Sustainable Finance Framework
Mori Building Co., Ltd.

June, 2024

contents
1. Sustainability Initiatives ������������������������������ 2
1.1. Reference to Principles and Guidelines �������������������� 2
1.2. Overview of the Company��������������������������� 2
1.3. Philosophy of Urban Development ���������������������� 3
1.4. Decarbonized Cities ������������������������������ 4
1.4.1. Medium & Long Term Targets for Net-Zero Emission ���������� 4
1.4.2. Initiatives for Achieving Net-Zero Emission ��������������� 5
1.5. Harmonious Coexistence of Cities and Nature ����������������� 5
1.5.1. Initiatives and Targets on Harmonious Coexistence of Cities and Nature� 6
1.6. Sustainability Management System ���������������������� 6
1.6.1. Biodiversity Conservation Promotion System �������������� 7
1.7. Participation in External Initiatives・Obtaining External Certification������ 8
1.8. Rationale for Sustainable Finance Execution������������������ 9
2. Green Finance Framework����������������������������� 10
2.1. Use of Proceeds �������������������������������� 10
2.2. Project Evaluation and Selection Process�������������������� 11
2.3. Management of Proceeds ��������������������������� 11
2.4. Reporting ����������������������������������� 12
2.4.1. Allocation Reporting �������������������������� 12
2.4.2. Impact Reporting ���������������������������� 12
2.5. External Review �������������������������������� 12
2.5.1. Post-issuance external review���������������������� 12
3. Sustainability-Linked Finance Framework ��������������������� 13
3.1. Selection of KPIs�������������������������������� 13
3.2. Calibration of Sustainability Performance Target (SPTs) ������������ 14
3.3. Bond/Loan Characteristics��������������������������� 15
3.4. Reporting ����������������������������������� 16
3.5. Verification ���������������������������������� 16-1-

1. Sustainability Initiatives
Mori Building Co., Ltd. (hereinafter, "Mori Building") has established a Sustainable Finance Framework(hereinafter, "this framework") in order to further raise awareness among a wide range of stakeholdersof its consistent commitment to urban developments since its establishment and its contribution to
the realizing sustainable society including the global environment, urban environment, and local
communities through its businesses.
Based on this framework, Mori Building will execute the following Sustainable Finances.
• Green Finance• Sustainability-Linked Finance1.1. Reference to Principles and Guidelines
This framework will communicate in a transparent manner on the key elements and core components
recommended by the following principles and guidelines.
• ICMA1 Green Bond Principles 2021
• ICMA Sustainability-Linked Bond Principles 2023
• Ministry of the Environment, Green Bond and Sustainability-Linked Bond Guidelines 2022
• Ministry of the Environment, Green Loan and Sustainability-Linked Loan Guidelines 2022
• LMA2 ,APLMA3 ,LSTA4 Green Loan Principles 2023
• LMA, APLMA, LSTA Sustainability-Linked Loan Principles 2023
Mori Building has obtained a Second Party Opinion from Japan Credit Rating Agency, Ltd., an
independent external reviewer regarding the alignment of this framework with the Principles andGuidelines stated above.

1.2. Overview of the Company
Mori Building is a general developer company established in Japan in 1959, following the foundationof its predecessor, Mori Fudosan, in 1955. Since the establishment, its core business has been theleasing and management of office buildings primarily in Tokyo's Minato Ward, but it began to diversify
its business around 1975, entering the commercial facilities market with the opening of Laforet
Harajuku in 1978. After the completion of ARK Hills in 1986, Mori Building has promoted complex
urban redevelopment projects involving office, residential, commercial, cultural facilities, etc. It has also
entered the overseas market since 1994.
In recent years, with the opening of Roppongi Hills, Mori Building has expanded into the cultural,
hotel, and urban development consulting businesses, while building leasing remains its core business.
Mori Building aims to create a rich urban lifestyle and to further develop Tokyo as an international city.

