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Obayashi Corporation / Obayashi Green Bond

Green bond eligibility pre-issue assessment report

DNV GL second party opinion

Oct. 2018

DNV GL Business Assurance Japan K.K.

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Contents
I

Introduction (About issuer and green bond)3

Ⅱ

Scope and Objectives

7

Ⅲ

Responsibilities of the Directors of Issuer(Obayashi) and the assurance providers, DNV GL

9Ⅳ

Basis of DNV GL’s opinion

10

Ⅴ

Work undertaken

11

Ⅵ

Findings and DNV GL’s opinion (eligibility against for GB criteria)

121.

Schedule-1 (Nominated assets & Green bond project outline)

212.

Schedule-2 Green Bond Eligibility Assessment Protocol

22

(1)

Use of proceeds

22

(2)

Process for Project Selection and Evaluation

25

(3)

Management of proceeds

26

(4)

Reporting27

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Obayashi Green BondDNV GL Second Party Opinion

I

Introduction (About issuer and green bond)(1) Obayashi Corporation
The predecessor of Obayashi Corporation (hereafter, Obayashi) was founded on
25 January 1892 as a civil engineering and building construction contractor in
Osaka. Obayashi has been as one of the largest general construction company.
Obayashi Group has expanded its presence all over the world with 14,359
employees. Obayashi Group is consisted of 93 consolidated subsidiaries and 25
affiliates (as of 31 March 2018).

(2) Obayashi Philosophy
Obayashi disclosed its contribution to realize sustainable society considering
global environment in its corporate philosophy
Obayashi's Vision and Mission in Society
A Leading Sustainability Company
1 Exercise honest craftsmanship with superior technologies and create newvalue in every space.
2 Care for the global environment and create solutions to social challenges
as a good corporate citizen.
3 Value each person with a stake in our business.
By keeping these promises, Obayashi Corporation contributes to realizing asustainable society.

(3) Obayashi Environmental Policy and Vision
Obayashi has established its Environmental Policy and Vision. Obayashi proceeds its
initiative to appoint the global environmental issues and established medium- to longterm environmental vision, "Obayashi Green Vision 2050," in 2011 in order to achieve
CO2 emission reduction.
Please refer to the Appendix-1 “Obayashi Environmental Policy and Vision”

Page 4 of 27(4) Obayashi Green Bond
Obayashi addresses “Promote the renewable energy business” and “Promote
environmentally responsible real estate development projects” in order to achieve
low carbon society which includes in ‘3+1 Society’ based on medium-to long-term
environmental vision, “Obayashi Green Vision 2050”.
Obayashi Green Bond will be allocated to the following eligible green project
activities.

“Promote the renewable energy business”- Solar PV business- Wind power business (onshore and offshore)“Promote environmentally responsible real estate development projects”- Green building
Fund allocation includes finance and/or refinance. Please refer to the schedule-1

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Appendix-1
Obayashi Environmental Policy and Vision(i) Environmental Policy-Principles
As a good corporate citizen, Obayashi considers active efforts and continuous
improvement of environmental issues to be integral components of business
management. We envision our future society, seeking to contribute to a realization ofsustainable society.
-Policies
1

2

3

We strive to protect the environment, acting in full compliance with allenvironmental statutes and ordinances, communicating with local
communities.
We gather our knowledge for realization of resilient society that integrates
the elements of low-carbon, recycling-oriented and respecting the natural
world.
We use the expertise we have acquired through our environmental
protection activities, developing even more effective technologies andimplementing new businesses to realize sustainable society.

We sincerely focus on our business, with our affiliates, subcontractors and suppliers,
holding targets and vision to realize a sustainable society.
(2) Vision (Obayashi Green Vision 2050)
Our medium- to long-term environmental vision, "Obayashi Green Vision 2050,"
which was established by using backcasting methodology in February 2011, outlines
the future course of our business activities in terms of helping to build a sustainable
society. It sets forth specific action plans and numerical CO2 emissions reduction
targets that will be crucial to achieving our vision of society in 2050.
Our vision for society in 2050 is what we call “3+1 Society”, an approach that
integrates the elements of “low-carbon,” “recycling-oriented” and “respect for thenatural world”, predicated on “safety and security”. To achieve that, we haveestablished a concrete action plan and are moving forward with various initiatives.

