October 2022

MEGMILK SNOW BRAND Co., Ltd.
Green Bond Framework
1. Introduction
MEGMILK SNOW BRAND Co., Ltd. (hereinafter the "Company") has developed the Green Bond
Framework (hereinafter the "Framework") based on the Group Long-term Vision 2026 and the"Megmilk Snow Brand Group Sustainability Policy".
The Framework has obtained a second opinion from Rating and Investment Information, Inc. (R&I),
an independent external reviewer, on its conformity with Green Bond Principles 2021 (ICMA) andGreen Bond Guidelines 2022 (Ministry of the Environment, Japan).
We will issue Green Bonds in accordance with the Framework.
1.1 Rational of Green Bond Issuance
Currently, the business environment surrounding our group is uncertain and challenging, withserious environmental issues such as global warming and rapid changes in social structure
beyond our expectations. Under such circumstances, our group is being asked for its raisond'etre and aspiration in society: "Why are we needed and for what purpose do we exist?”
We believe that the answer lies in the founding spirit of one of our predecessors, Snow Brand
Milk Products Co., Ltd. The phrase "Kendo Kenmin" (a healthy earth ensures human health)means "Dairy farming strengthens the soil, and the milk and dairy products produced from thisrich earth are the ultimate nutritious food that can foster healthy minds and resilient bodies forhuman being."
The social issue at the time of our founding was to realize stable and abundant dietary life inJapan, and our founders stood up to solve this issue through the business of dairy farming anddairy industry. Today, we believe that the raison d'etre and sprit of our group is to solve various
social issues of our time by providing value created throughout the value chain related to thedairy industry, and to constract a sustainable society that preserves a healthy and richenvironment and can be passed on to future generations.
Through the issuance of Green Bonds, we will actively communicate the spirit of "Kendo
Kenmin," which is the raison d'etre and spirit of our group, to all stakeholders, including bondinvestors, and engage in constructive dialogue to build an ongoing relationship of trust withstakeholders.
1.2 Overview of the Company
On October 1, 2009, Nippon Milk Community Co., Ltd. and Snow Brand Milk Products Co., Ltd.
merged to establish our company as a joint holding company, and on April 1, 2011, we absorbed
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Nippon Milk Community Co., Ltd and Snow Brand Milk Products Co.,Ltd. Our group not only
manufactures and sells products such as "Dairy products" and "Beverages and desserts," butalso develops businesses such as "Feedstuffs and seed" related to dairy farming production.
1.3 Corporate philosophy
Our corporate philosophy consists of our mission and our corporate slogan.
We strive to fulfill our three missions ("Focus on consumers", "Contribute to Dairy Farming
Production", "Put our hearts into milk") and create new value for milk in order to exist as acompany that contributes to society.
<Our missions>(1) Focus on Consumers
The Megmilk Snow Brand Group fully recognizes the importance of the concepts of consumer
rights and business responsibilities as outlined in the Basic Consumer Act. Determined to keep
our business operations consumer-focused, we are committed to:Providing safe and reliable products and services

Proactively disclosing information

Embracing consumers’ feedback and reflecting it in managementEstablishing a risk management system to rapidly and appropriately respond to
unexpected incidents.

(2) Contribute to Dairy Farming Production
The Megmilk Snow Brand Group is based on Japan’s dairy farming industry. As trusted partnersof dairy producers, we work to strengthen relationships and meet the expectations of producers
by conveying the value of milk. Further, by developing new demand for milk and dairy products,
we will strengthen the foundation of domestic dairy farming production and contribute to its
sustainable development.
(3) Put Our Hearts into Milk
The Megmilk Snow Brand Group believes there is vast potential for milk. By focusing on andremaining dedicated to milk, we will expand the potential and increase the value of milk, andpromote milk throughout the world.

