses based on the IEA's three
scenarios of 2.6°C, 2°C, and 1.5°C.
ⅷ) The MOL Group’s transition strategy includes all
scopes. GHG emissions are also calculated for themain sub-categories for Scope 3.
ⅸ) As mentioned above, the long-term target (2050) is
set in absolute terms, including Scope 3, andemission intensity targets are set to achieve it, while
information on actual results is disclosed in terms of
GHG emissions (in total) as well as the progress inachieving emission intensity targets.
ⅹ) The MOL Group's transition strategy is set up with aview to addressing negative emissions. The final
remaining GHG emissions are assumed to be within
10% of the 2019 baseline, and it is planned to offset

Page 44 of 65

Ref.

Criteria

Requirements

Implementationtransparency

DNV Findings

absolute emissions should also be
provided; andwhere applicable, use of carbon
capture technology as well as of highquality and high-integrity carbon
credits, and their relative contribution
to the GHG emissions reduction
trajectory in line with best industry
practices (e.g., SBTi, VCMI andICVCM).

•

4

Work Undertaken

Market communication regarding theoffer of a GSS financing instrument
intended to fund an issuer’s climatetransition strategy should also betransparent, to the extent practicable, on
the underlying investment program
including capital and operational
expenditures (CapEx and OpEx).
Recommended information and indicators:••

CapEx roll-out plan consistent withthe overall climate transition
strategy and climate science anddiscussion of how it informs CapEx
decision-making within theorganization;

the remaining gross emissions by negative emissions
in the net zero target year (2050).

Confirmed documents- Framework- MOL Group
Environmental Vision 2.2- IMO GHG Strategy,
Roadmap to Zero
Emission fromInternational Shipping of
Ministry of Land,
Infrastructure, Transport
and Tourism etc.
- MOL REPORT 2023

DNV confirmed that the investment and deployment
plans related to the MOL Group's transition strategy
include agreement on future investment andexpenditure.
i)

The MOL Group's transition strategy is based on the
results of scenario analysis, calculation of factorsthat cause fluctuations in profit and loss, specificmeasures and their impact on ordinary income, etc.,
and formulation of investment plans to resolve
environmental issues. Specifically, the company
plans to make investments of 650 billion yen over
the three-year period from FY2023 to FY2025 inorder to solve environmental issues. This represents
more than 50% of the total investment.

ii)

The MOL Group's transition strategy clarifies thepathway to net zero emissions, including plans forthe adoption of alternative fuels and the phasing outof highly carbon intensive heavy oil fuels.

Interviews with stakeholders

phase-out plan regarding
activities/products incompatible
with the climate transition strategy(when such activities or products
are significantly harmful or display

Page 45 of 65

Ref.

Criteria

Requirements

Work Undertaken

levels of performance inconsistent
with science-based GHG emission
reduction trajectories);• green CapEx, for example thosereferenced under the eligible green
project categories in the Green
Bond Principles, as a percentage of
total CapEx and how the ratio may
be expected to evolve over time;• disclosure on the percentage ofassets/revenues/
expenditures/divestments aligned
to the various levers;• a qualitative and/or quantitative
assessment of the potential lockedin GHG emission from an issuer’s
key assets and products;• assumptions on the internal costof carbon; and• disclosure on adverse impacts on theworkforce, community andsurrounding environment, and related
strategies used to mitigate thosenegative impacts.

DNV Findingsiii) The share of Green Capex in the overall Capex andhow this share changes over time are clarified in theEnvironmental Vision 2.2 and the Pathway to Net
Zero Emissions in the Framework, as well as in the
KPIs & Milestones.
iv) As mentioned above, based on the results of the
scenario analysis, factors that cause fluctuations in
profit and loss, specific measures taken and theirimpact on recurring profit are calculated andreflected in the transition strategy, and thisinformation is disclosed.
v)

As mentioned above, GHG emissions from the MOLGroup's business activities are attributable to ship
operations, which account for three quarters of GHG
emissions, and GHG emissions from ship operations
are calculated for all Scopes.

vi) The MOL Group started internal operation of Internal
Carbon Pricing (ICP) in 2021 and uses this ICP forinvestment decisions. This ICP is also disclosed on
the MOL Group website.
vii) In the Framework, the negative environmental andsocial impacts of eligible projects and how they are
addressed are identified and disclosed.