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In this paper, no assurance is provided regarding the financial performance of the
BOND, the value of any investments in the BONDS, or the long term
environmental benefits of the transaction. DNV GL Business Assurance Japan K.K.
(henceforth referred to as DNV GL) ’s objective has been to provide anassessment that the BOND has met the criteria of the Green Bond Principle andthe associated Technical Criteria on the basis set out below.

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Ⅱ

Scope and Objectives
Obayashi issues a green bond to address its “Promote the renewable energy
business” and “Promote environmentally responsible real estate development
projects” in order to achieve low carbon society. Obayashi strengthens its businessfoundation and also addresses to obtain its stakeholder’s deeper understanding of“Obayashi Green Vision 2050” through the green bond.
Obayashi intends to finance investments in specific green project categories,
including:-‘Renewable energy’ and ‘Energy efficiency (Green Buildings)’ (GBP 2018 and Green
Bond Guidelines, 2017 category)-

Schedule-1 shows the nominated green projects and assets-‘Renewable energy’ includes 3 Solar PV projects and 2 Wind power projects (1onshore power station and 1 offshore dedicated facility construction). ‘Energy
Efficiency (Green Buildings)’ is a green building (commercial property).

-

As some directly and/or indirectly benefit of above projects/business, 'CO2 emission
reduction' from energy source is prospected.

-

Total fund of Obayashi's green bond, 10 billion JPY (redemption period 5 years) will
be fully allocated to green activities which include both finance and refinance.
Refinance amount and/or ratio will be reported/disclosed in OBAYASHI Corporate
Report and environmental achievement report on its website(homepage) annually.

-In this green bond projects, environmental risks (e.g. land use, ecological system
impact) have been identified by issuer and issuer has taken appropriate
countermeasures to mitigate its impact for all projects. Issuer also has demonstrated
to comply related law and regulation, environmental assessment, public acceptanceand required evaluation.

-

Environmental benefit will be reported annually by issuer, Obayashi which includes
CO2 emission reduction evaluation by 3 Solar PV projects and 1 Onshore wind power
project categorized into ‘Renewable energy’. Offshore wind power project plans tobuild a SEP (Self Elevating Platform) and will be reported the number of the bottom
mounted wind power facilities supported by SEP. Above information will bereported/disclosed in OBAYASHI Corporate Report and environmental achievement
report on its website(homepage) annually. As for the ‘Energy efficiency (green
building)’ certified as BELS 5 stars, Obayashi has published the efficiency of CO2
emission reduction evaluation/plan based on its primary energy consumption by eco
design basis (2016), environmental benefit will not be included in annual report byits performance.

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DNV GL holds no other engagements with Obayashi including its direct
shareholders, for which we foresee conflict of interest to carry out the Scope ofWork as defined in the Request for Proposal.

Obayashi intends to distribute any unallocated proceeds in line with the Use ofProceeds and Management of Proceeds sections set out in the Obayashi Green
Bond Framework.
DNV GL has been commissioned by Obayashi to provide a Green Bond pre-issue
second party opinion. Our methodology to achieve this is described under ‘V Work
Undertaken’ below. We were not commissioned to provide independent assurance
or other audit activities.
In this paper, no assurance is provided regarding the financial performance of the
BOND, the value of any investments in the BONDS, or the long term environmental
benefits of the transaction. Our objective has been to provide an assessment thatthe BOND has met the criteria established on the basis set out below.
The scope of this DNV GL opinion is limited to the Green Bond Principles 2018
(GBP2018). DNV GL also considered the requirements of the Green Bond
Guidelines, 2017 (MOE, Japan 2017) and Climate Bond Standard Version 2.1
during its assessment, however at the time of review, Technical Criteria for ‘Renewable energy’ (Solar Energy, Wind Energy and Marine Renewable Energy) areavailable for Issuer use. Technical Guidance for ‘Energy Efficient’ (Green Buildings,
commercial property) is applicable to this BOND.
No opinion of conformance with the Standard is provided here and no Certification
has been applied for at this time. Any future application for Certification under the
Climate Bond Standard would be at the discretion of the Issuer, Obayashi.

