Second-Party Opinion

Mori Building Co., Ltd.
Green Bond Framework

Evaluation Summary
Sustainalytics is of the opinion that the Mori Building Co., Ltd. Green Bond Framework
is credible and impactful and aligns with the four core components of the Green Bond
Principles 2021. This assessment is based on the following:
The eligible category for the use of proceeds –Green Buildings – is aligned with those recognized by the Green Bond
Principles. Sustainalytics considers that investments in green buildings
are expected to contribute to the transition to a low-carbon economy inJapan and advance the UN Sustainable Development Goals, specifically
SDGs 9 and 11.

Evaluation Date

July 20, 20221

Issuer Location

Tokyo, Japan

Report Sections
Introduction ............................................. 2
Sustainalytics’ Opinion ........................... 3
Appendices ............................................. 9Mori Building Co., Ltd’s Finance
Department and the Sustainability Committee will be responsible foroverseeing the evaluation and selection of eligible projects. The
President and CEO of Mori Building Co., Ltd will be in charge of final
allocation decisions. Mori Building Co., Ltd’s environmental and social
risk assessments and mitigation processes apply to all allocation
decisions made under the Framework. Sustainalytics considers the
project selection process in line with market practice .
Mori Building Co., Ltd’s Financedepartment will be responsible for the management and allocation ofproceeds to eligible green projects. The proceeds will be tracked using
an internal management system and the Company intends to achieve
full allocation within 24 months of issuance. Pending allocation,
unallocated proceeds will be held in cash or cash equivalents.
Sustainalytics considers this process to be in line with market practice.
Mori Building Co., Ltd intends to report on the allocation ofproceeds on its website annually until full allocation. Allocation
reporting will include information such as list of assets financed orrefinanced, the amount of net proceeds allocated, share of financing vsrefinancing, unallocated proceeds and scheduled allocation period on a
project-by-project basis. In addition, Mori Building Co., Ltd is committed
to reporting on relevant impact indicators to the extent practicable.
Sustainalytics views Mori Building Co., Ltd’s reporting system asaligned with market practice.

For inquiries, contact the Sustainable
Finance Solutions project team:Arnab Deb (Mumbai)
Project Manager
arnab.deb@sustainalytics.com
Keerthana Gopinath (Mumbai)
Project Support
Poorvi Vedak (Mumbai)
Project Support
Kosuke Kanematsu (Tokyo)
Project Support
Makiko Yamamoto (Tokyo)
Client Relations
susfinance.japan@sustainalytics.com(+81) 3 4520 2191

Alignment with Japan’s Green Bond Guidelines 2020
Sustainalytics is of the opinion that the Mori Building Co., Ltd. Green Bond Framework is in line with Japan’s Green Bond Guidelines 2020
(elements described with the word “should”) developed by the Ministry of the Environment of Japan.

1This document is an update of the second-party opinion for the Mori Building Co., Ltd. Green Bond Framework published in January 2019.

© Sustainalytics 2022

Second-Party Opinion

Mori Building Co., Ltd. Green Bond Framework

Introduction
Mori Building Co., Ltd. (“Mori Building” or the “Company”) is a property management company focusing on
urban redevelopment, town management and real estate leasing and management. Headquartered in Tokyo,
Japan, the Company has a workforce of over 1,500 employees as of June 2021.2
Mori Building has developed the Mori Building Co., Ltd. Green Bond Framework dated July 2022 (the“Framework”) under which it intends to issue green bonds and use the proceeds to finance or refinance, inwhole or in part, existing and future projects that are expected to facilitate a transition to a low-carbon
economy in Japan. The Framework defines eligibility criteria in one area:
1.

Green Buildings

Mori Building engaged Sustainalytics to review the Mori Building Co., Ltd. Green Bond Framework, dated July
2022, and provide a second-party opinion on the Framework’s environmental credentials and its alignment
with the Green Bond Principles 2021 (GBP)3 and Japan’s Green Bond Guidelines 2020. 4 The Framework has
been published in a separate document.5
Scope of work and limitations of Sustainalytics’ Second-Party Opinion
Sustainalytics’ Second-Party Opinion reflects Sustainalytics’ independent 6 opinion on the alignment of the
Framework with current market standards and the extent to which the eligible project categories are credible
and impactful.
As part of the Second-Party Opinion, Sustainalytics assessed the following:•••

The Framework’s alignment with the GBP as administered by ICMA and Japan’s Green Bond
Guidelines 2020;
The credibility and anticipated positive impacts of the use of proceeds; andThe alignment of the issuer’s sustainability strategy and performance and sustainability risk
management in relation to the use of proceeds.