Page 46 of 65

Schedule-4 Green Finance Eligibility Assessment Protocol
The checklist below (GBP/GLP-1 to GBP/GLP-4) is a DNV assessment protocol created for the MOL Green/Transition Finance Eligibility Assessment based on therequirements of GBP/GBGLs and GLP/GLGLs. The "Confirmed documents" in the Work Undertaken include documents inside the Fundraiser and are provided by
MOL as evidence of eligibility judgment for DNV.
In Schedule-3, it is referred to as GBP/GLP according to the practice, but this is the standard to be referred to in the case of financing that specifies the use ofproceeds such as green and transition projects in transition finance that specifies the use of proceeds based on CTFH and CTFBG, including both green andtransition contexts.

* Please replace “Issuer”, “Investor” to “Fundraiser”, “Lender” in the context in the following requirements.

GBP/GLP-1 Use of Proceeds
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1aTypes of funds

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

Confirmed documents- Framework

Through the evaluation work, DNV confirmed that MOL
Sustainable Finance falls into the following categories.

Interviews withstakeholders· (Standard) Green/transition FinanceThe key to a green/transition finance 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

DNV confirmed that the MOL Sustainable Finance isintended to fund green/transition projects focused on
MOL's GHG emission reduction targets, as outlined in the
Framework and Schedule-1.

All green projects to which the funds areused should have clear environmental
benefits, the effects of which should be

Confirmed documents- Framework

1b

1c

Green/transition
Project
Classification

Environmental
benefits

Interviews withstakeholders

Page 47 of 65

DNV confirmed that the green projects for which theproceeds will be used are focused on the MOL Group's GHG
emissions reduction targets, as set out in Schedule₋1, and

Ref.

1d

Criteria

Refinancing rate

Requirements

Work Undertaken

DNV Findings

assessed by the issuer and, where possible,
quantitatively demonstrated.

Interviews withstakeholders

that their effects will be disclosed in quantitative or
qualitative information directly or indirectly related to GHG
emissions.

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

DNV confirmed that MOL plans to use all proceeds for
either new investment or refinancing of eligible candidate
projects included in Schedule₋1.

Interviews withstakeholders

Page 48 of 65

The eligible projects and whether they are new allocations
or refinancing are determined before the implementation offinance.

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

Criteria

Requirements

Work Undertaken

DNV Findings

2aProject
selection
process

Green finance fundraisers should provide an
overview of the process of qualifying projects forwhich green finance funding will be used. This
includes (but is not limited to):Confirmed documents

DNV confirmed that MOL has a process fordetermining the eligibility of projects to use theproceeds from sustainable finance, which is clearly
outlined in the Framework.

・ The process by which the issuer determinesthat the project in question is included in thebusiness category of a qualified green project.

- Framework
Interviews with stakeholders

・ Creation of criteria for eligibility of projects forwhich green finance funding will be used
・ Environmental sustainability goals
2bIssuer's
Environment
al and Social
Governance
Framework

In addition to criteria and certifications, theinformation published by issuers regarding thegreen finance process also considers the qualityof performance of the issuer's framework andenvironmental sustainability.

Confirmed documents- Framework
Interviews with stakeholders

DNV confirmed that the eligible projects
implemented by MOL are in line with the MOLGroup's management and environmental policies andconsistent with the transition strategy, targets, andpathways.
DNV confirmed that MOL will identify possible
negative environmental and social impacts in theoperation and implementation of the project, andthat it will seek to control negative impacts byconducting sea area surveys and environmental
assessments.

Page 49 of 65

GBP/GLP-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 finance 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- Internal system output
forms

The net proceeds relating to proceeds from the MOL
Sustainable Finance can be tracked on a project-byproject basis through an internal system.