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Ⅲ

Responsibilities of the Directors of Issuer(Obayashi) and theassurance providers, DNV GL
The management of Obayashi has provided the information and data used by DNV
GL during the delivery of this review. Our statement represents an independent
opinion and is intended to inform Obayashi 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 have relied on theinformation and the facts presented to us by Obayashi.
DNV GL is not responsible for any aspect of the nominated assets referred to in thisopinion and cannot be held liable if estimates, findings, opinions, or conclusions areincorrect. Thus, DNV GL shall not be held liable if any of the information or data
provided by Obayashi’s management and used as a basis for this assessment were
not correct or complete.

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Ⅳ

Basis of DNV GL’s opinion
To provide as much flexibility for the issuer, Obayashi, as possible, we haveadapted our Green Bond Principles*1, and refer to the Green Bond Guidelines,
2017*2 and Climate Bond Standard*3 assessment methodologies, which
incorporates the requirements of the GBP, to create a Obayashi-specific Green
Bond Eligibility Assessment Protocol (henceforth referred to as “Protocol”).
Obayashi-specific Protocol has the capacity for potential application of the Bond
under the Green Bond Guidelines, 2017 and Climate Bond Standard should
Technical Criteria under the Standard become available. Our Protocol includes aset of suitable criteria that can be used to underpin DNV GL’s opinion. The
overarching principle behind the criteria is that a green bond should “enable
capital-raising and investment for new and existing projects with environmental
benefits”.
As per our Protocol, the criteria against which the BOND has been reviewed aregrouped under the four Principles:•

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

•

Principle Two: Process for Project Evaluation and Selection. The Project Evaluation and
Selection criteria are guided by the requirements that an issuer of a green bond should outline
the process it follows when determining eligibility of an investment using Green Bond 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 a green bond should be tracked within the issuing organization, that
separate portfolios should be created when necessary and that a declaration of how unallocatedfunds will be handled should be made.

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

*1:Green Bond Principle (June 2018, International Capital Market Association)*2:Green Bond Guidelines, 2017 (March 2017, Ministry of the Environment, Japan)*3:Climate Bond Standard | version 2.1 (Climate Bonds Initiative)

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ⅤWork undertaken
Our work constituted a high level review of the available information, based on theunderstanding that this information was provided to us by Obayashi in good faith.
We have not performed an audit or other tests to check the veracity of theinformation provided to us. The work undertaken to form our opinion included:•

Creation of an Obayashi-specific Protocol, adapted to the purpose of the
BOND, as described above and in Schedule 2 to this Assessment;•

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

Discussions with Obayashi management, and review of relevant
documentation;•

Documentation of findings against each element of the criteria. Our opinion as
detailed below is a summary of these findings.

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Ⅵ

Findings and DNV GL’s opinion (eligibility against for GB criteria)

1. Principle One, Use of Proceed
DNV GL has confirmed that the proceeds from the bond issued by Obayashi will beallocated to the two businesses (including 6 projects) which meet the green bondcriteria below;
Eligibility Criteria of Green Bond:
Renewable energy (Project 01-05)
Energy efficiency (Green Buildings) (Project 06)
Schedule-1 shows lists of green project 01-06
All the proceeds will be financed and/or refinanced to the green projects. As for thefinance, it will be allocated to SEP new construction/building including its planning,
design and related management and activities of the project.
Detail information about green projects are followings

Project 01-03 : Solar PV project (refinance), 3.5 billion JPY
Obayashi will allocate the proceeds from the green bond to its financial consolidated
subsidiary, OC Finance Corporation(OCF). OCF lent subordinated loan to SPCs which
manage solar PV project (OCE Ashikita Mega Solar Corporation, OCE Kushiro Mega
Solar Corporation, OCE Hyuga Mega Solar Corporation which are subsidiaries of
Obayashi Clean Energy Corporation. Allocated proceeds to OCF will go to repaymentof the long-term debt payable borrowed from financial institution.

Project 01 Ashikita Solar Power Station, Solar PV

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Project 02

Kushirocho Toritoushigenya Solar Power Station, Solar PV

Project 03 Hyugahichiya Solar Power Station, Solar PV

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Project 04 : Onshore wind power (refinance) , 0.5 billion JPY
Obayashi will allocate the proceeds from the green bond to repayment of short-term
debt and redemption of commercial paper to backup credit line for its renewable energy
SPC. The renewable energy SPC which is subsidiary of Obayashi Clean Energy Corporation,
manage Onshore wind power (Obayashi Wind Power Mitane Co., Ltd.)

