SECOND PARTY OPINION
EAST JAPAN RAILWAY COMPANY
GREEN BOND（1ST AND 2ND & 3RD EURODENOMINATED BONDS）POST-ISSUANCEPERIODIC REVIEW
Prepared by: DNV Business Assurance Japan K.K.
Location: Kobe, Japan
Date: 27 December 2023
Ref. Nr.: PRJN-461128-2022-AST-JPN-02

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Contents
Ⅰ. Scope and Objectives

3

Ⅱ. Responsibilities of JR East and DNV

4Ⅲ. Basis of DNV’s Opinion

4

Ⅳ. Work Undertaken

5

Ⅴ. Findings and DNV's Opinion

6

Ⅵ. Assessment Conclusion

10

Schedule-1 Green Bonds Allocation Projects

11

1st Euro-denominated Green Bonds (unsecured straight bonds)

11

2nd & 3rd Euro-denominated Green Bonds (unsecured straight bonds)

13

Schedule-2 Green Bonds Eligibility Assessment Protocol

17

Revision History
Date of Issue
27 December 2023

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

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

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

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Ⅰ. Scope and Objectives
East Japan Railway Company (hereinafter, “JR East”) has commissioned DNV Business
Assurance Japan (hereinafter, “DNV”) to conduct periodic reviews of its Green Bonds (1st and 2nd& 3rd Euro-denominated Green Bonds, hereinafter “these Bonds”).
The objective of the periodic review of DNV is to conduct an assessment to confirm that these
Bonds meet the criteria such as the Green Bond Principles (ICMA 2021, “GBP”), the Green Bond
Guidelines (Ministry of the Environment 2020, “GBGLs”), and the EU Taxonomy (European
Commission), and to provide a second party opinion on the eligibility of these Bonds.
JR East issued the 1st Euro-denominated Green Bonds (unsecured straight bonds) of EUR 750
million (approximately JPY 107.1 billion) 22 February 2023, and the 2nd & 3rd Green Bonds(unsecured straight bonds) of EUR 600 million (approximately JPY 95 billion) and EUR 700 million(approximately JPY 110.9 billion) each, for a total of EUR 1,300 million (approximately JPY 206
billion) on 5 September 2023. DNV conducted a periodic review for the period from February
2023 to November 2023 based on the GBP, GBGLs, and the EU Taxonomy.
DNV, as an independent external reviewer, identified no real or perceived conflict of interest
associated with the delivery of this second party opinion for JR East.
In this paper, no assurance is provided regarding the financial performance of the Green Bonds,
the value of any investment in the Green Bonds, or the long-term environmental benefits of thetransaction.

Standards/guidelines to be applied
No.

Standards/Guidelines

Scheme owner

Applied level*1

1.

Green Bond Principles

International Capital Market
Association (ICMA), 2021

Apply

2.

Green Bond Guidelines

Ministry of the Environment, 2022

Apply

European Commission

Apply

3.

EU Taxonomy (Transportation) (Energy)*2*1

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

*2

EU Taxonomy criteria “Transportation” (Activity number 6.1 “Passenger interurban rail transport” and 6.14
“Infrastructure for rail transport”) and “Energy” (Activity number 4.1 “Electricity generation using solar photovoltaic
technology” and 4.3 “Electricity generation from wind power”)

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

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

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

⚫

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

⚫

Principle Three: Management of Proceeds
The Management of Proceeds criteria are guided by the requirements that the Green
Bonds should be tracked within the issuing organization, that separate portfolios shouldbe created when necessary and that a declaration of how unallocated funds will behandled should be made.

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⚫

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

Ⅳ. Work Undertaken
Our work constituted a high-level review of the available information, based on the understandingthat this information was provided to us by JR East in good faith. We have not performed an audit
or other tests to check the veracity of the information provided to us. The work undertaken to form
our opinion included:i.