1

ICMA：International Capital Market Association
LMA：Loan Market Association
3
APLMA：Asia Pacific Loan Market Association
4
LSTA：Loan Syndications and Trading Association
2-2-

1.3. Philosophy of Urban Development
Under the philosophy of "Create Cities, Nurture Cities," Mori Building is engaged in businesses that
contribute to the realization of a sustainable society, the development of local communities, and thesafety, health, and happiness of people, with three key themes: "Environment and Greenery," "Safety andSecurity," and "Culture and Art."
In "Environment and Greenery," Mori Building contributes to the realization of a more sustainable
society leading to the future by promoting our environmental policies of "harmonious coexistence of
cities and nature," "decarbonized cities," and "resource recycling" through urban development which isidealized as Vertical Garden City, and its operation.
In order to promote the above, Mori Building is working on "Regulatory Compliance and Environmental
Management," "Environmental Information Disclosure," and "Environmental Education and Awarenessraising Activities."
In "Safety and Security," based on the concept of "cities to escape to, rather than flee from in times ofdisaster," we have implemented hardware measures such as the introduction of the highest level of antiseismic performance in our main buildings and the independent power supply from our own energy
plant, as exemplified by Roppongi Hills. In addition, we have implemented both hardware and software
measures, such as periodic earthquake preparedness training for all employees and the establishment ofseveral staff housing units for disaster readiness in our business areas to prepare a system (approximately
240 disaster response personnel) that can respond in case of an emergency. We have introduced asystem in which employees themselves act as human sensors to identify near-misses during normal
times through support crew activities in which they participate, and we have been continuously
implementing this system. With the Safety Office permanently in place, we also have a system in place topromote safety and security initiatives.
In "Culture and Art," Mori Building has "Suntory Hall," which opened in Ark Hills in 1986, "Mori Art
Museum," which opened in 2003 as a symbol of the cultural heart of Tokyo, Roppongi Hills, and recently,"TOKYO NODE," which opened in Toranomon Hills Station Tower in 2023, "Mori Building Digital Art
Museum: Epson teamLab Borderless," which will relocate from Odaiba to Azabudai Hills, has createda new magnetic field and magnetic force that will become the core of the city. By not only holding
exhibitions and learning programs at the Mori Art Museum but also actively organizing the "Roppongi
Art Night" art event throughout the town of Roppongi and installing public art on the grounds of major
projects, we are promoting activities based on the concept of "Art + Life" and working to realize a richsociety where more people can enjoy art and culture close at hand.
Our urban development has a strong public nature in that it promotes urban redevelopment incooperation with the local community to create a favorable urban environment and solve local issues.
The completion of a new city through redevelopment is also the beginning of the nurturing of a city.
Through the town management system and activities that we have uniquely created, we are evolving
and developing local communities while responding to changing times, evolving technology, and everchanging local issues and user needs. Through a series of such initiatives, we focus on making cities andcity-based activities sustainable.

-3-

Vertical Garden City
The Vertical Garden City concept proposed by Mori Building refers to compact urban complexes
in which functions for work, residence, recreation, commerce, education and relaxation are highly
integrated within walking distances. By aggregating subdivided small plots of land into a large
floor plate and build high-rise buildings, the ground level can be freed up for wide-open green
spaces to nurture the environment. This not only fosters urban nature and achieves living where
people can experience the four seasons, but also mitigates the heat island phenomenon bycovering ground surface and rooftops with greenery. The aggregation of diverse urban functions
also brings about a leveling of energy demand, enhancing energy efficiency. A compact citywhere work and residence are in close proximity greatly reduces the time and energy required forcommuting to work or school and it also has positive effects on resource recycling and efficiency
of distribution. Moreover, making high-level use of urban centers in this form aids in the protectionof nature in suburbs. The Vertical Garden City is a new urban model that aims for the harmonious
coexistence of cities and nature while constraining impact on the global environment.