For the use of proceeds assessment, Sustainalytics relied on its internal taxonomy, version 1.11.4, which isinformed by market practice and Sustainalytics’ expertise as an ESG research provider.
As part of this engagement, Sustainalytics held conversations with various members of Mori Building’s
management team to understand the sustainability impact of their business processes and planned use ofproceeds, as well as management of proceeds and reporting aspects of the Framework. Mori Building
representatives have confirmed (1) they understand it is the sole responsibility of Mori Building to ensure thatthe information provided is complete, accurate or up to date; (2) that they have provided Sustainalytics withall relevant information and (3) that any provided material information has been duly disclosed in a timely
manner. Sustainalytics also reviewed relevant public documents and non-public information.
This document contains Sustainalytics’ opinion of the Framework and should be read in conjunction with that
Framework.
Any update of the present Second-Party Opinion will be conducted according to the agreed engagement
conditions between Sustainalytics and Mori Building.
Sustainalytics’ Second-Party Opinion, while reflecting on the alignment of the Framework with market
standards, is no guarantee of alignment nor warrants any alignment with future versions of relevant market
standards. Furthermore, Sustainalytics’ Second-Party Opinion addresses the anticipated impacts of eligible
projects expected to be financed with bond proceeds but does not measure the actual impact. The
measurement and reporting of the impact achieved through projects financed under the Framework is the
2 Mori Building, “Company Profile”, at: https://www.mori.co.jp/en/company/profile.html
3 The Green Bond Principles are administered by the International Capital Market Association and are available at https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/.
4 Ministry of the Environment, Japan, “Green Bond Guidelines, 2020”, at: http://www.env.go.jp/policy/guidelines_set_version_with%20cover.pdf
5 The Mori Building Co., Ltd. Green Bond Framework is available on Mori Building Co., Ltd.’s website at:https://www.mori.co.jp/company/ir/greenbond.html
6 When operating multiple lines of business that serve a variety of client types, objective research is a cornerstone of Sustainalytics and ensuring analyst
independence is paramount to producing objective, actionable research. Sustainalytics has therefore put in place a robust conflict management
framework that specifically addresses the need for analyst independence, consistency of process, structural separation of commercial and research (andengagement) teams, data protection and systems separation. Last but not the least, analyst compensation is not directly tied to specific commercial
outcomes. One of Sustainalytics’ hallmarks is integrity, another is transparency.
2

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Mori Building Co., Ltd. Green Bond Framework
responsibility of the Framework owner. Upon twenty-four (24) months following the evaluation date set statedherein, Mori Building is encouraged to update the Framework, if necessary, and seek an update to the SecondParty Opinion to ensure ongoing alignment of the Framework with market standards and expectations.
In addition, the Second-Party Opinion opines on the potential allocation of proceeds but does not guarantee
the realised allocation of the bond proceeds towards eligible activities.
No information provided by Sustainalytics under the present Second-Party Opinion shall be considered as
being a statement, representation, warrant or argument, either in favour or against, the truthfulness, reliability
or completeness of any facts or statements and related surrounding circumstances that Mori Building has
made available to Sustainalytics for the purpose of this Second-Party Opinion.

Sustainalytics’ Opinion
Section 1: Sustainalytics’ Opinion on the Mori Building Co., Ltd. Green Bond
Framework
Sustainalytics is of the opinion that the Mori Building Co., Ltd. Green Bond Framework is credible andimpactful, and aligns with the four core components of the GBP. Sustainalytics highlights the following
elements of Mori Building’s Green Bond Framework:•

7

Use of Proceeds:- The eligible category – Green Buildings – is aligned with those recognized by the GBP.
Sustainalytics notes that the proceeds of the Framework are expected to contribute in thetransition to a low-carbon economy in Japan.
- Mori Building intends to finance or refinance new, existing or refurbished buildings that meet
one of the following eligibility criteria: (i) have obtained at least one of the following green
building certifications or recertifications within 24 months prior to the date of green bondissuance, (ii) are expected to obtain green building certifications or recertifications post
issuance, or (iii) have a construction completion date within 24 months prior to the date of green
bond issuance and have achieved at least one of the following green building certifications orrecertifications. Expenditures may include costs related to acquisition of land or buildings,
planning and development, construction (including the cost of acquisition of reserved floor),
refurbishment and operational management.7▪
The Framework defines the following green building certifications at the following
minimum levels as eligible: CASBEE (“A” or above), or CASBEE Certification for Real
Estate (“A” or above), 8 LEED Building Design and Construction or LEED Building
Operations and Maintenance (Gold or above),9 BELS (4 stars or above),10 DBJ Green
Building Certification (4 stars or above)11 and BCA Green Mark Certification (Gold Plusor above). 12 Sustainalytics views these certification schemes to be credible andimpactful and the selected levels as aligned with market practice. Mori Building has
communicated to Sustainalytics that it will limit allocation for refurbishments to thosethat result in achieving an eligible level of certification or achieving a step-up fromprevious level (prior to refurbished situation) under the aforementioned schemes. For
cases where Mori Building is recertifying refurbished buildings to the same level as
before, Sustainalytics encourages Mori Building to calculate energy improvement andreport on the impacts achieved.