During the green finance 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

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

Interviews with stakeholders

Interviews with stakeholders

Interviews with stakeholders

Page 50 of 65

DNV confirmed that the system actually in use and its
output forms can be verified and that the managementof proceeds can be proven on this basis.
DNV confirmed that the proceeds from sustainablefinance are managed by the Finance Division, whichshares the allocation status to eligible projects with therelevant divisions.

DNV confirmed that the proceeds from the MOL
Sustainable Finance are promptly allocated to eligible
projects and, where unallocated proceeds arise, theunallocated balance is managed in cash or cash
equivalents and disclosed through allocation status
reporting.

GBP/GLP-4 Reporting
Ref.

Criteria

4aPeriodical
Reporting

Requirements

Work Undertaken

DNV Findings

In addition to reporting on the use ofproceeds and the temporary investmentof unallocated proceeds, the issuer willconsider each project at least once a
year for projects to which the green
finance proceeds have been allocated,taking into account the following: A listof each project should be provided.
- Confidentiality and competitive
considerations- Outline of each project, expectedsustainable environmental and social
effects

Confirmed documents- Framework

DNV confirmed that MOL will disclose the allocation status of proceedsfrom sustainable finance and the environmental benefits as set out
below annually on its website (only in the case of bonds) or to lenders(only in the case of loans), within the limit of confidentiality obligations
and as far as reasonably practicable, until the full amount of theproceeds from sustainable finance is allocated to eligible projects.

Interviews with stakeholders

Page 51 of 65

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

Table - Impact reporting indicators
MOL’s actions

Main envisaged eligible projects
・ Capital investment, research and development, investment,
etc. in LNG/methanol-fuelled vessels・ Capital investment, research and development, investment,
etc. related to ships with engines capable of using fuels thatare recognized as zero emission
・ Capital investment etc. in the introduction of renewableelectricity
・ Capital investment, research and development, investment,
etc. related to Wind Challenger-equipped vessels・ Capital investment, research and development, investment,
etc. in the introduction of wind propulsion equipment andtechnology such as rotor sails other than Wind Challenger
・ Capital investment, research and development, etc. related
to energy-saving/environmental protection technologies andequipment to be retrofitted to existing vessels

Environmental benefits (impact reporting
indicators)
・ Number of LNG/methanol-fuelled vessels
・ Number of zero emission ocean-going vessels
・ CO2 emission reduction rate (%) compared withheavy oil fuels
・ Share of renewable energy in electricity (%)

01

Adopt Clean Energy

02

Further Adopt
Energy-saving
Technologies

03

Efficient Operations

04

Build Business
Models that Enable
Net Zero Emissions

・ Investment etc. in projects to remove and store CO2 fromthe atmosphere in relation to negative emissions initiatives

・ Absorption and removal system carbon credit
usage (tonnes CO2)

05

Expand Lowcarbon/decarbonizedBusiness by
Leveraging theGroup’s Collective
Strengths

・ Capital investment, research and development, investment,
etc. in building ammonia and hydrogen supply chains
・ Capital investment, research and development, investment,
etc. in offshore wind power-related projects
・ Capital investment, research and development, investment,
etc. in CCS/CCUS projects
・ Capital investment, research and development, investment,
etc. in marine clean energy projects

・ Overview of initiatives to build the ammonia andhydrogen supply chain
・ Offshore wind power generation capacity (MW)・ Overview of the CCS/CCUS project・ Overview of marine clean energy projects
・ Electricity generation capacity from marine clean
energy (MW)Page 52 of 65

・ Number of vessels equipped with Wind Challenger
・ Number of vessels with rotor sails etc.
・ Overview of wind propulsion systems

・ Fuel efficiency (megajoules/tonne mile)Schedule-5 Sustainability Linked Finance Eligibility Assessment Protocol
Since the MOL Sustainable Finance is implemented as finance with general corporate purpose, the five elements of SLLP required for the eligibility assessment offinance with specific use of proceeds as defined in the CTFH and CTFBG are applied to the assessment.
The checklist below (SLBP/SLLP-1 to SLBP/SLLP-5) is a DNV assessment protocol created for the MOL Sustainable Finance Eligibility Assessment based on therequirements of SLBP/SLLP. The "Confirmed documents" in the Work Undertaken include public or private documents (the Fundraiser’s internal materials)

etc., and are provided by MOL as evidence of eligibility judgment for DNV.
* Please replace “Borrower”, “Lender” to “Fundraiser”, “Investor” in the context in the following requirements.