Pre-Issuance Assessment of Green Bonds (*not included in this report)•

Creation of a JR East specific Protocol, adapted to the purpose of the Green Bonds, as
described above and in Schedule-2 to this assessment;•

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

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

Documentation of findings against each element of the criteria.

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

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

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

Field research and inspection (if necessary);•

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

Document creation of post-issuance assessment result.

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

Principle One: Use of Proceeds
DNV has confirmed that, as of December 2023, JR East had allocated a part of the net proceeds
out of the proceeds from these Bonds (EUR 2,050 million) to the eligible projects*1 described in
Schedule-1.
*1

Eligible projects are those that meet the eligibility criteria of the “East Japan Railway Company
Sustainability Finance Framework” developed by JR East. Please see the “East Japan Railway Company
Green Bond ANNEX - Second Party Opinion” for details of the projects.
East Japan Railway Company Sustainability Finance Framework:https://www.jreast.co.jp/e/investor/sustainable-finance/pdf/sustainabilityfinance_framework_en.pdf

East Japan Railway Company Green Bond ANNEX - Second Party Opinion:
1st Euro-denominated Green Bonds
2nd and 3rd Euro-denominated Green Bonds

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

As of December 2023, the Executive Director/Director General of Corporate Strategies Headquarters
is in charge.

As for the environmental and social impact of investments and business operations, DNV has
confirmed that the Group company/department in charge of the project identifies and assesses
risks in line with the company-wide risk management system and under the management of the
Corporate & Legal Strategies Department before the implementation of investment or businessto reduce risks or take other measures where necessary, and that a system has been
established to ensure that the proceeds of Green Bonds etc. are not allocated to projects related
to the following:

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•Transactions that do not comply with the laws and regulations of the country in which theytake place, including laws in relation to unfair business practices, bribery, corruption,
extortion, and embezzlement.

Principle Three: Management of Proceeds
DNV has confirmed how JR East has managed the proceeds since February 2023 until
November 2023. The allocation status of proceeds is shown in Tables 1 and 2 in Principle Four.
DNV has confirmed that the net proceeds are managed on a quarterly basis by the Finance &Investment Planning Department of JR East, which prepares a dedicated management sheet
and manages the allocation status.
DNV has confirmed that JR East had allocated a part of the net proceeds from these Bonds toeach eligible project as planned by November 2023. DNV has also confirmed that, as of 30
September 2023, the unallocated proceeds of the 1st Euro-denominated Green Bonds (EUR 88
million) and of the 2nd and 3rd Euro-denominated Green Bonds (EUR 552 million) weremanaged in cash.
Note as mentioned earlier that no assurance is provided regarding the financial performance ofGreen Bonds, the value of any investment, or the long-term environmental benefits of thetransaction.

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

<Allocation status>
1st Euro-denominated Green Bonds (unsecured straight bonds)
DNV has confirmed that a part of the net proceeds from the 1st Euro-denominated Green Bonds(unsecured straight bonds) was allocated to eligible projects as planned, and that the unallocatedproceeds (EUR 88 million) were managed in cash, as shown in Table-1.

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Table-1 1st Euro-denominated Green Bonds (unsecured straight bonds)
Eligible
projects
Train cars
(Shinkansen
Series E7
train)
Railwayfacilities (toincrease andmaintain theresilience ofrailway)

GBP
Category

EU Taxonomy

Cleantransportation

No. 6.1
Passengerinterurban railtransport

Cleantransportation
Climate change
adaptation

No. 6.14
Infrastructure
for railtransport

Amountofproceeds

EUR 748
millionTotal amount

Allocated amountNew
Refinancing
investment

UnallocatedamountEUR 466
million――EUR 176
millionEUR 17
millionEUR 88millionEUR 88millionEUR 660 million

2nd & 3rd Euro-denominated Green Bonds (unsecured straight bonds)
DNV has confirmed that a part of the net proceeds from the 2nd and 3rd Euro-denominatedGreen Bonds (unsecured straight bonds) was allocated to eligible projects as planned, and thatthe unallocated proceeds (EUR 552 million) were managed in cash, as shown in Table-1.