Mori Building has confirmed to Sustainalytics that all expenditures are limited to certified green buildings only.

8 CASBEE: https://www.ibec.or.jp/CASBEE/english/
9 LEED: www.usgbc.org/LEED10 BELS: https://www.hyoukakyoukai.or.jp/bels/bels.html
11 DBJ: https://www.dbj.jp/en/service/program/g_building/
12

BCA Green Mark: https://www1.bca.gov.sg/buildsg/sustainability/green-mark-certification-scheme
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Mori Building Co., Ltd. Green Bond Framework
Mori Building has communicated to Sustainalytics that the Framework excludes
allocating proceeds to buildings intended for the extraction, storage, transport andproduction, development and refinement of fossil fuels.
Project Evaluation and Selection:- Mori Building’s Finance Department and the Sustainability Committee will be responsible foroverseeing the evaluation and selection of eligible projects. The President and CEO of theCompany will be in charge of final allocation decisions.
- Mori Building’s environmental and social risk assessments and mitigation processes apply to
all allocation decisions made under the Framework. The process is led by the Sustainability
Committee and its subordinate committees, the Environmental Promotion Committee and theCommittee on Human Rights and Societal Issues, overseen by the Board of Directors.
Sustainalytics considers these risk management systems to be adequate. For additional detail,please see Section 2.
- Based on the clear delineation of responsibility for project evaluation and selection and thepresence of risk management processes, Sustainalytics considers these processes to be in linewith market practice.
Management of Proceeds:- Mori Building’s Finance department will be responsible for the management and allocation ofproceeds to eligible projects. The proceeds will be tracked using an internal management
system.
- The Company intends to allocate all proceeds to eligible projects within 24 months following
the issuance date. Pending allocation, unallocated proceeds will be held in cash or cash
equivalents.
- Based on the presence of an internal tracking system, allocation timeframe and disclosure on
temporary allocation, Sustainalytics considers this process to be in line with market practice.
Reporting:- Mori Building intends to report on the allocation of proceeds to eligible projects on its website
annually until full allocation. Allocation reporting will include the list of assets financed orrefinanced, the amount of net proceeds allocated, share of financing vs refinancing, unallocatedproceeds, and scheduled allocation period on a project-by-project basis.
- In addition, the Company is committed to reporting on relevant impact metrics to the extent
practicable, such as name of the building and project, name and level of certification the eligible
projects have received, energy consumption, CO2 emissions, CO2 emissions of total floor area,
and water consumption.
- Based on the annual allocation and impact reporting commitment, Sustainalytics considers thisprocess to be in line with market practice.
▪

•

•

•

Alignment with Green Bond Principles 2021
Sustainalytics has determined that the Mori Building Co., Ltd. Green Bond Framework aligns with the four corecomponents of the GBP. For detailed information, please refer to Appendix 2: Green Bond/Green Bond
Programme External Review Form.
Alignment with Japan’s Green Bond Guidelines 2020
Sustainalytics is of the opinion that the Framework is in line with Japan’s Green Bond Guidelines 2020
developed by the Ministry of the Environment of Japan. The guidelines communicate what an issuer should
do to issue a credible green bond. Sustainalytics assessed the alignment between the Framework and theelements described with the word “should” outlined in the Japan’s Green Bond Guidelines 2020. For detailed
information, please refer to Appendix 1: Alignment with Japan’s Green Bond Guidelines 2020.

Section 2: Sustainability Strategy of Mori Building
Contribution of Framework to Mori Building’s sustainability strategy
In line with its mission “create cities, nurture cities”, Mori Building has demonstrated a commitment tosustainability with a focus on three key environmental areas: (i) promoting the harmonious co-existence of4Second-Party Opinion