Project 04 Mitanehamada Wind Power Station

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Project 05 : SEP (Self Elevating Platform) construction/building (finance)(balance)
Obayashi will allocate the proceeds from the green bond to the SEP (Dedicatedasset for marine renewable (wind energy) support) new building. The following
picture shows SEP image.
Obayashi considers that planned SEP will be available to the domestic offshore wind
power construction market expected the momentum in the future which correspondswith offshore wind power expansion and promotion in the “The 5th Strategic Energy
Plan” issued by Japanese government (Jul 2018), METI (Ministry of Economy, Tradeand Industry) as well as Japan Wind Power Association’s (JWPA) promotion of
offshore wind power installation. The largest scale jack up system and cranefacilities will be installed to this SEP and SEP can construct large scale bottom
mounted offshore wind power facility (5.0MW class) embarking with several windturbines under the various marine conditions with high efficient work.

Obayashi published SEP project in its homepage (only in Japanese language available)
https://www.obayashi.co.jp/news/detail/news20180925_1.html

Project 05

SEP（Self Elevating Platform）Image

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Project 06: Green building (BELS 5 stars) (refinance), 3 billion JPY
Obayashi will allocate green bond proceeds to its repayment of long-term debt.
Obayashi financed long-term debt from financial institution as funds to Obayashi
Shinseiwa Real Estate Corporation for the construction and acquisition of lease-officebuilding, ‘oak kanda-kajicho’. ‘oak kanda kaji-chou’ construction was completed in2017 and certified as BELS 5 stars (the highest ranked) as energy efficiency building
reducing 40 % of primary energy consumption. BELS certification is one of therepresentative certification as green building in Green Bond Guidelines, 2017
(Ministry of the Environment, Japan).

Project 06 oak kanda kaji-chou (commercial property)

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2. Principle Two, Process for Project Evaluation and Selection
DNV GL has confirmed that the green projects of all two businesses including 6
projects described in the Schedule-1, were evaluated and selected through theappropriate process by the relevant department of Obayashi based on its corporate
philosophy and environmental policy of the contribution to the environment
including” Obayashi Green Vision 2050”.
DNV GL has reviewed evidence that demonstrates that Obayashi regularly
assesses opportunities for improvement and devises action plans and initiatives tomitigate negative environmental and social impacts from its operation. DNV GL
also confirmed that Obayashi plans the project and asset integrity for long-term
and appropriate environmental benefit evaluation in the asset life time.
Specifically, as for the negative impact (environmental risks, such as land use,ecological system and public acceptance) caused by these projects, appropriate
countermeasures and practical action plans which comply relevant regulations andlaws have been taken and will be taken after the evaluation (e.g. Project due
diligence report, agreement with local government, etc.). DNV GL confirmed that
Obayashi resulted its effect is limited and appropriate action will be executed if
required.

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3. Principle Three, Management of Proceeds
DNV GL has reviewed and confirmed Obayashi’s plans to trace/manage theproceeds from the Bond, from the time of issuance to the time of disbursement, as
well as the appropriateness and clarity of their plan to manage total amount of theproceeds. Obayashi will manage the cash or cash equivalents which equals to fund,until decision of the proceed allocation. DNV GL has confirmed that Obayashi will
periodically (at least every quarter) review the outstanding balance of the Bond.
Total amount of fund has not been defined in this document, then will be disclosed
in the legal documentation.
As stated above, DNV GL provides no assurance regarding the financial
performance of the Bond, the value of any investments in the Bond, or the effectsof the transaction.

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4. Principle Four, ReportingDNV GL has confirmed that Obayashi has plans to report/disclose the specificinformation required by the Green Bond Principle 2018 in OBAYASHI Corporate
Report and Obayashi’s website annually. These will include description of the
project list and its progress, allocation including refinance amount andmanagement of the proceeds invested, as well as the associated qualitative or
quantitative environmental impacts* (e.g. amount of CO2 emission reduction
evaluation and SEP performance described in section Ⅱ).
As for the environmental benefit, DNV GL has confirmed that Obayashi plans toevaluate/calculate in the appropriate method based on the operation performanceof each project (such as operation record) and report. DNV GL will conductperiodic ongoing reviews and state about validity of evaluation/calculation process
and its result in the periodical report.