1.4. Decarbonized Cities
1.4.1. Medium & Long Term Targets for Net-Zero Emission
Under its commitment to help realize a decarbonized society, Mori Building has set group targets to
reduce Scope 1 and 2 greenhouse gas emissions from business activities in its consolidated group by
50% in fiscal 2030 (compared to fiscal 2019) , and by 30% for Scope 3, aiming to reach net-zero emissions
by fiscal 2050.
Mori Building group's
CO2 emissions in FY2019

Medium term = SBTi targets

Total 684,000 tons
95,000 tons
(14%)
Scope 1（gas &
heat）

Scope 3（indirect）

Scope 2（electricity）

Scope
1&2

▲ 50%

Net zero

Scope
1&2

161,000
tons (24%)▲ 30%
Scope 3428,000
tons (62%)
FY 2019（base）Net zero

Scope 3

FY 2030（medium term）

FY 2050（long term）

1.4.2. Initiatives for Achieving Net-Zero Emission
Based on the Vertical Garden City concept, Mori Building has been working on urban decarbonization
through large-scale urban redevelopment projects, introducing high-efficiency equipment in new
projects, and extensive energy saving measures at existing properties before setting medium and longterm targets.

-4-

Mori Building has established a structure to achieve its medium and long term targets and disclosed
information on our website. In Scope 1 and 2, we will further strengthen our efforts by adding newmeasures and measures that reinforce our existing measures. In addition, as for Scope 3, Mori Building
will identify and reduce emissions during the construction in cooperation with supply-chain companies.

Measures to reduce Scope 1 and 2
Measure ① Environmental performance of new buildings under ZEB or ZEH and acquisition ofenvironmental certifications
Measure ② E stablishment of next-generation energy network
Measure ③ R enewable-energy electricity in existing buildings
Measure ④ F acilities for a stable supply of renewable energy

1.5. Harmonious Coexistence of Cities and Nature• Recognition and Policy on Harmonious Coexistence of Cities and Nature
Since the Meiji Restoration of 1868, the modernization of Tokyo led to construction of not only
infrastructure as capital functions, but government offices and related facilities, offices, residences, andretail facilities, and a large part of forest zone and greenery have been deforested. In addition, during thehigh-growth period of the mid 1950s to the early 1970s, various artificial structures and buildings wereconstructed one after another and the ground surface of the cities was covered with asphalt or concretealong with the rapid population concentration in Tokyo and the development of civil engineering andconstruction technology. At the same time, a decrease in greenery, varieties and breeds of animals andplants with urban sprawl, and urban issues, such as the heat island phenomenon, have occurred.
For solving these urban issues, the Mori Building group will create the downsized nature withconsideration for biodiversity and harmonious coexistence of urban cities and humans, on the groundsurface and rooftops by vertically using the city through the idealized city model of Vertical Garden City.
Along with various urban activities, we will produce a space with abundant greenery where you can hear
the birds singing and insects buzzing. The space will be used for fostering a community of people.

• Biodiversity Conservation
It is thought that biodiversity existing in cities provide a variety of benefits to people living in cities.
The Mori Building group recognizes the importance of understanding how human urbanization impacts
ecosystems.
The Mori Building group aims to realize the urban environment in consideration with a relationshipbetween cities and nature. We design and build the Ecological Networks 5 in accordance with anadministrative biodiversity-related plan, and in our development area, we will proceed to prepare thegreenery as stopovers or habitats for many species so that they can frequently visit during their travel
between large greeneries nearby. After the preparation of the greenery, we will undertake required
periodic checks and preventive measures as well as establish a management system for biodiversity
conservation.

5

Ecological Networks: There is a need to create conditions under which living things can live easily, allowing movement by linking
green areas that form the living bases for creatures with small-scale green areas and roadside trees. Such a network of habitats isreferred to as an ecological network (extracted from Biodiversity and Greening Guide, Minato City)-5-