Mori Building Co., Ltd. Green Bond Framework
cities and nature, (ii) zero-carbon cities, and (iii) resource recycling.13 Under zero-carbon cities, Mori Building
promotes the concept of a vertical garden city in its large-scale redevelopment projects. In terms of resource
recycling, Mori Building aims to achieve zero waste in all of its construction sites.
For its new constructions, the Company prioritizes nearly zero-energy buildings, zero energy houses, use ofhigh-efficiency equipment and aims to obtain green building certifications for its entire portfolio. For its
existing buildings, the Company adopts energy saving measures and is transitioning to renewable energy
across its entire portfolio. The Company has set targets of 50% reduction in scope 1 and 2 GHG emissions
from its business activities and a 30% reduction in scope 3 emissions by 2030, when compared to 2019, withthe aim of reaching net zero by 2050.14 Mori Building has been creating “ecological networks”15 in its project
areas to act as relay and rest site for living beings that travel among green spaces, in accordance with theTokyo Metropolitan Environmental Master Plan. To assess and improve greenery in its project areas, Mori
Building has been measuring the green coverage rate of its sites in urban areas since 2006 and targets toimprove it to 38% by 2030 from 36% in 2021.16 Presently, Mori Building is in the process of developing anenvironmental management system for the standardization of environmental practices and requirements on
health and safety, working conditions, energy consumption, water and waste management, and to mitigate
the adverse impact of its operations. The Company further substantiates its support for sustainability throughparticipation in international initiatives, such as the Carbon Disclosure Project, Taskforce on Climate related
Financial Disclosures and RE 100.17
Sustainalytics is of the opinion that the use of proceeds will further contribute to reducing the environmental
impact of properties owned or managed by Mori Building and is aligned with the Company’s overallsustainability strategy and initiatives.
Approach to managing environmental and social risks associated with the projects
Sustainalytics recognizes that the net proceeds from the bonds issued under the Framework will be directed
towards eligible projects that are expected to have positive environmental impact. However, Sustainalytics isaware that such eligible projects could also lead to negative environmental and social outcomes. Some key
environmental and social risks possibly associated with the eligible projects could include issues involving
occupational health and safety of workers, biodiversity loss, waste discharges such as emissions andeffluents, and consumption of energy and water associated with the development, construction and operationof green buildings. Sustainalytics is of the opinion that Mori Building can manage and mitigate potential risks
through implementation of the following:•Mori Building has established a Sustainability Committee for identifying, assessing, and managing
risks, including climate-related risks, human rights, and supply chain management of the projects
financed.

•

Regarding occupational health and safety, Japan’s Industrial Safety and Health Law mandates
evaluation of worker health and working environments to ensure appropriate health and safetymeasures are followed at construction sites.18 Mori Building regularly conducts safety inspections
in all its facilities to mitigate worker health and safety risks. All large-scale buildings with a total
floor space of more than 10,000 m2 are designed as per earthquake-resistant design standards
mandated by Japan’s Buildings Standards Law. 19 The Company also has earthquake-resistantfeatures and sensors in all its buildings. 20•

To manage the potential adverse impact of its large-scale construction projects on land use andbiodiversity, Mori Building conducts assessments to identify potential adverse environmental
impacts of the Company’s operations and targets to manage and conserve the natural resources
and biodiversity around its properties. Mori Building is a signatory to the” Biodiversity in Good
Company” initiative21 of the Convention on Biological Diversity, which aims to identify risks and

13 Mori Building, “Environmental Policies “, at: https://www.mori.co.jp/en/environment/principles/policy.html
14 Mori Building, “Mori Building Fixes Greenhouse Gas Emission Medium & Long Term Targets Aims to Reach Net-Zero Emission by 2050”, (2022), at:https://www.mori.co.jp/en/company/press/release/2022/05/20220523130000004336.html
15 Mori Building, “Creating Bases for Ecological Networks “, at: https://www.mori.co.jp/en/environment/urban_nature/network.html
16 Mori Building, “Improving the Green Coverage Rate “, at: https://www.mori.co.jp/en/environment/urban_nature/coverage.html
17 Ibid.
18
International Labour Organization, “Industrial Safety and Health Law”, (2008), at:https://www.ilo.org/dyn/natlex/docs/ELECTRONIC/27779/61989/F332577679/JPN27779.pdf
19 Mori Building, “Safety and Security “, at: https://www.mori.co.jp/en/urban_design/safety.html
20 Mori Building, “Mori Building Comprehensive Earthquake Protection”, (2019), at: https://www.mori.co.jp/en/urban_design/img/safety_pamphlet.pdfv
21 Convention on Biological Diversity, “Biodiversity in Good Company”, at: https://www.business-andbiodiversity.de/fileadmin/user_upload/documents/Die_Initiative/Zentrale_Dokumente/eng_Leadership_Commitment_2019.pdf
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Mori Building Co., Ltd. Green Bond Framework
challenges threatening biodiversity, encourages companies to monitor and protect biologicaldiversity while also ensuring its sustainable utilization.
•

In order to reduce water consumption in its properties, Mori Building installs water saving fixturesin all its new buildings and treats rainwater and greywater for reuse.22 In order to reduce and recycle
waste, the Company has adopted a waste management plan, maintains waste management reports
in all its new construction sites and complies with Japan’s Waste Management and Public
Cleansing Act which mandates appropriate sorting, storage, collection, transport, recycling anddisposal of waste in all construction sites.23•