* Evaluation/Calculation process of environmental benefit (Plan)•

Renewable energy (Solar PVs, Wind power) : CO2 emission reduction amountbased on the actual operation record (electricity generation) (t-CO2/kg)•

SEP（Self Elevating Platform）: the number of the bottom mounted wind
power facilities supported by SEP (numbers/year)(note ; Green building environmental benefit)
Obayashi has published the efficiency of CO2 emission reduction
evaluation/plan based on its primary energy consumption by eco designbasis (2016, Environmental achievement report in Obayashi web site*),environmental benefit will not be included in annual report by its
performance.
*https://www.obayashi.co.jp/sustainability/upload/img/environment_data2018.pdf

Considering all of the above assessments, DNV GL has confirmed that thenominated green projects of Obayashi are designed and are planned to be
executed in accordance with related criteria of the green bond (Green Bond
Principles 2018 and Green Bond Guidelines, 2017 by Ministry of the Environment,
Japan).

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DNV GL Business Assurance Japan K.K.

15th. Oct. 2018Mark Robinson

Naoki Maeda

Manager, Sustainability Services
DNV GL – Business Assurance, Australia

Managing Director
DNV GL – Business Assurance Japan K.K.

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

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

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1. Schedule-1 (Nominated assets & Green bond project outline)
No.

Nominated projects andassets

GBP category

GBP Sub category(environmental
benefit)Ashikita Solar Power Station

Funded amountRemarks

plan (Total 10
billion JPY)

(location, output, outline)

3.5 billion JPY

01(refinance)

02

Kushirocho Toritoushigenya Solar
Power Station- Ashikita, Kumamoto, 21.5MW, Apr
2014 commercial operation- Kushiro, Hokkaido, 17.8MW, Apr
2017 commercial operation

Solar PV(refinance)
Hyugahichiya Solar Power Station

Renewable energy(refinance)[Energy source CO2 emission
reduction]

03

Mitanehamada Wind Power Station- Hyuga, Miyazaki, 24.5MW,
2017 commercial operation
0.5 billion JPY[*No.05: the number of thebottom mounted wind power
facilities supported by SEP]

04

- Mitane, Akita, 5.97MW, Nov 2017
commercial operation

Wind Power (onshore)(refinance)

SEP (Self Elevation Platform)

Dedicated Offshore wind
power construction facility

05(new construction)

Oak kanda kaji-chou06(refinance)

Energyefficiency
buildings)(Balance)- For bottom-mounted wind power
station, made by JMU

3 billion JPY(green[Energy source CO2 emission
reduction]

May

Certified energy efficiency
building (for commercial)- Tokyo, Chiyoda, BELS certification(5 stars) commercial office building

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2. Schedule-2 Green Bond Eligibility Assessment Protocol
Obayashi Green Bond Framework and Amendment to Shelf Registration Statement will be published for explanation to investor(1)

Use of proceeds

Ref.

Criteria

Requirements

Work Undertaken

DNV GL Findings

1aType ofbond

The bond must fall in one of
the following categories, as
defined by the Green Bond
Principles:•Green Use of Proceeds
Bond•Green Use of Proceeds
Revenue Bond•
Green Project Bond•
Green Securitized Bond

Documents reviewed:
Obayashi Green Bond
Framework
Amendment to Shelf
Registration Statement(draft)Discussions with Obayashi
management

The reviewed evidence confirms that the BOND falls in the category:
Green Use of Proceeds Bond.

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Ref.

Criteria

Requirements

Work Undertaken

DNV GL Findings

1b

Green
Project
Categories

The cornerstone of a Green
Bond is the utilization of theproceeds of the bond whichshould be appropriately
described in the legal
documentation for the
security.