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<Corporate slogan>

Make the Future with Milk

1.4 Group Long-term Vision 2026
In May 2017, the Megmilk Snow Brand Group announced its Group Long-term Vision 2026, which
outlines its 10 years plan for achieving sustainable growth. Based on our Corporate Philosophy,
the foundation of all our business activities, we titled our long-term vision, “Future Creation
Company with Milk,” and gave it a focus on three “futures”: the future of consumers, the future ofdairy farmers, and the future of employees. And we have shown our vision as the three concepts
of “Transformation & Renewal.”
The first is "Transformation (Business Portfolio Transformation)". To enable sustainable growth, wetransform our business portfolio to a new one in which we generate income through multiple
businesses. The second is "Renewal (Renewal of the Production Structure to Support Business
Growth)". By linking production structure renewal with business portfolio transformation, we adopt
new technology and restructure our production line composition to establish a highly efficient andcompetitive production line. The third is "Group Management (Promoting Group Management)".
We utilize maximally group management resources and the value chain to strengthen our Group’s
total power.
The "Group Long-term Vision 2026" is being promoted in three stages from FY2017 to FY2026.

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Positioning

First StageFY2017-FY2019

Second StageFY2020-FY2022

Third StageFY2023-FY2026

Begin Transformation

Accelerate Transformation

Toward Renewal

Start and promote Groupmanagement

Strengthen development ofGroup management

Accelerate and renew
Group management

Create multiple earnings
bases and maximize cash
Role

Establish Group earnings
bases

flow

Stable creation of
earnings through fourbusiness sectors

Begin renewal of

Begin full-fledged renewal

Accelerate production

production structureof the production structure

structure innovation

1.5 Megmilk Snow Brand Group Charter of Corporate Behavior
The Megmilk Snow Brand Group respects the letter and spirit of applicable laws and internationalrules at all stages of the supply chain, in accordance with the Megmilk Snow Brand Group
Charter of Corporate Behavior. We act honestly and in good faith, living up to high ethicalstandards.
1. Sustainably Improving Corporate Value and Resolving Social Issues
The Megmilk Snow Brand Group works to improve corporate value by engaging in businessactivities to achieve its Corporate Philosophy, while striving to help build a sustainable world byworking to solve social issues.
2. Trusting Relationship with Consumers
The Megmilk Snow Brand Group strives to ensure quality management and provide society
with effective and safe products and services. Based on Japan’s Basic Consumer Act, werecognize consumer rights and our responsibilities as a business operator, and we provide
accurate information on products and services and communicate in good faith to ensure
consumers’ satisfaction and earn their trust. In the event that an accident does occur with aproduct we have provided, we respond appropriately, with consumer safety as our top priority.
3. Equitable Business Activities
The Megmilk Snow Brand Group maintains a high sense of morals and responsibility, observes
corporate ethics, strives to ensure compliance throughout the Group, and carries out businessactivities based on fair, transparent and free competition. Moreover, we do not tolerate anytransactions or relationships with organized criminal groups or other anti-social forces.
4. Fair Information Disclosure and Dialogue with Stakeholders
The Megmilk Snow Brand Group proactively, effectively and appropriately discloses information
in a timely manner to earn the understanding and trust of all stakeholders, including
consumers, dairy producers and shareholders. In addition, we implement transparent
management by engaging in ongoing dialogue with stakeholders in order to raise corporate
value.

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5. Workstyle Reforms and Enhancement to Work Environment
The Megmilk Snow Brand Group approaches work in a way that raises employees’ skills andrespects personal attributes, diversity and individuality. Moreover, we build a corporate culturethat offers freedom and vitality and establish workplace environments that are motivating andtake health and safety into full consideration.
6. Initiatives on Environmental Issues
The Megmilk Snow Brand Group views environmental issues such as addressing climatechange, effectively using water resources and appropriately managing waste as shared issues
for humankind. We practice environmental conservation by working with everyone in the supply
chain to develop environmentally friendly technologies, products and services.
7. Respect for Human Rights
Throughout its supply chain, the Megmilk Snow Brand Group respects basic human rights,
bans discrimination on the basis of race, nationality, gender, religion, ideology or other suchcharacteristics, prohibits inequitable treatment such as forced labor, human trafficking and childlabor, and strives to provide safe, healthy work environments.
8. Thorough Crisis Management
The Megmilk Snow Brand Group has made thorough preparations for the possibility ofemergencies. In the event of emergencies such as fires, natural disasters and accidents, theGroup prioritizes human life and then strives to maintain, sustain and quickly restore its
business activities. We value the company’s assets and respectfully manage confidential
information, including personal information.
9. Partnerships with Local Communities
The Megmilk Snow Brand Group actively participates in society and promotes communication
at all of its business sites as a good corporate citizen. This helps to build ties of trust andcontributes to local community development.
10. Thorough Implementation of This CharterThose involved in the management of the Megmilk Snow Brand Group embrace as their own
role ensuring that the Group lives up to this Charter, taking the lead to ensure that it is fully
implemented by all Group companies. In addition, all involved in the supply chain areencouraged to take action based on this Charter.
1.6 Sustainability
1.6.1 Megmilk Snow Brand Group Sustainability Policy
All of us in the Megmilk Snow Brand Group pursue sustainability management as outlined below
in order to achieve sustainable growth together with society through our business activities, in linewith the Megmilk Snow Brand Group Charter of Corporate Behavior. This is intended to achieve
the Megmilk Snow Brand Group Corporate Philosophy.
1.