Table-2 2nd & 3rd Euro-denominated Green Bonds (unsecured straight bonds)
Eligible
projects
Train cars
(Shinkansen
Series E5
train and E8
train)
Train cars
(Conventional
railcars Series
E235, E131,
E233 trains)
Railwayfacilities (toincrease andmaintain theresilience ofrailway)
Soler power
generation

GBP
Category

Cleantransportation

EU Taxonomy

Amountofproceeds

No. 6.1
Passengerinterurban railtransport

Allocated amountRefinancing

New
investment

EUR 199
million―EUR 292
million

―

EUR
1,296
millionEUR 552
millionCleantransportation
Climatechangeadaptation

No. 6.14
Infrastructure
for rail transport

EUR 182
million―RenewableenergyNo. 4.1
Electricity
generation
using solar

EUR 71
million―

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Unallocatedamountphotovoltaic
technology
No. 4.3
Electricity
generation fromwind power

Wind power
generation
Total amountEUR 744 million

EUR 552
million<Environmental benefits>
Eligible projects
Train cars
(Shinkansen Series
E7 train)
Train cars
(Shinkansen Series
E5 train and E8
train)

1st Green
Bonds〇(Shinkansen
railways)Environmental benefits
Results of introducing railcars
Series E7: 39 railcars (introduced)〇

Train cars
(Conventional
railcars Series E235,
E131, E233 trains)
Railway facilities (toincrease andmaintain theresilience of railway)

2nd & 3rd
Green Bonds〇

Results of introducing railcars
Series E5: 51 cars (introduced)
Series E8: ―〇Results of introducing railcars
Series E235: 57 railcars (introduced)
Series E131: 27 railcars
Series E233: －〇(Shinkansen &conventional
railways)

Soler power
generation〇

Wind power
generation〇

Details of disaster countermeasures for railway
facilities and progress of projects
Seismic reinforcement of railway facilities
3,581 elevated bridge pillars
Power generation by power plants in operation*1:
79,025 MWh/year
CO2 reduction rate (FY2022)*3: 34,927 t-CO2/year
Power generation by power plants in operation*2:
28,127 MWh/year
CO2 reduction rate (FY2022)*3: 12,207 t-CO2/year*1 Location and total equipment capacity of power plants already in operation: 87.3 MW (Tomioka Revitalization Mega Solar
Plant SAKURA, Daigo Solar Power Plant, Ichikai Solar Power Plant, Morioka Tamayama Solar Power Plant)*2 Location and total equipment capacity of power plants already in operation: 21.8 MW (Nishime-Nishinosawa Wind Power
Plant, Mitane Wind Power Plant, Minehama Wind Power Plant)*3 CO2 reduction rate ＝ ”Power generation by power plants in operation” × ”Percentage of contribution” × ”CO2 emission
factor”

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Ⅵ. Assessment Conclusion
On the basis of the information provided by JR East and the work undertaken, it is DNV’s opinion
that JR East meets the criteria established in the Protocol and that it is aligned with the stateddefinition or purpose of the Green Bonds within the GBP and GBGLs, which is to “enable capitalraising and investment for new and existing projects with environmental benefits.”

DNV Business Assurance Japan K.K.
27 December 2023

Thomas Leonard

Naoki Maeda

Head of Section, Sustainability Services

Representative Director/SCPA

Supply Chain & Product Assurance

Senior Vice President

DNV Australia, New Zealand and Southeast Asia

DNV Business Assurance Japan K.K.

Masato Kanedome

Akira Tsukasaki

Project Leader

Assessor

DNV Business Assurance Japan K.K.

DNV Business Assurance Japan K.K.

