1. Purpose and Background of Green Finance Framework Development
Invincible Investment Corporation ("INV") making focused investments in hotels andresidential properties as Core Assets, shall manage its assets in an aim to guarantee soundgrowth of its assets and secure stable profits over the medium and long term.
INV and Consonant Investment Management Corporation ("CIM"), the asset manager of INV,
recognize the importance of environmental, social, and governance (ESG) considerations inreal estate investment management from the viewpoint of sustainability such as economicand social development and contributing to global environmental conservation, and regard
the improvement of sustainability as an important management issue.
INV and CIM believe that incorporating ESG factors into the overall business in the real estate
investment management business, which is their main business, is essential for maximizing
unitholder value over the medium to long term and will contribute to maximizing INV'sinvestment returns.
As a part of this effort, INV has established the Green Finance Framework (the "Framework")
to procure funds necessary to realize a sustainable environment and society through GreenBonds and Green Loans.
With respect to the eligibility of the Framework, INV has obtained "Green1 (F)" rating, thehighest rating in the "JCR Green Finance Framework Evaluation", from Japan Credit Rating
Agency, Ltd.
1.1 Sustainability Policy
INV and CIM have established the following basic policies for sustainability and will put theminto practice in our daily operations.
1.

Promotion of Energy Conservation and Reduction of Greenhouse Gas
INV and CIM make efforts to reduce energy consumption and greenhouse gas
emission by introducing energy-efficient equipment and promoting energy-saving
measures in operations. INV and CIM also contribute to building a carbon-free society
and mitigating climate change by considering opportunities to utilize renewable energy.

2.

Adaptation to Climate Change
INV and CIM have strengthened the disaster and environmental resilience ofinvestment properties to respond to the direct physical risks caused by disasters due
to climate change and the transition risks associated with tightening regulations andsocial changes. INV and CIM curb these risks and aim to create business opportunities
that adapt to climate change.

13.

Water Consumption Efficiency
INV and CIM strive to reduce water consumption by introducing water-efficientequipment and promoting water-saving measures in operations. INV and CIM also
consider expanding the reuse of water in their facilities.

4.

Effective Utilization of Resources and Reduction of Waste
INV and CIM work on reducing waste in our operations and encourage stakeholders
to cooperate and sort waste, with the aim of contributing to the realization of a resourcesaving and recycling-oriented society.

5.

Improvement of Health, Safety and Comfort
INV and CIM strive to ensure the health and safety of tenants and visitors by thoroughly
cleaning and sanitizing our properties and conducting appropriate air conditioning. In
addition, by improving the comfort provided by INV's properties, INV and CIM aim toimprove tenant satisfaction, retain and attract prime tenants, and increase real estatevalue.

6.

Collaboration with Tenants, Supply Chains and Local Communities
INV and CIM recognize tenants, supply chains such as PM/BM and local communities
as major stakeholders and strive to realize sustainability in real estate management bybuilding good relationships with such stakeholders and acting proactively to collaboratewith them.

7.

Initiatives for Employees
INV and CIM strive to employ and evaluate employees in a fair manner, respecting
human rights and diversity. In addition, INV and CIM provide a workplace environmentthat gives consideration to the health, safety, and comfort of employees, and in orderto improve them, INV and CIM develop a work system that gives consideration towelfare and work-life balance. Furthermore, in addition to providing opportunities forskill development, such as specialized training and support for obtaining qualifications,
INV and CIM make efforts to raise employee awareness of sustainability and conduct
education and awareness-raising activities.

8.

Compliance
INV and CIM not only comply with laws and regulations, but also strive to prevent
corruption and conflicts of interest, properly manage information, and prohibit improper
conduct. INV and CIM establish an appropriate organizational structure to properly
manage and prevent these risks.

9.

Ensuring of Transparency
INV and CIM fulfill our accountability for stakeholders by actively disclosing ESG
related information. INV and CIM also consider the use of external evaluations and2third-party certification to visualize the results of our environmental and social initiatives.
1.2 Promotion Structure of Sustainability
CIM has established the "Sustainability Committee" to implement the "Sustainability Policy".
The Sustainability Committee consists of (i) the President and CEO, who is the final decisionmaker, (ii) the General Manager of the Asset Management Department and the General
Manager of the Planning Department, who are responsible for executing sustainability
initiatives, and (iii) officers and employees involved in promoting sustainability. TheCommittee meeting is held at least four times a year. The committee deliberates and decides
on specific sustainability goals and measures, and such decisions and the status of progress
will be reported to INV's Board of Directors. The same information will be shared with allofficers and employees of CIM as well.
CIM will conduct sustainability-focused training for all officers and employees, including
temporary staff, at least once a year. The purpose of this training is to help officers andemployees acquire knowledge and raise awareness of sustainability considerations in linewith business practices, such as trends of market and regulations related to ESG investment
and environmental real estate.
1.3

Support for the TCFD Recommendations

In February 2023, CIM has expressed its support for the TCFD recommendations in order toofficially announce its support for the international goals set forth in the Paris Agreement andits willingness to continue to promote efforts to reduce greenhouse gas emissions in order tocontribute to climate change mitigation.
CIM also participates in the TCFD Consortium, an organization of supporting companies inJapan. Through communication with supporting companies, CIM will deepen its knowledge
on effective information disclosure and utilization of information, etc., and apply thisknowledge to our efforts to address climate change-related issues.