1.5.1. Initiatives and Targets on Harmonious Coexistence of Cities and Nature
Mori Building measures green coverage ratios every year, primarily in its large-scale mixed-use
development area, and aims to achieve approximately 38% as a KPI by 2030. As an indicator of
biodiversity, we regularly conduct research on flying species (birds and butterflies) which visit green
areas that take biodiversity into consideration, and we will use this to contribute to maintaining a
biodiversity friendly environment.
With regard to greening-related certifications, we will deliberate in acquiring appropriate certifications
for each development area, primarily for large-scale mixed-use development areas of more than 1 ha(including those in operation), and will strive to continue to maintain the certifications we have acquired.
Mori Building voluntarily implements preservation of trees and undertakes research in rare species inneed as well as promotes business activities in accordance with environmental laws and regulations,while engaging with external parties, such as administration, from our development phase. In addition,
we report those growing conditions and transplant trees when required.
Regarding the greenery that is given more consideration for biodiversity in cities, we will obtainappropriate certifications. For measuring effectiveness of the greenery functions, we have continuously
been monitoring the level of mitigation of the heat island phenomenon, of increase in greenery, and of
the appearance of birds before and after our business activities through checkups with thermal images(ThermoMap), green coverage ratio and bird monitoring.

1.6. Sustainability Management System
Mori Building recognizes that the promotion of sustainability initiatives is a material matter related tothe execution of our business operations, and has therefore established the Sustainability Committee,
chaired by the President and CEO, and its subordinate committees, the Environmental Promotion
Committee and the Committee on Human Rights and Societal Issues.
The Sustainability Committee deliberates on important sustainability-related issues such as climatechange, human rights, and supply chain management and supervises and monitors subordinate
committees. Specific activities and studies are carried out mainly by the Sustainability Promotion
Committee Secretariat, which was established under the Committee and is headed by the executive
officer in charge. In addition, the Board of Directors receives reports from the Sustainability Committee
regularly and manages and supervises important matters through discussion by the Board of Directors.
The Environmental Promotion Committee, chaired by the director in charge of the Environment
Promotion Department, is held once a quarter.

The Committee promotes and manages cross-sectional

efforts to address various environmental issues, including climate change, and reports regularly to the
Sustainability Committee. The Sustainability Committee discusses essential matters such as formulating
policies to address climate-related risks and opportunities and establishing greenhouse gas (GHG)
emissions targets. The Environmental Promotion Committee is responsible for reporting and discussing
important matters and implementing approved policies and plans, including identifying, assessing, andmanaging risks and opportunities.
The Committee on Human Rights and Societal Issues, chaired by the director in charge of the Human
Resources Department, promotes and manages human rights and supply chain management initiatives
and reports regularly to the Sustainability Committee. The Committee also publishes the Mori Building
Group Human Rights Policy and the Mori Building Group Sustainable Procurement Guidelines to clarify
its policies on human rights and supply chain management initiatives.

-6-

Board of Directors
Sustainability Committee
Chairperson: President and CEO

Environmental Promotion
Committee

Committee on Human Rights
and Societal Issues

Head: Director in charge ofEnvironmental Promotion Department

Head: Director in charge of
Human Resources Department

1.6.1. Biodiversity Conservation Promotion System
In terms of the greenery that is given more consideration for biodiversity, we have established amanagement system in cooperation with planting management companies, tree protection andnurturing advisors (arborists), and Mori Building (Building Management Department, Architectural
Design Department, Environmental Promotion Unit). In the system, the relevant parties regularly share
the greenery status through patrolling management and regular meetings where identified issues
are promptly examined, coordinated, and addressed. We will report and submit considerations toEnvironmental Promotion Committee and implement appropriate green management when required.

Environmental Promotion Committee

Biodiversity-friendly green-space management system
Main Tasks ｜Main Tasks ｜Main Tasks ｜Exterior design-related
correspondence of target areas

Maintenance and management ofvegetation in target areas

Greening certification and environmentrelated correspondence of target areas

Mori Building

Mori Building

Mori Building

Architectural Design
Department

Building Management
Department

Environmental Promotion
Unit

Collaboration
as needed

Continuous
collaboration

Collaboration
as needed

Planting
managementcompanies

Main Tasks ｜Planting andmaintenancework in target
areas

Tree protection
and nurturingadvisors (arborists)-7-

Main Tasks ｜Patrolling management for planting
and observation and supervision ofplanting and maintenance work intarget areas1.7. Participation in External Initiatives・Obtaining External Certification• SBTi Certification
The Mori Building group has quantitatively recognized and published the results of CO 2 from Mori
Building-owned real estate. In 2022, the group established the targets of reducing CO2 by 50% in Scope
1 + 2, and by 30% in Scope 3 by FY 2030 (compared to FY 2019). These targets are in line with the Paris
Agreement, and were certified by the SBT initiative in 2022 as science-based targets at the 1.5°C level.