As part of the Tokyo Metropolitan Environmental Impact Assessment Code, all large-scale
development projects in Tokyo are obliged to conduct an environmental risk assessment toevaluate the negative environmental impacts associated with the project. The Code mandates
surveys during project execution and after completion to check if appropriate environmental
considerations were followed, including consultation with local communities and all otherstakeholders.24•

Mori Building complies with the Tokyo Metropolitan Government’s System of Building Environment
Plan (Green Building Program) which requires all new construction projects to submit their energy
conservation performance measures.25 Mori Building also follows Japan’s Act on the Rational Useof Energy for efficient energy use in the development, construction and operation of its buildings. 26•

Mori Building carries out its operations in Japan, which is recognized as Designated Country under
the Equator Principles, indicating the presence of robust environmental and social governance,
legislation systems and institutional capacity to mitigate the environmental and social risk
associated with projects financed under the Framework. 27

Based on these policies, standards and assessments, Sustainalytics is of the opinion that Mori Building has
implemented adequate measures and is well positioned to manage and mitigate environmental and social
risks commonly associated with the eligible categories.

Section 3: Impact of Use of Proceeds
The use of proceeds category is aligned with those recognized by the GBP. Sustainalytics focuses below on
where the impact is specifically relevant in the local context.
Importance of green buildings for reducing CO2 emissions in JapanThe building sector was responsible for approximately 36% of global energy use and 40% of global energy
related CO2 emissions in 2020, according to the UN Environment Programme.28 In Japan, the building sector
was responsible for 30% of CO2 emissions in 2019 with final energy consumption by buildings having
increased by 20% in 2019 when compared to 1990.29,30 In its NDC submitted in 2021, Japan committed toincrease its GHG emissions reduction target from 26% to 46% of the 2013 level and to achieve net zero
emissions by 2050, including a target for reducing CO2 emissions from residential, commercial and otherbuildings by 60% by 2030.31
Given the significant contribution of buildings in the country’s total CO 2 emissions, the Japanese governmenthas been working to strengthen energy saving measures in buildings. Japan’s Building Energy Efficiency Act
22 Mori Building, “Effective Use of Water Resources “, at: https://www.mori.co.jp/en/environment/resource_circulation/water.html
23 Japan’s Ministry of the Environment, “Waste Management and Public Cleansing Act”, (2019), at: https://ippta.co/wp-

content/uploads/2020/12/Japan_Waste-management-and-public-cleansing-Act.pdf
24 Tokyo Metropolitan Government, “Environmental Impact Assessment”, (2018), at:https://www.kankyo.metro.tokyo.lg.jp/en/greenery/assessments.html
25 Tokyo Metropolitan Government, “Green Building Program”, (2018), at: https://www.kankyo.metro.tokyo.lg.jp/en/climate/build.html
26 IEA, “Act on the rational use of energy (Energy Efficiency Act)”, (2017), at: https://www.iea.org/policies/573-act-on-the-rational-use-of-energy-energyefficiency-act
27 Equator Principles, “Designated Countries”, at: https://equator-principles.com/about-the-equator-principles/designated-countries/
28 Global Alliance for Buildings and Construction, “Global status report for buildings and construction”, (2021) at:
https://globalabc.org/sites/default/files/2021-10/GABC_Buildings-GSR-2021_BOOK.pdf
29
Ministry of the Environment, “Greenhouse Gas Emissions in Fiscal Year 2019 (Final Figures) (Japanese only)”, at:https://www.env.go.jp/press/files/jp/116118.pdf
30 Ministry of Land, Infrastructure, Transport and Tourism, “Overview of the Act on the Improvement of Energy Consumption Performance of Buildings”,
at: http://www.mlit.go.jp/common/001134876.pdf
31 “Japan’s Nationally Determined Contribution (NDC)”, (2021), at:https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Japan%20First/JAPAN_FIRST%20NDC%20(UPDATED%20SUBMISSION).pdf
6Second-Party Opinion