Documents reviewed:
Obayashi Green Bond
Framework
Amendment to Shelf
Registration Statement(draft)Project documents(including asset
specifications)
Discussions with Obayashi
management

As identified by the purpose of the BOND is to use the proceeds to financeand refinance for projects falling under the following categories:<Renewable energy>-Refinance to the 3 Solar PV Projects• Ashikita• Kushirocho toritoushigenya• Hyugahichiya-Refinance to the 1 Wind Power Project (onshore)• Mitanehamada-Finance to the 1 Offshore wind power dedicated facilities• SEP building<Energy efficiency>-Refinance to Green building (commercial property)• oak kanda kaji-chou lease-office building
DNV GL’s assessment concluded that these assets would present a low
risk of CO2 emissions and relative to negative effect quantify and qualify
for inclusion under the Green Bond Principles within the Renewable Energy
category and Energy Efficiency category. Above information is included inlegal documents such as Amendment to Shelf Registration Statement.
DNV GL concluded that 1b requirement is satisfied.

1c

Environmen
tal benefits

All designated Green Project
categories should provide
clear environmentally
sustainable benefits, which,where feasible, will bequantified or assessed by theissuer.

Documents reviewed:
Obayashi Green Bond
Framework
Project documents(including asset
specifications)
Renewable energy CO2emission reduction
evaluation spread sheet
Discussions with Obayashi
management

DNV GL notes that solar PV and wind power project can present risks ofland use and ecology system through construction and operation. DNV GL
reviewed Obayashi’s provided document and confirmed that Obayashi
already identified the environmental risk and addressed appropriate
countermeasure. Obayashi has clearly demonstrated those projects willcontribute benefit for environment such as CO2 emission reduction.
DNV GL concluded that 1c requirement is satisfied.

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Ref.

Criteria

Requirements

Work Undertaken

1d

Refinancing
share

In the event that a
proportion of the proceeds
may be used for refinancing,
it is recommended thatissuers provide an estimateof the share of financing vs.
re-financing, and whereappropriate, also clarify
which investments or project
portfolios may be refinanced.

Documents reviewed:
Obayashi Green Bond
Framework
Discussions with
Amendment to Shelf
Registration Statement(draft)Obayashi management

DNV GL Findings

The proceeds of the BOND, in their entirety(10 billion JPY), will beallocated to green project. Refinance plan is as follows (approx.70% in
total amount of proceeds)-Refinance to the 3 Solar PV Projects : 3.5 billion JPY-Refinance to the 1 Wind Power Project (onshore): 0.5 billion JPY-Refinance to Green building (commercial property) : 3 billion JPY

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(2)
Ref.

2a

2b

Process for Project Selection and Evaluation

Criteria

Requirements

Work Undertaken

DNV GL Findings

規準

要求事項

評価作業(確認した項目)(DNV GL観察結果)

Investmentdecision
process

The issuer of a Green Bond should
outline the decision-making
process it follows to determine theeligibility 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
In addition to information
disclosed by an issuer on its Green
Bond process, criteria andassurances, Green Bond investors
may also take into consideration
the quality of the issuer’s overall
framework and performance
regarding environmental
sustainability.

Documents reviewed:
Obayashi Green Bond
Framework
Discussions with Obayashi
management including official
e-mail communication.

As per the Obayashi green bond frame work, the issuer has set out
the following criteria for project selection :“Eligible green project” means alignment with their corporate
philosophy and environmental policy including-Promote the renewable energy business-Promote environmentally responsible real estate development
projects
whose eligible criterial is stated in ‘Obayashi Green Vision 2050’. In
this green bond, Obayashi has decided eligible project overarchingit and considering the compliance with GBP 2018 as follows.
Those nominated projects and assets is discussed with Obayashi’s
related department and responsibilities (e.g. Financial department,
Environmental department, CSR committee representatives(representative director, President))
DNV GL concluded that 1c requirement is satisfied throughinterview, discussion and document review.
As per the interview and review documents provided by Obayashi,
DNV GL confirmed that Obayashi has addressed to achievesustainable society through its business based on the Obayashi
Green Vision 2050 established in 2011. Obayashi has published
OBAYASHI Corporate Report including its sustainable activities
described above.
Obayashi already owns more than 20 renewable power stations inJapan and contribute to achieve low carbon society