• RE100 Membership
The Mori Building group is a member of RE100, a global initiative of companies that aim to procure
100% of the electricity used in their business activities from renewable energy. Our goal is to achieve
this by 2030.

• CDP
In implementing the SBT initiative, we have tallied CO2 emissions from all real estate Mori Building
group owned and managed. Going forward, we will tally the quantitative CO2 emissions annually andpublish the data on our website as well as report it to CDP. And in FY2022, we were selected as the
Supplier Engagement Leader, the highest rating in the Supplier Engagement Rating Introduction, andwill continue to work with suppliers to reduce GHG emissions and climate change risks.

• Japan Climate Leaders' Partnership (JCLP) Membership
The Mori Building group is a member of the Japan Climate Leaders' Partnership (JCLP), a coalition ofJapanese companies and organizations aiming to achieve the 1.5°C target by promptly transitioning to
a decarbonized society to avert a climate crisis.

• Task Force on Climate-related Financial Disclosures (TCFD)
The Mori Building group makes recommendations to the Task Force on Climate-related Financial
Disclosures (TCFD) which in turn recommends companies and other organizations to recognize climatechange-related risks and opportunities, and incorporates them into their management strategies aswell as disclose them. Disclosure under the TCFD has been made on our website since November
2022.

• Certification for Health Management and Diversity
Mori Building promotes health management, regarding the health management of employees andothers as a management strategy, so that each employee can work enthusiastically and healthily, bothmentally and physically. Mori Building has been certified as a "Health & Productivity Management
Outstanding Organization 2023 (White 500)" for its excellent health management practices, based on
its efforts to address local health issues and the health promotion initiatives promoted by the Nippon
Kenko Kaigi. Also, from the Minister of Health, Labor and Welfare, Mori Building received a 2-Star
Eruboshi Certification as a company that has been shown to excel in promoting women's activities
and received the "Kurumin Certification" as a company that supports a good balance between workand childcare. Going forward, Mori Building will continue working to create an environment that
accommodates diverse an environment that accommodates diverse lifestyles and a work environmentthat takes work balance into consideration.

-8-1.8. Rationale for Sustainable Finance Execution
Mori Building has executed Sustainable Finances in order to further raise awareness among a wide
range of stakeholders of its consistent commitment to urban developments since its establishment andits contribution to realizing sustainable society including the global environment, urban environment,
and local communities through its businesses. Using the funds raised through this sustainable finance,
Mori Building, in line with its philosophy“Create Cities, Nurture Cities,”is committed to pursuing
harmonious coexistence between cities and nature, zero-carbon cities, and resource recycling in order tohelp realize a more sustainable society.

-9-2. Green Finance Framework

.ye
tio
cs

2.1. Use of Proceeds
Mori Building will use the proceeds of the green finances (green bonds / green loans) for new
investment and/or refinance projects that meet the following eligible criteria (the eligible projects).
When refinancing renewable energy projects, it is limited to expenditures made within 36 months
prior to the execution of green finances.

Project Category
Green Buildings

Eligible Criteria• Expenditures or investments in new and/or existing

9. Industry,buildings that meet one of the following (i) to ( ⅲ ) (costs

Innovation andrelated to acquisition of land or buildings, planning andInfrastructuredevelopment, construction (including the cost of acquisition

11. Sustainable Cities

of reserved floor), refurbishment and operationaland Communities

management, research and development expenses, etc.)• Investments in an SPC that owns and/or plans toacquire buildings that meet one of the following (i) to( ⅲ ) (including anonymous partnership investment.)i.