We identify material issues and designate specific targets, while also regularly disclosing thestatus of our initiatives.
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2.

The Group Sustainability Committee and Corporate Environment Meetings are regularly
convened to establish plans for initiatives related to sustainability management, confirm
progress with the KPIs, and pursue sustainability management on an ongoing basis by using
the PDCA cycle.

3.

Sustainability leaders are assigned to the Megmilk Snow Brand divisions and Group
companies, and sustainability Group activities in which all employees participate are held toensure thorough compliance and resolve material issues.

4.

In order to ensure compliance and resolve social issues for the future, and based on our
regret for the incidents caused by the Megmilk Snow Brand Group in the past, activities arecarried out with the participation of all employees twice yearly in which participants reaffirm
their responsibility in handling food and pledge to fulfill this responsibility.

5.

The Code of Conduct has been established within each Group company and efforts havebeen made to ensure familiarity with these standards in order to translate the Megmilk Snow
Brand Group Charter of Corporate Behavior into action.

1.6.2

Material Issues and KPIs

In order to improve the sustainability of society and our group, we have identified social issues thathave a high impact on society and our group's business, and established five material issues(materiality) and KPIs (key management indicators).
【Process for Identifying Material Issues】

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【Material Issues and KPI】
DomainFood and HealthMaterial Issues

Milk for Contributions to Food and HealthCore Activity Theme
Providing

Safe

KPI (Key Performance Indicator)

Products By fiscal 2022, 75% or more of the food facilities in and outside Japan that manufactureand Services

Megmilk Snow Brand products will be certified under an international food safety scheme(such as FSSC or SQF) recognized by GFSI, and thereafter continuing efforts will be madeto increase GFSI certifications (*1)
Train certified sensory evaluation technicians with the ability to evaluate flavor (number ofcertified sensory evaluation technicians: 110% or more compared to fiscal 2017 levels)(*2)

Contributing to Extending Carry out research and development, product development, service provision and
Healthy Life Expectancy

information transmission to contribute to the extension of healthy lives through milk (*2)
Carry out food education activities based on the key theme of contributing to the extensionof healthy lives and aim for an average of 45,000 participants every year in fiscal 20192026(*3)

DomainDairy Farming

Material Issues

Contributing to Sustainable Dairy FarmingCore Activity Theme

KPI (Key Performance Indicator)

Activities to Strengthen the Provide administrative and technical support for sustainable dairy farm management
Dairy Farming Production through operational support for Rakuseiken and the activities of the Research &Platform

Development Center for Dairy Farming (*2)
In order to promote self-sustaining feedstuff dairy farming, increase the area of land plantedwith Snow Brand Seed feedstuff seeds by fiscal 2030 by 3% compared to fiscal 2019
levels(*4)
DomainEnvironment

Material Issues

Reducing Environmental Impact

Core Activity Theme

KPI (Key Performance Indicator)

Preventing Global Warming Reduce CO2 emissions by 50% from the fiscal 2013 level by fiscal 2030(*5)
Sustainably
Resources