About DNV
Driven by our purpose of safeguarding life, property and the environment, DNV enables organisations to advance the safety
and sustainability of their business. Combining leading technical and operational expertise, risk methodology and in-depth
industry knowledge, we empower our customers’ decisions and actions with trust and confidence. We continuously invest in
research and collaborative innovation to provide customers and society with operational and technological foresight.
With our origins stretching back to 1864, our reach today is global. Operating in more than 100 countries, our 16,000
professionals are dedicated to helping customers make the world safer, smarter and greener.

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

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Schedule-1 Green Bonds Allocation Projects
1st Euro-denominated Green Bonds (unsecured straight bonds)
Green eligible projects
No.

Category

Project overview

Sub
Category

Project: Train cars (Shinkansen Series E7 train)
EU Taxonomy(Sector 6, Transport)

1

Clean
transportation

Overall railtransportation

6.1“Passenger interurban
rail transport”

 Train cars (Shinkansen Series E7 train) are direct zero emission railcars,
which meet climate mitigation criteria of “Passenger interurban railtransport” in EU Taxonomy 6.1.
 The proceeds have been allocated to manufacturing Shinkansen Series E7
trains (the latest series with improved safety and comfortability), which
will be operated at the Joetsu and Hokuriku Shinkansen line (from Tokyo
to Niigata (Joetsu), and to Kanazawa (Hokuriku)), and purchasing ofequipment.
➢ DNV has confirmed that the introduction of railcars had completed asplanned.

2

Cleantransportation

Project: Railway facilities (to increase and maintain the resilience of railway)
EU Taxonomy(Sector 6, Transport）

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Green eligible projects
No.

Category

Project overview

Sub
Category

Climatechangeadaptation
6.14“Infrastructure for railtransport”

 Railway facilities are essential for economic activity to increase (reinforce)and maintain the resilience against natural disasters within the operation
area of direct zero emission trains of JR East, which meet climate
mitigation criteria of “Infrastructure for rail transport” in EU Taxonomy
6.14.
 The proceeds will be allocated to civil engineering, construction work, andpurchasing of equipment of railways of Shinkansen.
➢ DNV has confirmed that the project is progressing as planned.

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2nd & 3rd Euro-denominated Green Bonds (unsecured straight bonds)
Green eligible projects
No.

Category

Project overview

Sub
Category

Project: Train cars (Shinkansen Series E5, E8 and conventional railcars Series E235, E131,
E233 trains)
EU Taxonomy(Sector 6, Transport)

 Train cars (Shinkansen Series E5, E8 and conventional railcars Series
E235, E131, E233 trains) are direct zero emission railcars, which meetclimate mitigation criteria of “Passenger interurban rail transport” in EU
Taxonomy 6.1.
 The proceeds will be allocated to manufacturing of the following railcars
and purchasing of equipment:

1

Clean
transportation

Overall railtransportation

6.1“Passenger interurban
rail transport”- Shinkansen Series E5 train, which will be operated at Tohoku andHokkaido Shinkansen line (from Tokyo to Shin-Aomori (Tohoku) and
Shin-Hakodate-Hokuto (Hokkaido)), and Shinkansen Series E8 train(the latest series with improved safety and comfortability), which will
be operated at Yamagata Shinkansen line (from Tokyo to Shinjo(Yamagata))➢ DNV has confirmed that the introduction of the Series E5 train hadcompleted, and that the introduction of the Series E8 is progressing
as planned.
- Conventional railcars Series E235 train, which will be operated in theTokyo metropolitan area, Series E131 train, which will be operated insuburban areas of the Tokyo metropolitan area, and Series E233

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Green eligible projects
No.

Category

Project overview

Sub
Category

train, which will be operated in the Tokyo metropolitan area and its
suburbs.
➢

DNV has confirmed that the introduction plans for the Series E235,
E131, and E233 are progressing smoothly.