have received at least one of the following third-party
green building certifications or recertifications within
24 months prior to the date of green bond issuanceii. are expected to receive certifications or recertifications
post-issuanceiii. have a construction completion date within 24
months prior to the date of green bond issuanceand have achieved at least one of the following
certifications or recertifications
Third party certification- A or S Rank under the Comprehensive Assessment
System for Built Environment Efficiency (CASBEE)
Certification for Buildings (New Construction,
Existing Buildings, and Renovation) or CASBEE
Certification for Real Estate6- Gold Rank or Platinum under the LEED BD+C
(Building Design and Construction) (v4.0 andlater) or LEED O+M (Building Operations andMaintenance) (v4.0 and later)- The following levels in the Building Energyefficiency Labeling System (BELS) (FY2024 standard)• Non-residential: 4 to 6 Levels• Residential with renewable energy facilities:
3 to 6 Levels
6

SDGs

Excluding CASBEE issued by local municipalities-10-Project Category
Green Buildings

Eligible Criteria• Residential without renewable energy facilities:

SDGs
9. Industry,Innovation and

3 or 4 Levels- 4 or 5 Levels under the Building Energy-efficiency
Labeling System (BELS) (FY 2016 standard)- 4 or 5 Stars under DBJ Green Building Certification

Infrastructure
11. Sustainable Cities
and Communities- Gold Plus or Platinum Rank under the BCA GreenMark Certification
Renewable Energy• Procurement of electricity derived from renewableenergy (solar, wind)

3. Good Health andWell-being• Expenditures related to the installation or acquisitionof renewable energy (solar, wind) equipment (costs
related to acquisition of land or equipment, planning

7. Affordable andClean Energy
9. Industry,and development, construction, research andInnovation, anddevelopment expenses, etc.)

Infrastructure• Investments in an SPC that owns and/or acquire

13. Climate Action

renewable energy (solar, wind power) equipment(including anonymous partnership investment)
Mori Building will continuously recertify third-party green building certifications for its assets after their
expiration by sustaining and improving assets' environmental performance through maintenance andrefurbishment.

2.2. Project Evaluation and Selection Process
Mori Building set the eligible criteria to select projects which will contribute to its mission, "Environment
and Greenery." The net proceeds of the green finances will be allocated to projects which meet theeligible criteria (the eligible projects).
The Finance Department and the Sustainability Committee will be charged with project selection inaccordance with the eligibility criteria. Selection of eligible projects is approved by a corporate officerof the Finance Department and the Sustainability Committee, and the final decision is made by the
President and CEO of the company.
While selecting projects, Mori Building confirms that all projects address the following requirements to
reduce environmental and social risks.

• Compliance with all applicable laws, regulations and ordinances, including Environmental Impact
Assessment, the Law on the Improvement of Energy Consumption Performance of Buildings and the
System of Building Environment Plan

• As necessary for project implementation, information provision to residents and hearing of residents
and related municipalities' opinions

2.3. Management of Proceeds
Mori Building's Finance Department will manage the allocation of the net proceeds of green finances
on a biannual basis, using the internal management system until the maturity of the green finance.

-11-Mori Building will manage the proceeds in the form of cash or cash equivalents while pending their
allocation to eligible projects.

2.4. Reporting
2.4.1. Allocation Reporting
Mori Building will annually disclose the following contents on our website (or report them to thelender in the case of loans) until the proceeds have been fully allocated to projects which meet theeligible criteria.
Mori Building will report timely in the event of a significant change, etc., after full allocation of theproceeds.

• List of projects with new investments or refinanced• Amount of proceeds allocated to each project• Amount of unallocated proceeds and scheduled allocation period• Share of new investments vs. refinancing

2.4.2. Impact Reporting
Mori Building will disclose the following indicators to the extent practicable until the maturity of thegreen finance. This reporting will be disclosed annually on our website (or we report them to the lenderin the case of loans).