Issuer’s
environmen
tal andsocial andgovernanceframework-

Documents reviewed:
Obayashi Green Bond
Framework
Obayashi corporate
philosophy andenvironmental policy
Discussions with Obayashi
management
https://www.obayashi.co.jp/en/sustainability/environment.ht
mlhttps://www.obayashi.co.jp/renewable_energy/

https://www.obayashi.co.jp/en/sustainability/environment.html
https://www.obayashi.co.jp/renewable_energy/
DNV GL confirmed and found nothing to suggest that Obayashi’s
environmental activity is not in line with their activity to contributesustainable society through its green projectPage 26 of 27(3)

Management of proceeds

Criteria

Requirements

Work Undertaken

DNV GL Findings

規準

要求事項

評価作業(確認した項目)(DNV GL観察結果)

3a

Tracking
procedure-1

The net proceeds of Green Bonds
should be credited to a subaccount, moved to a subportfolio or otherwise tracked by
the issuer in an appropriatemanner and attested to by aformal internal process that will
be linked to the issuer’s lending
and investment operations forGreen Projects.

Documents reviewed:
Obayashi Green Bond Framework
Amendment to Shelf Registration
Statement (draft)
Obayashi’s internal protocol (e.g.
accounting management
procedure, document control
procedure)
Discussions with Obayashi
management

DNV GL reviewed documents and interviewed that Obayashiplans to trace the proceeds form the Bond, from the time ofissuance to the time of disbursement appropriately. The fullamount of the proceeds will be managed by Obayashi’s
financial department with existing accounting system andusing green bond request for approval document form.
DNV GL confirmed Obayashi internal process can manage andtrack the outstanding balance of the green bond proceeds.
DNV GL concluded that 3a requirement is satisfied.

3b

Tracking
procedure-2

So long as the Green Bonds areoutstanding, the balance of the
tracked proceeds should beperiodically reduced by amounts
matching eligible green
investments or loan
disbursements made during that
period.

Documents reviewed:
Obayashi Green Bond Framework
Obayashi’s internal protocol (e.g.
accounting management
procedure)
Discussions with Obayashi
management

DNV GL reviewed documents and interviewed that Obayashiplans to trace at the proceeds from the Bond, from the timeof issuance to the time or disbursement, and reduce the netbalance of proceeds by amounts in line with the projects andassets debt refinance schedule. At the end of each financial
period (at least every one quarter), the outstanding balanceof the Bond will be reviewed by Obayashi financial
department. DNV GL concluded that 3b requirement issatisfied.

3c

Temporaryholdings

Pending such investments or
disbursements to eligible Green
Projects, the issuer should makeknown to investors the intended
types of temporary investment
instruments for the balance of
unallocated proceeds.

Documents reviewed:
Obayashi Green Bond Framework
2(3),2(4)Amendment to Shelf Registration
Statement (draft)
Discussions with Obayashi
management

The net proceeds of the Bond will be placed in a existingaccounting system and managed by financial departmentusing request approval document form for green bondproceeds.
The net proceeds of the bond also will be fully and
immediately disbursed where possible or held in cash or cash
equivalent until disbursement to the nominated projects andassets as per the Obayashi green bond framework. DNV GL
concluded that 3c requirement is satisfied.

Ref.

Page 27 of 27

(4)

Ref.

4a

ReportingCriteria

Requirements

Work Undertaken

DNV GL Findings

規準

要求事項

評価作業(確認した項目)(DNV GL観察結果)

Periodical
reportingIn addition to reporting on the use of proceeds
and the temporary investment of unallocatedproceeds, issuers should provide at least
annually a list of projects to which Green Bond
proceeds have been allocated including- when possible with regards to confidentiality
and/or competitive considerations- a brief description of the projects and theamounts disbursed, as well as the expectedenvironmentally sustainable impact.

Documents reviewed:
Obayashi Green Bond Framework2(4)Environmental benefit evaluation
spread sheets (CO2 emission
reduction evaluation spread
sheet)
Discussions with Obayashi
management

Obayashi will publish the annual report
including a dedicated section on the green
bond in OBAYASHI Corporate Report andwebsite. This will include description of the
project and value of the proceeds invested, as
well as the associated qualitative andquantitative environmental impacts. Obayashiplans to report on the total amount of CO2
emission reduction evaluation based on theoperation records (e.g. amount of electricity
generation per year, MWh/y). DNV GL concluded that 4a requirement issatisfied.