Project: Railway facilities (to increase and maintain the resilience of railway)
EU Taxonomy(Sector 6, Transport）

2

Clean
transportation
Climatechangeadaptation

6.14“Infrastructure for railtransport”

 Railway facilities are essential for economic activity to increase (reinforce)and maintain the resilience against natural disasters within the operation
area of direct zero emission trains of JR East, which meet climate
mitigation criteria of “Infrastructure for rail transport” in EU Taxonomy
6.14.
 The proceeds will be allocated to civil engineering, construction work, andpurchasing of equipment of railways of Shinkansen and conventional
railways.
➢ DNV has confirmed that the project is progressing as planned.

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Green eligible projects
No.

Category

Project overview

Sub
Category
Project: Solar power generation
EU Taxonomy(Sector 4, Energy）

Solar power3
Renewableenergygeneration
Wind power
generation

4.1“Electricity
generation using
solar photovoltaic
technology”

 Solar power generation is the activity generates electricity using solar PV
technology, which meets climate mitigation criteria of “Electricity
generation using solar photovoltaic technology” in EU Taxonomy 4.1.
 The proceeds will be allocated and managed by adopting a portfolio
management approach. Specifically, the proceeds will be allocated andmanaged as part of the investment in several solar power plants,
including those already in operation and under construction, invested by
JR East Energy Development Co., Ltd., a consolidated subsidiary to which
JR East provides loans through its cash management system.
➢ DNV has confirmed that the power plants that have already started
operation are operating smoothly and that the environmental benefits
are being obtained. DNV has also confirmed that the power plants
under construction are progressing smoothly as planned toward thestart of operation.

Project: Wind power generation
4

EU Taxonomy(Sector 4, Energy）

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Green eligible projects
No.

Category

Project overview

Sub
Category Wind power generation is the activity generates electricity from wind
power, which meets climate mitigation criteria of “Electricity generationfrom wind power” in EU Taxonomy 4.3.

4.3
“Electricity
generation fromwind power”

 The proceeds will be allocated and managed by adopting a portfolio
management approach. Specifically, the proceeds will be allocated andmanaged as part of the investment in several wind power plants,
including those already in operation and under construction, invested by
JR East Energy Development Co., Ltd., a consolidated subsidiary to which
JR East provides loans through its cash management system.
➢ DNV has confirmed that the power plants that have already started
operation are operating smoothly and that the environmental benefits
are being obtained. DNV has also confirmed that the power plants
under construction are progressing smoothly as planned toward thestart of operation.

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

GBP-1 Use of Proceeds
Ref.

Criteria

Requirements

1aType of bond

The bond must fall in one of the following Confirmed documents:
categories, as defined by the Green Bond • East Japan Railway Company
Principles:
Sustainability Finance•Green Use of Proceeds Bond
Framework (hereinafter, the•Green Use of Proceeds Revenue Bond
“Framework”)•
Green Project Bond
Interviews with JR East•
Other

Through the evaluation process, DNV has confirmed that JR East's
Green Bonds fall into the following categories:

The cornerstone of a Green Bond is theutilization of the proceeds of the bondwhich should be appropriately describedin the legal documentation for the
security.

DNV has confirmed that the proceeds had been allocated to thefollowing projects:

1bGreen Project
Categories

Work Undertaken

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

DNV Findings

Green Use of Proceed Bond

<Clean transportation>- Train cars (Shinkansen Series E7 train)- Train cars (Shinkansen Series E5, E8 and conventional railcars
Series E235, E131, E233 trains)<Clean transportation and Climate change adaptation>- Railway facilities (to increase and maintain the resilience of railwayof Shinkansen and conventional railways)<Renewable energy>- Solar power generation

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Ref.

Criteria

Requirements

Work Undertaken

DNV Findings- Wind power generation

1c

Environmental
benefits

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

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

DNV has confirmed that the green project will contribute to the
reduction of CO2 emissions associated with railroad operations.