Using Make sure that all paper used is made of eco-friendly materials by fiscal 2022(*2)
Procure 100% certified palm oil by fiscal 2026(*2)
By fiscal 2030, develop and use environmentally friendly packaging containers and reduce
the use of petroleum-derived plastic (basic sales unit) by 25% compared to fiscal 2018 (*6)
Priority given to use of paper and biomass plastic containers(*2)
Encouragement of use of personal cups and bottles in office to reduce the amount of plastic
bottles used(*2)

Formation of a Recycling- Cut waste generation by 30% from the fiscal 2013 levels by fiscal 2030(*7)
based Society

Maintain the waste recycling rate at 98% or higher until fiscal 2030(*7)
Raise the food waste recycling rate to 95% or more by fiscal 2021 (*6)
Pursue eco-friendly product development (extend the expiration date on existing and new
products, and actively promote the labeling of the month and year for expiration dates)(*2)

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Reduce the amount of water by 9% used at manufacturing sites by 2030 (compared to fiscal
2013) (*2)
Confirm water risk at manufacturing sites and assess risk to business continuity every year.
(*7)
DomainPeople and Society

Material Issues

Realization of a Diverse and Motivating Workplace

Core Activity Theme

KPI (Key Performance Indicator)

Diversifying and Developing Increase the share of management positions held by women to 10% or more by fiscal
Human Resources

2025(*2)

Achieving Work-life Balance Maintain METI recognition under the Certified Health & Productivity Management
andImprovingLabor Outstanding Organizations Recognition Program every year (*2)

Productivity
Respect for Human Rights Conduct due diligence and awareness-raising activities on human rights based on the“Megmilk Snow Brand Group Human Rights Policy” to identify, prevent, and reduce humanrights risks in business activities(*2)
Material Issues

Contributing to Local Communities

Core Activity Theme
Partneringwith

KPI (Key Performance Indicator)

local Work with the community to help resolve social issues (*2)

communities［Scope］(*1) Megmilk Snow Brand / Ibaraku Co., Ltd. / Kohnan Oils and Fats Mfg. Co., Ltd. / Michinoku Milk Co., Ltd. /Yatsugatake Milk Industry Co., Ltd. / Bean Stalk Snow Co., Ltd. / Snow Brand Australia Pty. Ltd / PT.
Megmilk Snow Brand Indonesia / Kyodo Milk Industry Co., Ltd. / Luna Bussan / Miruku no Sato Co., Ltd.
(*2) Megmilk Snow Brand(*3) Megmilk Snow Brand / Bean Stalk Snow Co., Ltd.
(*4) Snow Brand Seed Co., Ltd.
(*5) Megmilk Snow Brand / Ibaraku Co., Ltd. / Kohnan Oils and Fats Mfg. Co., Ltd. / Chokuhan Haisou Co., Ltd. /Michinoku Milk Co., Ltd. / Yatsugatake Milk Industry Co., Ltd. / Snow Brand Seed Co., Ltd. / Bean Stalk SnowCo., Ltd.
(*6) Megmilk Snow Brand / Ibaraku Co., Ltd. / Yatsugatake Milk Industry Co., Ltd. / Bean Stalk Snow Co., Ltd.
(*7) Megmilk Snow Brand / Ibaraku Co., Ltd. / Kohnan Oils and Fats Mfg. Co., Ltd. / Michinoku Milk Co., Ltd. /Yatsugatake Milk Industry Co., Ltd. / Snow Brand Seed Co., Ltd. / Bean Stalk Snow Co., Ltd.

1.6.3 Sustainability Promotion Structure
In July 2022, the Group Sustainability Committee, chaired by the President of Megmilk Snow
Brand, was established to promote sustainability of the entire Group at the management level.
The Sustainability Promotion Department and Group Sustainability Committee confirm theprogress of KPIs for material issues, conduct discussions on achieving them, and report to theBoard of Directors. The Sustainability Promotion Subcommittee has been established under theGroup Sustainability Committee to examine specific measures to resolve material issues based8

on reports from the workgroups on decarbonization, plastic reduction, and human rights. In
addition, we promote understanding of the concept of sustainability among employees and otherspecific initiatives, including the sustainability Group activities which are led by sustainability
leaders assigned to each department and Group company of Megmilk Snow Brand.
In addition, to make use of the "outside perspective" in our sustainability management, we haveestablished the Corporate Ethics Committee, an advisory body to the Board of Directors,
consisting of outside experts, representatives of internal labor unions, and internal committee
members.