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Overview of the Green Finance Framework

INV has formulated the Framework in accordance with the “Green Bond Principles 2021”
established by the International Capital Markets Association (ICMA), “Green Bond Guidelines2022” established by the Ministry of the Environment of Japan, “Green Loan Principles 2023”
established by the Loan Market Association (LMA), the Asia-Pacific Loan Market Association(APLMA), and the Loan Syndications and Trading Association (LSTA), as well as “GreenLoan and Sustainability Linked Loan Guidelines 2022” established by the Ministry of theEnvironment of Japan, and it consists of the following four elements.
1.

The Funds Procured through the Green Finance2.

Project Evaluation and Selection Process

3.

Management of Proceeds

4.

Reporting

2.1 The Funds Procured through the Green Finance
INV will appropriate all the funds procured through the Green Bonds or Green Loans for theacquisition or renovation of green buildings that meet eligibility criteria, or for the refinance of
those funds used for the acquisition or renovation of green buildings. The eligibility criteria
are as follows:<Eligibility Criteria>
Eligibility Criteria-1: Green Building
Properties that have or will have one of the following third-party certifications in effect as ofthe date of payment of the Green Bond or as of the date of the Green Loan.
(i)

BELS Certification:- BELS Certification (2016 fiscal year standards): five stars, four stars, or threestars *excludes BEI = over 0.75 for logistic facilities- BELS Certification (2024 fiscal year standards):
・ non-residential buildings: level 6, level 5, or level 4・ residential buildings with renewable energy facilities: level 6, level 5, level 4,or level 3・ residential buildings without renewable energy facilities: level 4 or level 3(ii)

CASBEE Certification:- CASBEE Certification for Buildings and Certification for CASBEE for Real Estate:rank S, A, or B+- Municipal version of CASBEE: rank S, A, or B+ * limited to buildings within 3 years
from the date of completion of construction(iii)

DBJ Green Building Certification: five stars, four stars, or three stars
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(iv)

LEED Certification: Platinum, Gold, or Silver * v4 or later for LEED BD+C

Eligibility Criteria-2: Renovation
Renovation of facilities that meets either of the following (i) or (ii).
(i)

Renovation work intended to improve the number of stars or the rank by one ormore for properties that have or will have one of the third-party certifications listed in
Eligibility Criteria-1.

(ii)

Renovation work that is expected to reduce either energy consumption, greenhousegas emissions, or water consumption by 30% or more.

2.2 Project Evaluation and Selection Process
The Finance Department and Asset Management Department of CIM will select the eligible
projects for which funds will be appropriated, and the Sustainability Committee will make thefinal decision.

The President and CEO of CIM is the final decision-maker for theSustainability Committee.
2.3 Management of Proceeds<Plan for Appropriation of Proceeds>
Proceeds will be appropriated promptly after confirming that the use is tied to the acquisition
or renovation of green buildings, or refinance of debt required for the acquisition or renovationof green buildings.
<System and Method of Tracking and Managing Procured Funds>
CIM’s Finance Department will track the appropriation of funds procured through GreenBonds and Green Loans using a management sheet for ESG finance.
<Internal Controls and External Audits on Tracking Management>
CIM conducts the internal audits for all operations, including fund-raising. In addition, thegeneral accounting operations are audited by an external auditor.
<Methods of managing unappropriated funds>
Until the proceeds are appropriated, they will be managed in cash or cash equivalents as
unappropriated funds.
Even after the full amount has been allocated, in the case of the assets for which the funds
were intended to be used are sold or damaged before the redemption, the temporary
unallocated funds will be managed through portfolio management (Note).
5(Note) Portfolio management is a management method that confirms that the total amount of green financebalance does not exceed the amount of green-eligible liabilities each fiscal period. The amount ofgreen eligible debt is calculated as the sum of the total acquisition price of green buildings multipliedby the ratio of the interest-bearing debt and the amount invested in the Eligibility Criteria-2. This
shall be the maximum amount that can be raised through Green Finance.

2.4 Reporting(1) Fund Allocation Status Reporting
Until the proceeds are allocated to eligible projects, the following will be reported on INV’s
website to the extent practically possible.
(i)

Total amount of proceeds appropriated(ii)

Balance of unappropriated funds(iii)

If there are unappropriated funds, the planned allocation timing and method of fundmanagement during the unallocated period

In addition, if there is a material change in the funding situation after the amount of theprocured funds has been allocated, we will disclose it in a timely manner.
(2) Impact Reporting
To the extent practicable, the following information will be disclosed on an annual basis on
INV’s website.
(a) Green Building(i)Type and level of environmental certifications obtained by the subject property(ii)Greenhouse gas emissions of the subject property(iii)

Energy consumption of the subject property(iv)

Water consumption of the subject property(b) Renovation
In the case of renovation work intended to improve the number of stars or rank by one ormore for any of the green building certifications set forth in the Eligible Criteria-1, the followingindicators:(i)Environmental certification obtained and rank

In the case of renovation work that can reduce energy consumption, greenhouse gasemissions, or water consumption by 30% or more, the pre- and post-renovation values or
reduction ratios for one of the following indicators:(i)Energy consumption(ii)

Greenhouse gas emissions(iii)

Water consumption
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