Mori Building Co., Ltd. Green Bond Frameworkof 2015 sets mandatory energy efficiency standards for large-scale non-residential buildings (2,000 m2 ormore).32 In 2019, the Act was amended also mandating compliance with the energy efficiency standards for
medium-size non-residential buildings (300 m2 or more).33 The 2022 amendment of the Act mandates new
construction of both non-residential and residential, irrespective of the size, after 2025 to reach the zeroenergy building or zero energy house level. 34 These measures are expected to reduce building energy
consumption by 8.89 million kL (kilolitres of fuel oil equivalent), which means approximately 100 TWh(terawatt-hours), by 2030 from 2013 levels.35 Green buildings are significant contributors to energy savingwith Japan having multiple certification programs promoting green buildings, such as, the BELS Certification
Program, the CASBEE Certification Program and DBJ Green Building Certification Program. These programs
assess energy-saving performance, resource conservation including reduction in water use and waste, use ofrecycled resources, as well as consideration for the surrounding ecosystem. 36,37,38
Based on the above, Sustainalytics is of the opinion that financing of green buildings under the Framework is
expected to create positive environmental impact while supporting the Japan’s goals for reducing GHG
emissions and increasing energy efficiency in buildings.
Alignment with/contribution to SDGs
The Sustainable Development Goals were adopted in September 2015 by the United Nations General
Assembly and form part of an agenda for achieving sustainable development by the year 2030. The bonds
issued under the Mori Building Co., Ltd. Green Bond Framework are expected to help advance the following
SDG and target:
Use of Proceeds
Category

SDG

9. Industry, innovation andinfrastructure
Green Buildings

11. Sustainable Cities andCommunities

SDG target
9.4 By 2030, upgrade infrastructure andretrofit industries to make them sustainable,with increased resource-use efficiency andgreater adoption of clean andenvironmentally sound technologies andindustrial processes, with all countries taking
action in accordance with their respective
capabilities.
11.6 By 2030, reduce the adverse per capita
environmental impact of cities, including by
paying special attention to air quality andmunicipal and other waste management

Conclusion
Mori Building has developed the Mori Building Co., Ltd. Green Bond Framework under which it may issue green
bonds and use the proceeds to finance green buildings. Sustainalytics considers that the projects funded by
the green bond proceeds are expected to contribute to the transition to a low-carbon economy in Japan.
The Mori Building Co., Ltd. Green Bond Framework outlines processes for tracking, allocating, and managing
proceeds and makes commitments for the Company to report on the allocation and impact of the use ofproceeds. Furthermore, Sustainalytics believes that the Mori Building Co., Ltd. Green Bond Framework isaligned with the overall sustainability strategy of the Company and that the green use of proceeds category
is expected to contribute to the advancement of the UN Sustainable Development Goals 9 and 11. Additionally,

32 Ministry of Land, Infrastructure, Transport and Tourism, “Overview of the Act on the Improvement of Energy Consumption Performance of Buildings”,(2016), at: http://www.mlit.go.jp/common/001134876.pdf
33 IEA, “Japan’s Roadmap to Carbon Neutrality in the Building and Housing Sectors”, (2021), at: https://iea.blob.core.windows.net/assets/993f67a2054e-41ba-9adb-f782358a4e73/3.JapansRoadmaptoCarbonNeutralityintheBuildingandHousingSectors.pdf
34
Rethink Tokyo, ‘Energy conservation architecture to be mandatory for Japan real estate from 2025’, at:https://www.rethinktokyo.com/news/2022/04/25/energy-conservation-architecture-be-mandatory-japan-real-estate-2025/1650839788
35 Ibid.
36 CASBEE: https://www.ibec.or.jp/CASBEE/english/
37 BELS: https://www.hyoukakyoukai.or.jp/bels/bels.html
38
DBJ: https://www.dbj.jp/en/service/program/g_building/7

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Mori Building Co., Ltd. Green Bond Framework
Sustainalytics is of the opinion that Mori Building has adequate measures to identify, manage and mitigate
environmental and social risks commonly associated with the eligible projects funded by the proceeds.
Based on the above, Sustainalytics is confident that Mori Building is well positioned to issue green bonds andthat the Mori Building Co., Ltd. Green Bond Framework is robust, transparent and in alignment with the four
core components of the Green Bond Principles 2021.

8

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Appendices
Appendix 1: Alignment with Japan’s Green Bond Guidelines 2020
Four elements

Alignment

Sustainalytics’ comments

1. Use of Proceeds

Yes

The use of proceeds category defined by Mori Building in the
Framework, Green Building, is recognized in Japan’s Green Bond
Guidelines 2020 as a project category with clear environmental
benefits. The Company also provides, in the Framework,
explanations about its measures to manage and mitigate
environmental risks associated with the eligible projects,
allowing investors to access in advance. In addition, theCompany has confirmed that it will disclose the asset’s age andremaining useful life and the amount to be refinanced as at thetime of the bond issuance, in cases when refinancing an asset
that needs to be maintained for a long period of time throughissuing multiple green bonds.

2. Process for ProjectEvaluation
andSelection

Yes

In the Framework, the Company explains environmental goals
that it aims to achieve through the issuance of green bonds. It
also describes, in the Framework, the eligibility criteria and theprocess for assessing and selecting eligible projects.