Project
Green Buildings

Impact Reporting Indicators• Overview of the projects (Name of the building and project)• Name and level of certifications the eligible project received• Energy consumption• CO2 emissions• CO2 emissions of total floor area
• Water consumption

Procurement of electricity derived from

• Renewable energy procurement

renewable energy (solar, wind)• CO2 emission reduction

Installation or acquisition of renewable• Overview of the projects (Power plant, name of SPC, etc.)

energy (solar, wind) equipment• Installation status of renewable energy facilities

Investments in an SPC that owns and/or• Amount of electricity generated by renewable energy

acquires renewable energy (solar, wind
power) equipment (including anonymous

facilities• CO2 emission reduction amountpartnership investment)

2.5. External Review
2.5.1. Post-issuance external review
Until the funds procured based on this framework are at least fully allocated to eligible projects, Mori
Building intends to obtain reviews from an independent external organization on the status of reporting,including the allocation of proceeds and the disclosure of indicators related to environmental benefits

-12-

.
3.
Sustainability-Linked Finance Framework

3.1. Selection of KPIs
The following KPI will be used for Sustainability-Linked Finances (Sustainability-Linked Bonds /Sustainability-Linked Loans) executed under this framework.
If there is a change in the scope of KPIs aggregation, the latest aggregation scope will be posted on
our website at the time of reporting.

KPIs
KPI-1

GHG emission reduction rate in Scope 1 and 2

KPI-2

Renewable energy consumption rate

KPI-3

Green coverage ratio in large-scale mixed-use development areas

KPI-4

CDP evaluation (climate change)• KPI-1: GHG emission reduction rate in Scope 1 and 2
Definition
A calculation of the reduction rate from FY2019 based on the total GHG emissions of Scope 1 and
2, calculated in accordance with the GHG Protocol, covering Mori Building and its consolidated
subsidiaries.
Track record

Total GHG emissions in Scope 1 and 2(t-CO2)
GHG emission reduction rate in Scope 1
and 2(%) (Base year: FY2019)

FY2019FY2020

FY2021

FY2022

255,983

240,527

219,806

207,185

Base year

6.0%

14.1%

19.1%

• KPI-2: Renewable energy consumption rate
Definition
Percentage of electricity consumption by the Company and its consolidated subsidiaries that is
generated from renewable energy sources.
Track record

FY2019FY2020

FY2021

FY2022

Electricity consumption (MWh)391,259

371,537

378,781339,311Amount of renewable electricity (MWh)

5,049

7,497

9,114

61,486

Renewable energy consumption rate (%)

1.3%

2.0%

2.4%

18.1%

-13-

• KPI-3: Green coverage ratio in large-scale mixed-use development areas
Definition
Measure green coverage in major large-scale mixed-use development areas7.
Green cover ratio (= green area / site area x 100%): In accordance with the Tokyo Metropolitan
Government Municipal Green Coverage Ratio Manual, we use aerial photographs as the basis forcalculations.
Track record

FY2019FY2020

FY2021

FY2022Overall green coverage ratio (%)

―

37.3

37.1

37.9

Total green coverage area (ha)

―

9.6

9.5

10.0

Surveyed areas (quantity)

―

10

10

11

• KPI-4: CDP evaluation (climate change)
Definition
Scores related to climate change as evaluated by CDP※ When assumptions related to the CDP score change and the KPI change, the latest information will
be posted on our website.
Track record

FY2020

FY2021

FY2022――A-

CDP evaluation (climate change)

3.2. Calibration of Sustainability Performance Target (SPTs)
Sustainability-Linked Finances executed under this framework will have one of the following SPTs.
The SPTs to be used, the date of determination of the SPTs, and the score of the applicable SPTs will beidentified in the statutory disclosure documents (for bonds) or contract documents (for loans) (hereinafterin this chapter referred to as statutory disclosure documents, etc.) at the time of each financing execution.

SPTs
GHG emission reduction rate in Scope 1 and Scope 2 consistent with thefollowing targets (Base year: FY 2019)
SPT-1• ▲ 50% by FY 2030
• Net-zero by FY 2050
The reduction rate for each year shall meet the annual reduction rate requiredby the SBT 1.5°C standard target.