SLBP/SLLP-1 Selection of Key Performance Indicators (KPIs)
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1a

KPI – material
to coresustainability
and businessstrategy

The borrower’s sustainability
performance is measured using
sustainability KPIs that can be external orinternal. The KPIs should be material tothe borrower’s core sustainability andbusiness strategy and address relevant
environmental, social and/or governancechallenges of the industry sector and be
under management’s control. The KPIshould be of high strategic significance tothe borrower’s current and/ or future
operations;

Confirmed documents:- Framework- MOL Group
Environmental Vision
2.2- MOL REPORT 2023
- IMO EEOI Guideline/12/MEPC.1/Circ.684- MOL EEOI estimatedresults

DNV has reviewed MOL’s sustainability KPI and confirmed thatthe chosen KPI is material and relevant to the company’s coresustainability and business strategies.

It is recommended that borrowers
communicate clearly to investors therationale and process according to which
the KPI(s) have been selected and how
the KPI(s) fit into their sustainability

Interviews withstakeholders

Core to MOL’s business strategy is to play the role of social
infrastructure, which is indispensable for maintaining people’s
activities through marine transportation services. Core to
MOL’s sustainability strategy is identified as five sustainability
issues (materiality).
• Provision of additional values through safe transportationand social infrastructure businesses• Marine and global environmental conservation• Human activity and development of local society• Innovation for development in marine technology• Governance and compliance to support businesses

Page 53 of 65

Ref.

Criteria

Requirements

Work Undertaken

strategy.

DNV Findings
Among these, the material KPI for the MOL Sustainable
Finance is GHG emission reduction centered on the marine andglobal environmental conservation. This is explained as three
medium-to long-term targets and five actions in the “MOL
Group Environmental Vision 2.2,” being focused on emission
reduction from the company and society towards net zero
emissions in 2050.
This is clearly communicated in the Framework associatedwith MOL's sustainability strategy.
The chosen KPI is as follows:• Energy Efficiency Operational Indicator (EEOI)
Unit: g-CO2e(GHG)/mile/tonne

EEOI selected as the KPI is an indicator to measure the
GHG emission performance of ship operations and is widelyused in the shipping industry, of which calculation
methodology is defined by IMO.
The IMO guidelines indicate that the use of EEOI is arecognized approach as a methodology for assessing GHG
emissions from the ships. EEOI is calculated based on thefollowing indicators and formula.

𝑬𝑬𝑶𝑰 (𝒈𝒓𝒂𝒎 − 𝑪𝑶𝟐𝒆/𝒎𝒊𝒍𝒆/𝒕𝒐𝒏𝒏𝒆)
𝑬𝒎𝒊𝒔𝒔𝒊𝒐𝒏𝒔 (𝒈𝒓𝒂𝒎 − 𝑪𝑶𝟐𝒆)=
𝑫𝒊𝒔𝒕𝒂𝒏𝒄𝒆 𝒔𝒂𝒊𝒍𝒆𝒅(𝒎𝒊𝒍𝒆) 𝒙 𝑪𝒂𝒓𝒈𝒐 𝒄𝒂𝒓𝒓𝒊𝒆𝒅 (𝒕𝒐𝒏𝒏𝒆)
Emission (gram-CO2e): CO2e (GHG) emissions from ships (gram)Distance sailed (mile): Operating distance (miles)
Cargo carried (tonne): Cargo weight (tonne)

Page 54 of 65

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

The company-wide average is calculated in total in thefollowing way, using a standardized methodology designed tocompensate for the impact of the greater or lesser absoluteintensity derived from the business characteristics of eachsegment on the calculation of the company-wide average, andto ensure that the efficiency gains achieved by each division
are properly reflected in the company-wide average.
•

Base year: Calculated by dividing the total GHG emissionsof all segments by the total tonne-miles of all segments•

Target years after the base year: The EEOI reduction ratecompared to the base year is calculated for eachsegment. The contribution rate to the total is thendetermined according to the project scale, calculated
based on the energy consumption of each segment, andthe EEOI reduction rate of each segment is then weighted
and averaged with that contribution rate.