3. Management
Proceeds

Yes

In the Framework, the Company explains that, until the maturityof green bonds, its Finance Department will track and manage
the amounts of allocated and unallocated proceeds on abiannual basis, using an internal management system. The
Company intends to complete the allocation of proceeds within
24 months after the issuance of green bond. Pending allocation,
unallocated proceeds will be managed in cash or cash
equivalents.

Yes

In the Framework, Mori Building explains that it will provide
allocation reporting and impact reporting annually. Allocation
reporting will be disclosed until the full allocation of proceeds
and on a timely basis in case of material developments
thereafter. It will include a list of assets financed/refinanced, theamounts allocated to eligible projects on a project basis, shareof financing vs refinancing and the amount and the expected
timing of allocation of unallocated proceeds. Impact Reporting
will be disclosed until the maturity of green bond and include thename of buildings and projects, name and level of certifications
the eligible project received, amount of energy consumption,
CO2 emissions, CO2 emissions of total floor area and water
consumption.

4. Reportingof9Second-Party Opinion

Mori Building Co., Ltd. Green Bond Framework
Appendix 2: Green Bond / Green Bond Programme - External Review Form
Section 1. Basic Information
Issuer name:Mori Building Co., Ltd.

Green Bond ISIN or Issuer Green Bond Framework
Name, if applicable:Mori Building Co., Ltd. Green Bond Framework

Review provider’s name:

Sustainalytics

Completion date of this form:

July 20, 2022

Publication date of review publication:

January 2019

Original publication date:

Section 2. Review overview
SCOPE OF REVIEWThe following may be used or adapted, where appropriate, to summarise the scope of the review.
The review assessed the following elements and confirmed their alignment with the GBP:☒

Use of Proceeds☒

Process for Project Evaluation and
Selection☒

Management of Proceeds☒

Reporting

ROLE(S) OF REVIEW PROVIDER☒

Consultancy (incl. 2nd opinion)☐

Certification☐

Verification☐

Rating☐Other (please specify):
Note: In case of multiple reviews / different providers, please provide separate forms for each review.

EXECUTIVE SUMMARY OF REVIEW and/or LINK TO FULL REVIEW (if applicable)
Please refer to Evaluation Summary above.

Section 3. Detailed review
Reviewers are encouraged to provide the information below to the extent possible and use the comment
section to explain the scope of their review.

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Mori Building Co., Ltd. Green Bond Framework
1. USE OF PROCEEDS
Overall comment on section (if applicable):
The eligible category for the use of proceeds – Green Buildings – is aligned with those recognized by theGreen Bond Principles. Sustainalytics considers that investments in green buildings are expected tocontribute to the transition to a low-carbon economy in Japan and advance the UN Sustainable Development
Goals, specifically SDGs 9 and 11.
Use of proceeds categories as per GBP:☐

Renewable energy☐

Energy efficiency☐

Pollution prevention and control☐

Environmentally sustainable management ofliving natural resources and land use☐

Terrestrial and aquatic biodiversity
conservation☐

Clean transportation☐

Sustainable water and wastewater
management☐

Climate change adaptation☐

Eco-efficient and/or circular economy
adapted products, production technologies
and processes☒

Green buildings☐

Unknown at issuance but currently expected
to conform with GBP categories, or othereligible areas not yet stated in GBP☐

Other (please specify):

If applicable please specify the environmental taxonomy, if other than GBP:

2. PROCESS FOR PROJECT EVALUATION AND SELECTION
Overall comment on section (if applicable):
Mori Building Co., Ltd’s Finance Department and the Sustainability Committee will be responsible foroverseeing the evaluation and selection of eligible projects. The President and CEO of Mori Building Co., Ltdwill be in charge of final allocation decisions. Mori Building Co., Ltd’s environmental and social risk
assessments and mitigation processes apply to all allocation decisions made under the Framework.
Sustainalytics considers the project selection process in line with market practice .
Evaluation and selection☒

Credentials on the issuer’s environmental
sustainability objectives☒

Documented process to determine thatprojects fit within defined categories☒

Defined and transparent criteria for projects
eligible for Green Bond proceeds☒

Documented process to identify andmanage potential ESG risks associatedwith the project☒

Summary criteria for project evaluation andselection publicly available☐

Other (please specify):

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Information on Responsibilities and Accountability☒

Evaluation / Selection criteria subject toexternal advice or verification☐

Other (please specify):☐

In-house assessment

3. MANAGEMENT OF PROCEEDS
Overall comment on section (if applicable):
Mori Building Co., Ltd’s Finance department will be responsible for the management and allocation ofproceeds to eligible green projects. The proceeds will be tracked using an internal management system andthe Company intends to achieve full allocation within 24 months of issuance. Pending allocation, unallocatedproceeds will be held in cash or cash equivalents. Sustainalytics considers this process to be in line withmarket practice.
Tracking of proceeds:☒