7

SPT-2

100% renewable energy ratio by FY2030

SPT-3

38% green coverage in large-scale mixed-use development areas by FY2030

SPT-4

Obtained an A- or better rating in CDP (Climate Change)

ARK Hills, ARK Hills Sengokuyama Mori Tower, ARK Hills South Tower, Atago Green Hills, Motoazabu Hills, Holland Hills,
Omotesando Hills, Roppongi Hills, Toranomon Hills Mori Tower, and Toranomon Hills Business Tower (Completed by 2021 as to all
aforementioned); Toranomon Hills Residential Tower (Completed in 2022); Toranomon Hills Station Tower (Completed in 2023); andAzabudai Hills (Completed in 2023)-14-

3.3. Bond/Loan Characteristics
The characteristics of Sustainability- Linked Finance bonds/loans executed under this framework willchange depending on the achievement status of SPTs. The details of the changes will be specified in thestatutory disclosure documents, etc., at the time of each financing, including (1) "step up/step down ininterest rate," (2) "Donations," or (3) Purchasing "emission credits or certifications."
Even if Mori Building changes the SPT after the Sustainability-Linked Finance is executed, the SPT for
the Sustainability-Linked Finance that has already been executed will not be changed. However, in thesituation of an event that may have a significant impact on the assumptions used in measuring the
KPI, setting the SPT, or the scope of the KPI (M&A activities, significant changes in regulatory or otherinstitutional aspects, or the occurrence of unusual events, etc.), we may revise the Sustainability-Linked
Finance SPT that we have already executed. The details of the review will be disclosed on our website (orwe report them to the lender in the case of loans).

(1) Step Up/Step Down Interest Rates
In the case of step up
Suppose a third-party verified report stating that the SPTs have been achieved is not received by thedetermination date. In that case, the interest rate will step up at the annual rate specified at the timeof financing from the interest payment for the interest period beginning after the Determination Dateuntil the redemption/repayment date (or if otherwise specified in the statutory disclosure documents,
etc., by the due date).
In the case of step down
Suppose a third-party verified report stating that the SPTs have been achieved is received by thedetermination date. In that case, the interest rate will step down at the annual rate specified at the timeof financing from the interest payment for the interest period beginning after the Determination Dateuntil the redemption/repayment date (or if otherwise specified in the statutory disclosure documents,
etc., by the due date).

(2) Donations
Suppose a third-party verified report stating that the SPTs have been achieved is not received by thedetermination date. In that case, donations in an amount corresponding to the percentage specified in
the statutory disclosure documents will be made to qualified donation recipients by the reimbursement/
repayment date. Qualified donation recipients are public interest incorporated associations, public
interest foundations, general foundations, international organizations, local government-certified nonprofit organizations, local governments, national and public university corporations, school corporations,research institutions, and similar organizations related to the improvement of SPTs that have not beenachieved. The recipients of the donations will be determined with the necessary approvals prior to thereimbursement/repayment date.

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(3) Purchasing emission credits or certifications
Suppose a third-party verified report stating that the SPTs have been achieved is not received by thedetermination date. In that case, we will purchase emission credits (credits of CO2 reduction value) or
certifications (Green Power Certificates, Non-Fossil Certificates, I-REC, etc.) in an amount corresponding
to the percentage specified in the above statutory disclosure documents by the reimbursement/
repayment date.
The emission credits or certificates to be purchased will be determined with the necessary approvals
prior to the reimbursement/repayment date.
In the event of a force majeure event (a change in trading system regulations, etc.) that prevents
us from purchasing emission credits or certifications, we will make a donation to qualified donation
recipients.

3.4. Reporting
Mori Building will report on the following items. The reporting period is the fiscal year preceding
the fiscal year to which the reporting date belongs. The contents of the report will be disclosed on our
website (or we report them to the lender in the case of loans).

No.

Information to be Reported

1

Performance of the KPIs

2

Performance against the SPTs

3

Reporting Frequency
Annually until the final determination
dates, starting from the fiscal year
following the year of issuance ofUp-to-date information of Sustainability strategies

each Sustainability-Linked Financerelative to the KPIs and SPTs
• If SPTs have not been reached and "donations" are made,Timelythe amount and recipients of the do-nations.
4• If SPTs have not been reached and "purchasing emission
credits or certifications" are made, the amount and thename of the emission credits or certifications.

3.5. Verification
The performance of each KPI against the SPT is verified by an independent third party on an annual
basis until a decision date is reached. The results of the verification will be disclosed on our website (orwe report them to the lender in the case of loans).

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