GHG emissions cover the fuel combustion phase emissions(Scope 1) and part of the fuel production phase emissions(Scope 3/Category 3) on the MOL Group's own ocean-goingvessels.
The KPI is therefore of high strategic relevance for MOL now
and for the foreseeable future to measure relative carbon
intensity reduction of its shipping operations. All elements
which make up the EEOI are under MOL’s management
control. The KPI is material, as GHG emission intensity impacts
MOL’s own value creation as well as external stakeholders.
The scope of EEOI is also a key element, reaching beyond
Scope 1 and including part of Scope 3 emissions.

Page 55 of 65

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
DNV believes that the focus on deploying one KPI will enable atargeted effort to deliver on MOL’s overarching
decarbonization targets. The chosen KPI for GHG emission
reduction aligns with MOL’s broader low carbonization anddecarbonization aims and is measurable, transparent, andrecognizable as an annual assessment.
In terms of MOL’s broader business strategy, DNV
acknowledges that reducing EEOI will be a key driver of MOL’s
core business (maritime business). Therefore, the EEOI as a
KPI will also contribute to both the environmental
sustainability targets and MOL’s business strategy.

1b

KPI Measurability

KPIs should be measurable orquantifiable on a consistentmethodological basis; externallyverifiable; and able to be benchmarked,
i.e. as much as possible using an externalreference or definitions to facilitate theassessment of the SPT’s level ofambition.
borrowers are encouraged, whenpossible, to select KPI(s) that they havealready included in their previous annual
reports, sustainability reports or othernon-financial reporting disclosures toallow investors to evaluate historicalperformance of the KPIs selected. In
situations where the KPIs have not beenpreviously disclosed, borrowers should,
to the extent possible, provide historical

Confirmed documents:- Framework
MOL Group
Environmental Vision
2.2- MOL REPORT 2023
- IMO GHG Strategy,
Roadmap to Zero
Emission fromInternational Shippingof Ministry of Land,
Infrastructure,
Transport andTourism etc.
- IMO EEOI Guideline
MEPC.1/Circ.684- MOL EEOI estimatedresults

Page 56 of 65

DNV concludes that the EEOI as a KPI is measurable based ona consistent methodology, externally verifiable, and able to bebenchmarked to external references. DNV concludes that EEOI
is a robust and reliable indicator to measure GHG emission
reduction from ships. The EEOI as a KPI is already an industry
standard for reporting on GHG emissions in the shipping
industry. Since the EEOI figures will be registered in the MOL’s
data collection system on fuel consumption, it will be collectedbased on a consistent methodology, be externally verified, andbe benchmarked to external references.
The IMO GHG Strategy, adopted in 2018 and revised in 2023,
can be used as external reference to benchmark MOL’s level ofambition. IMO has set GHG reduction targets for 2030 and
2040, with 2008 as the base year, to achieve zero GHG
emissions in 2050. IMO's reduction target for 2030 calls for a
40% reduction in CO2 emissions per transport volume and a 510% use of zero emission fuels etc. The Ministry of Land,
Infrastructure, Transport and Tourism's “Roadmap to Zero
Emissions from International Shipping” (sponsored by theRef.

Criteria

Requirements
externally verified KPI values covering atleast the previous 3 years.

Work Undertaken
Interviews withstakeholders

DNV Findings
Japan Ship Technology Research Association), which has
referenced to IMO, sets goals that are consistent with IMO.
MOL’s targets and the targets of IMO, the Ministry of Land,
Infrastructure, Transport and Tourism, etc. have different baseyears. However, DNV confirmed that MOL has standardized todirectly compare the two based on past performance data,
public information, etc., and that the KPI was properly set as
an indicator that can be directly compared with the targets of
IMO, the Ministry of Land, Infrastructure, Transport andTourism, etc.