Green Bond proceeds segregated or tracked by the issuer in an appropriate manner☒Disclosure of intended types of temporary investment instruments for unallocatedproceeds☐

Other (please specify):

Additional disclosure:☐

Allocations to future investments only☒

Allocations to both existing and future
investments☐

Allocation to individual disbursements☐

Allocation to a portfolio of
disbursements☐

Disclosure of portfolio balance of
unallocated proceeds☐

Other (please specify):

4. REPORTING
Overall comment on section (if applicable):
Mori Building Co., Ltd intends to report on the allocation of proceeds on its website annually until full
allocation. Allocation reporting will include information such as list of assets financed or refinanced, theamount of net proceeds allocated, share of financing vs refinancing, unallocated proceeds and scheduled
allocation period on a project-by-project basis. In addition, Mori Building Co., Ltd is committed to reporting on
relevant impact indicators to the extent practicable. Sustainalytics views Mori Building Co., Ltd’s reporting
system as aligned with market practiceUse of proceeds reporting:☒

Project-by-project☐

On a project portfolio basis☐

Linkage to individual bond(s)☐Other (please specify):

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Information reported:☒

Allocated amounts☒

Other (please specify): list of☐Green Bond financed share of total
investment☐

Semi-annual

assets financed or refinanced,
share of financing vs refinancing,
the amount of unallocatedproceeds, and scheduled
allocation period on a project-byproject basis

Frequency:☒

Annual☐Other (please specify):

Impact reporting:☒

Project-by-project☐

On a project portfolio basis☐

Linkage to individual bond(s)☐Other (please specify):

Information reported (expected or ex-post):☒

GHG Emissions / Savings☐

Energy Savings☒

Decrease in water use☒

Other ESG indicators (please
specify): name of building
and project, name and levelof certification the eligible
projects have received,energy consumption, CO2
emissions, and CO2
emissions of total floor area☐

Semi-annual

Frequency☒

Annual☐Other (please specify):

Means of Disclosure☐

Information published in financial report☐

Information published in sustainability
report☐Information published in ad hoc
documents☒

Other (please specify): Mori Building’s
website☐Reporting reviewed (if yes, please specify which parts of the reporting are subject toexternal review):

Where appropriate, please specify name and date of publication in the useful links section.
USEFUL LINKS (e.g. to review provider methodology or credentials, to issuer’s documentation, etc.)

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SPECIFY OTHER EXTERNAL REVIEWS AVAILABLE, IF APPROPRIATE
Type(s) of Review provided:☐

Consultancy (incl. 2nd opinion)☐

Certification☐

Verification / Audit☐

Rating☐Other (please specify):

Review provider(s):Date of publication:

ABOUT ROLE(S) OF INDEPENDENT REVIEW PROVIDERS AS DEFINED BY THE GBPi.

Second-Party Opinion: An institution with environmental expertise, that is independent from the issuer may
issue a Second-Party Opinion. The institution should be independent from the issuer’s adviser for its Green
Bond framework, or appropriate procedures, such as information barriers, will have been implemented within
the institution to ensure the independence of the Second-Party Opinion. It normally entails an assessment of
the alignment with the Green Bond Principles. In particular, it can include an assessment of the issuer’s
overarching objectives, strategy, policy and/or processes relating to environmental sustainability, and anevaluation of the environmental features of the type of projects intended for the Use of Proceeds.

ii.

Verification: An issuer can obtain independent verification against a designated set of criteria, typicallypertaining to business processes and/or environmental criteria. Verification may focus on alignment withinternal or external standards or claims made by the issuer. Also, evaluation of the environmentally
sustainable features of underlying assets may be termed verification and may reference external criteria.
Assurance or attestation regarding an issuer’s internal tracking method for use of proceeds, allocation offunds from Green Bond proceeds, statement of environmental impact or alignment of reporting with the GBP,
may also be termed verification.

iii.

Certification: An issuer can have its Green Bond or associated Green Bond framework or Use of Proceeds
certified against a recognised external green standard or label. A standard or label defines specific criteria,
and alignment with such criteria is normally tested by qualified, accredited third parties, which may verify
consistency with the certification criteria.

iv.

Green Bond Scoring/Rating: An issuer can have its Green Bond, associated Green Bond framework or a key
feature such as Use of Proceeds evaluated or assessed by qualified third parties, such as specialised research
providers or rating agencies, according to an established scoring/rating methodology. The output may include
a focus on environmental performance data, the process relative to the GBP, or another benchmark, such as
a 2-degree climate change scenario. Such scoring/rating is distinct from credit ratings, which may
nonetheless reflect material environmental risks.

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About Sustainalytics, a Morningstar Company
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