1d

Refinancing
share

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

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

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

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GBP-2 Process for Project Selection and Evaluation
Ref.

Criteria

2a2bRequirements

Work Undertaken

DNV Findings

InvestmentThe issuer of a Green Bond should outline
decision process the decision-making process it follows todetermine the eligibility of projects using
Green Bond proceeds. This includes,
without limitation:• A process to determine how the
projects fit within the eligible Green
Projects categories identified in the Green
Bond Principles;• The criteria making the projects eligible
for using the Green Bond proceeds; and • The environmental sustainability
objectives

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

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

Issuer’s
environmental
and social andgovernanceframework

Confirmed documents:• Framework• Assessment documentation• Website
Interviews with JR East

DNV has confirmed, through the documentation review etc., thatthe planned Green Bonds are in line with JR East’s business andenvironmental initiatives such as “Move Up” 2027, the “Energy
Vision 2027 – Connect,” “Zero Carbon Challenge 2050,” etc., andare closely related to the business and environmental sustainability.

In addition to information disclosed by anissuer on its Green Bond process, criteria
and assurances, Green Bond investors
may also take into consideration thequality of the issuer’s overall framework
and performance regarding
environmental sustainability.

Page 19 of 21- The Finance & Investment Planning Department selects eligible
projects and the Director* in charge of Finance & Investment
Planning gives approvals.
※ As of December 2023, the Executive Director/Director
General of Corporate Strategies Headquarters is in charge.
- In assessing the eligibility of the projects, a comprehensive
analysis and review of financial aspects, technical andoperational aspects, market environment, and ESG risks should
be undertaken.

GBP-3 Management of Proceeds
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

3aTracking
procedure-1

The net proceeds of Green Bonds shouldbe credited to a sub-account, moved to a
sub- portfolio or otherwise tracked by theissuer in an appropriate manner andattested to by a formal internal processthat will be linked to the issuer’s lending
and investment operations for Green
Projects.

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

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

3b

Tracking
procedure-2

So long as the Green Bonds areoutstanding, the balance of the tracked
proceeds should be periodically reducedby amounts matching eligible green
investments or loan disbursements madeduring that period.

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

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

3c

Temporaryholdings

Pending such investments orConfirmed documents:
disbursements to eligible Green Projects, • Framework
the issuer should make known to• Assessment documentation
investors the intended types of temporary Interviews with JR East
investment instruments for the balance of
unallocated proceeds.

DNV has confirmed that JR East has disclosed the allocation status ofproceeds on its website on an annual basis until the proceeds of theGreen Bonds are fully allocated. The disclosure includes the amountof allocated proceeds on a project-by-project basis, the allocatedamount of proceeds, and the amount allocated to refinancing.
DNV has also confirmed that the progress of the project and theenvironmental benefits are published on its website on an annual
basis until the allocation is completed.

Page 20 of 21

GBP-4 Reporting
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

4aPeriodical
reportingIn addition to reporting on the use ofproceeds and the temporary investmentof unallocated proceeds, issuers should
provide at least annually a list of projects
to which Green Bond proceeds have been
allocated including- when possible with regards toconfidentiality and/or competitive
considerations- a brief description of the projects andthe amounts disbursed, as well as the
expected environmentally sustainable
impact.

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

DNV has confirmed that JR East plans to organize each time ofissuance and report annually on the allocation status of proceedsfrom the Green Bonds and environmental benefits until theproceeds are fully allocated.
The reporting discloses the following information as far aspracticable per eligible project category or per eligible project:【Allocation status】- Allocated amount- Unallocated amount- Refinancing amount【Environmental benefits】- Results of introducing railcars, storage battery-driven trains, or
hybrid railcars- Details of maintenance, renovation, and renewal of equipment
essential for railway operations, and disaster countermeasures(railway facilities)- Overview of renewable energy project (project name, location,
output capacity in kW, CO2 reductions)Page 21 of 21