1c

KPI – Clear
definition

A clear definition of the KPI(s) should be
provided and include the applicable scopeor perimeter as well as the calculation
methodology

Confirmed documents:- Framework- MOL Group
Environmental Vision
2.2- MOL REPORT 2023
- IMO EEOI Guideline/12/MEPC.1/Circ.684- MOL EEOI estimatedresults
Interviews withstakeholders

Page 57 of 65

DNV confirmed that the KPI (EEOI) chosen by MOL provides aclear evaluation scope and calculation methodology. The EEOI
is calculated based on the data of emission (gram-CO2e),
CO2e(GHG) emissions from ships (grams), distance sailed(mile), and cargo carried (tonne).
This is evaluated and reported for ships that have been set andmanaged in advance. EEOI is already an industry standard andwidely reported on, as outlined in 1b.

SLBP/SLLP-2 Calibration of Sustainability Performance Targets (SPTs)
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

2aTargetSetting Meaningful

The SPTs should be ambitious, realistic andmeaningful to the borrower’s business andbe consistent with the issuers’ overall
strategic sustainability/ESG strategy

Confirmed documents:- Framework- MOL Group
Environmental
Vision 2.2- MOL REPORT 2023
- MOL materials
Overview ofsustainability issues(materiality)- IMO GHG Strategy,
Roadmap to Zero
Emission fromInternational
Shipping of Ministryof Land,
Infrastructure,
Transport andTourism etc.

DNV confirmed that SPT supports the three medium-to longterm targets and five actions set forth in the “MOL Group
Environmental Vision 2.2,” has goals that are aligned withthe goals of IMO, the Ministry of Land, Infrastructure,
Transport and Tourism, etc., and has specific plans inherent.
DNV therefore confirmed that the SPT is ambitious, realistic
and meaningful. DNV also confirmed that the achievementof SPT is in line with MOL’s overall sustainability/ESG
strategy.

Interviews withstakeholders

Page 58 of 65

Achievement of SPT is a necessary response to GHG emission
reduction, which is closely related to the environmental issuesof the shipping industry, and is meaningful for MOL’s Business.
The MOL Group’s three medium-to long-term targets and fiveactions set out in the “MOL Group Environmental Vision 2.2” will
work toward net zero emissions by 2050, and SPT will be
provided as an annual target until 2035 to measure progress.

Based on MOL's fleet configuration transition plan provided
to DNV, DNV concludes that SPT is realistic, the plan is
feasible, and it is likely to achieve the SPT objectives
outlined in the Framework. It was confirmed that the 45%
reduction in EEOI by 2035 compared to the 2019 baseline
set by MOL, when converted to the baseline of IMO, theMinistry of Land, Infrastructure, Transport and Tourism,
etc., is an ambitious target aligned with the targets of IMO,
the Ministry of Land, Infrastructure, Transport and Tourism,
etc. for the entire period from 2019 to 2035 and goesbeyond “Business as Usual.” This target setting is expectedRef.

Criteria

Requirements

Work Undertaken

DNV Findings

to be a driving force for MOL's efforts to implement its
sustainability strategy.
2b

TargetSetting Meaningful

SPTs should represent a material
improvement in the respective KPIs and be
beyond a “Business as Usual” trajectory;
where possible be compared to abenchmark or an external reference and be
determined on a predefined timeline, set
before (or concurrently with) the issuanceof the loan.

Confirmed documents:- Framework- “MOL Group
Environmental
Vision 2.1”-

GHG emission
reduction strategy of
IMO, Roadmap to
Zero Emission fromInternational
Shipping of Ministryof Land,
Infrastructure,
Transport andTourism of Japan,etc.
- MOL EEOI EstimatedResults
Interviews withstakeholders
2cTargetSetting –benchmarks

The target setting exercise should bebased on a combination of benchmarking
approaches:

Confirmed documents:- Framework- MOL Group
Environmental
Vision 2.2

Page 59 of 65

DNV confirmed that the chosen SPTs represent a material
improvement of the KPI. This corresponds to a 43% reduction
in 2030 vs. 2008 baseline. In order to achieve the SPT, an
overall 43% reduction goes beyond “Business as Usual,” as MOL
will not achieve the targets without the deployment of newtechnology introduction and construction such as theintroduction of net zero emission ocean-going vessels, theintroduction of about 90 LNG fuelled vessels, and theintroduction of biodiesel fuel. Comparing MOL’s SPT for 2030 tothe external reference from IMO described under 1b, DNV
concludes that MOL’s target of 43% reduction vs. its own 2008
baseline is more ambitious than the envisaged -40% vs. targetsof IMO, the Ministry of Land, Infrastructure, Transport andTourism, etc. The annual SPT for 2023 to 2035 are directreflection of the projected EEOI under MOL’s fleet configuration
plan and operation efficiency, meaning that only a full
implementation of the fleet configuration plan is expected toresult in meeting the annual SPTs.

DNV confirmed that the SPT target setting exercise has been
based on an appropriate combination of benchmarking
approaches.
1. DNV confirmed that the Framework provides guidance forRef.

Criteria

Requirements
1. The borrower’s own performanceover time for which a minimum of 3
years, where feasible, of
measurement track record on theselected KPI(s) is recommended andwhen possible forward-looking
guidance on the KPIWork Undertaken-

Roadmap to Zero
Emission fromInternational
Shipping of Ministryof Land,

2. The SPTs relative positioning versus
the borrower’s peers wherecomparable or available, or versus
industry or sector standards
3. Systematic reference to sciencebased scenarios, or absolute levels(e.g. carbon budgets) or official
country/regional/internationaltargets or to recognised BestAvailable-Technologies or otherproxies

IMO GHG Strategy,

Infrastructure,
Transport and-Tourism etc.
MOL EEOI estimatedresults

Interviews withstakeholders

DNV Findings
target setting from 2023 to 2035 by the KPI information,
which is based on the appropriate data and actual results, formore than three years from 2008 to 2022.
2. DNV concludes that the outlined SPT goes beyond that of theindustrial standard (target of IMO, the Ministry of Land,
Infrastructure, Transport and Tourism, etc.) and SPT set by
SBTi methodology. highlighted in 2b.
3. DNV concludes that the SPT is put in an appropriate context
of international climate change mitigation efforts. The
Framework highlights MOL’s ambition to “work on achieving
the goals of the Paris Agreement.” The SPT can be seen as
aiming to outperform IMO’s GHG emission reduction targets.
The broader purpose adopted by MOL is supported by the “MOL
Group Environmental Vision 2.2” with the following three
medium- to long-term targets and five actions. This includes
national goals, Best Available Technology, or other closetechnologies.
“Medium- to long-term targets”
1.
2.
3.

Deploy net zero emissions ocean-going vessels in
the 2020s
Reduce GHG emissions intensity by approximately
45% by 2035 (versus 2019*)
With the concerted effort throughout the Group,achieve net zero GHG emissions by 2050

“Five actions to achieve the targets”

Page 60 of 65

1.

Adopt Clean Energy

2.

Further Adopt Energy-saving Technologies

3.

Efficient Operations

4.

Build Business Models that Enable Net Zero

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
Emissions5.

2dTargetsetting –disclosures

Disclosures on target setting should makeclear reference to:
1.

The timelines of target achievement,
the trigger event(s), and thefrequency of SPTs

2.

Where relevant, the verified baseline
or reference point selected for
improvement of KPIs as well as therationale for that baseline orreference point to be used

3.

4.

Confirmed documents:- Framework- MOL Group
Environmental
Vision 2.2-

1.

Roadmap to Zero
Emission from
Shipping of Ministry

Where relevant, in what situations
recalculations or pro-forma
adjustments of baselines will takeplace
Where possible and taking into
account competition andconfidentiality considerations, how
the borrowers intend to reach such
SPTs

DNV confirmed that the SPT target setting is properly disclosed.

IMO GHG Strategy,

International

2.

of Land,
Infrastructure,
Transport and-Tourism etc.
MOL EEOI estimatedresults

Interviews withstakeholders

Expand Low-carbon/decarbonized Business by
Leveraging the Group’s Collective Strengths

3.
4.

The timelines of SPT target achievement are clearly
disclosed, at an annual frequency leading up to 2035.
MOL has set the corresponding target observation dates
for specified trigger events for each fiscal year for the
MOL Sustainable Finance issued under the Framework,
and it is necessary to provide the lender with the timely
SPT achievement status. DNV confirmed that the annual
SPT is set over the entire maturity date of the loan.
The baseline for SPT is 2019. This is different from thebaseline (2008) of IMO, the Ministry of Land,
Infrastructure, Transport and Tourism, etc., but isstandardized by MOL’s appropriate trial calculation
adjustment (intercomparison is possible).
Same as 2.
The Framework provides sufficient information on how
EEOI reduction progress will be achieved, highlighting
how progress to date has been achieved and the likely
measures implemented to meet the EEOI trajectory
outlined leading up to 2035. These are explained in detailin the “MOL Group Environmental Vision 2.2.”

Based on MOL’s fleet configuration transition plan, DNV
concluded that the SPTs are realistic and that the plan is viableand possible to meeting the SPT targets outlined in the
Framework.

Page 61 of 65

Page 62 of 65

SLBP/SLLP-3 Finance Characteristics
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

3a

Loan
Characteristics – SPT
Financial/st
ructural
impactThe SLL will need to include a financial
and/or structural impact involving trigger
event(s) based on whether the KPI(s)reach the predefined SPT(s).

Confirmed documents:- Framework

DNV confirmed that the inclusion of trigger event(s) under the
Framework is in line with the requirements outlined by SLLP.

Loan
Characteristics –
Fallback
mechanism

Any fallback mechanisms in case the SPTs
cannot be calculated or observed in asatisfactory manner should be explained.

Confirmed documents:- Framework

3bborrowers may also consider including,where needed, language in the loan
documentation to take into consideration
potential exceptional events.

Interviews withstakeholders

Interviews withstakeholders

Page 63 of 65

DNV confirmed that trigger events, with corresponding target
observation date(s) and performance requirements under
specific SPTs, as outlined in each specific loan issued under the
Framework, will be linked to the achievement of the target, loan
conditions, and other financial incentives.
DNV confirmed that MOL has examined an appropriate fallback
mechanism, and consequently MOL concluded that they would
not set another SPT or calculation method at this time since therisk of being uncalculated or unobservable is negligible.
MOL explained that as a future fallback mechanism, MOL may
change the KPI and SPT due to both/either external factors
and/or MOL’s management decision result, such as when thechanges of MOL's business circumstances, change of businessstructures and KPI where reasonable demonstration.

SLBP/SLLP-4 Reporting
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

4aReportingborrowers of SLLs should publish, andkeep readily available and easily
accessible:

Confirmed documents:- Framework

DNV concludes that the following information, as required by
SLLP, will be published in a timely manner and kept publicly
available:

1. Up-to-date information on theperformance of the selected KPI(s),including baselines where relevantInterviews withstakeholders

2. A verification assurance report
relative to the SPT outlining theperformance against the SPTs andthe related impact, and timing ofsuch impact, on the loan’s financial
and/or structural characteristics

1.

2.

3.

3. Any information enabling investors
to monitor the level of ambition of
the SPTs
This reporting should be publishedregularly, at least annually, and in any
case for any date/period relevant forassessing the SPT performance leading toa potential adjustment of the SLL’s
financial and/or structural characteristics.

Page 64 of 65

KPI performance for the SPT: The achievement status
of KPI towards SPT will be disclosed annually on thewebsite (only in the case of bonds) or to lenders (onlyin the case of loans).
SPT achievement status: It will be subject to annual
verification by an independent reviewer and is used todetermine financial characteristics (loan conditions orother financial incentives).
In case IMO targets change: Discuss the level ofambition of the SPT of MOL with investors or lenders
and change it if necessary.

SLBP/SLLP-5 Verification
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

5aExternal
VerificationBorrowers should have its performanceagainst each SPT for each KPI
independently verified by a qualified
external reviewer with relevant expertise,at least once a year and for each SPT
trigger event.

Confirmed documents:- Framework

DNV confirmed that MOL plans to undergo independent validation
of KPI-related data at least once a year by qualified external
evaluation body with relevant expertise in SPT trigger events.

Interviews withstakeholders

Page 65 of 65