1.7 Environmental
1.7.1 Megmilk Snow Brand Group Environmental Policy
The Megmilk Snow Brand Group practices business activities centered on milk created in anatural environment and promotes coexistence with the global environment. To achieve this, wehave established the Megmilk Snow Brand Group’s Environmental Policy, in accordance with theGroup’s Charter of Corporate Behavior, and strive to effectively use sustainable resources.
1. Legal Compliance
Comply with environmental laws and ordinances as well as voluntary standards, and rapidly
9respond to legal revisions.
2. Environmental Consciousness
Effectively use limited resources, curb the emission of global warming gases and waste, andcontinue to recycle and reuse by identifying important material issues and achieving KPI.
3. Increase Environmental AwarenessPromote awareness of environmental conservation among all employees and proactively
promote environmental education.
4. Conserve Biodiversity
Conserve biodiversity and contribute to the creation of future society by using resources in asustainable way in business activities.
5. Disclosure of Environmental Information
Proactively disclose environmental information to promote transparent environmental
conservation activities.
1.7.2 Environmental Management Organization
The Company’s environmental management is carried out comprehensively via an environmental
management system (EMS) headed by the Managing Sustainability Director serving as theSupervising Environment Manager, with the President serving as the Chief Environment Officer.
By appointing an environmental management manager for each organization, the Company is
involving all employees and maintaining an environmental management system that complies
with ISO 14001: 2015*.
* International criteria for creating systems to address environmental conservation within an organization10

1.8 Participation in External Initiatives●The United Nations Global Compact
We have signed the United Nations Global Compact in June 2020 to realize a world in which
we “leave no one behind,” a goal touted in the SDGs, and a sustainable society. We pursue
sustainability for both society and the Company while working to implement the ten principles in
the four fields of human rights, labor, environment, and anti-coruption.
●TCFD; Task Force on Climate-related Financial Disclosures
On November 1st 2021, Megmilk Snow Brand endorsed the TCFD recommendations andjoined the TCFD Consortium.
Our group aims to achieve symbiosis between its business activities centering on milk, whichcomes from the bounty of nature, and the global environment, and has set forth "Initiatives on
Environmental Issues" in the Megmilk Snow Brand Group Charter of Corporate Behavior, andconsiders responses to climate change and environmental issues to be issues common to all
humankind.
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In addition, in Megmilk Snow Brand Group Environmental Policy, we positioned proactive
disclosure of environmental information as important, and based on this, we have decided towork on information disclosure in line with the TCFD's recommendations.
We will conduct climate change scenario analysis based on the TCFD recommendations andproactively disclose information on the impact of climate change on our business.
Each and every employee of our group is committed to conducting our business activities in anenvironmentally friendly manner, making effective use of limited resources, and contributing toa sustainable global environment.
●Membership in the Roundtable on Sustainable Palm Oil (RSPO)*
In support of the objective of developing a healthy palm oil industry, we joined the RSPO in July
2018 and have begun using certified oil in some of our products.
Our group will continue to work with its suppliers to create a sustainable society throughprocurement of palm oil and other raw materials in consideration of the environment and humanrights.
(*) The Roundtable on Sustainable Palm Oil is a non-profit organization called RSPO, which stands for"Roundtable on Sustainable Palm Oil". It was established to promote the sustainable production and use of palm
oil in consideration of the environment and human rights. It operates in cooperation with stakeholders in sevensectors related to the palm oil industry: palm oil production, oil milling and trading, consumer productmanufacturing, retail, banking and investment companies, environmental NGOs, and social and development
NGOs.

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2. Green Bond Framework
This framework has been developed in accordance with the following frameworkGreen Bond Principles 2021 (ICMA)Green Bond Guidelines 2022 (Ministry of the Environment, Japan)

2.1 Use of Proceeds
Proceeds in lieu of issuance of Green Bonds will be used for new expenditures or refinancing
related to projects that meet the following eligible criteria (Eligible Projects). In the case ofrefinancing, the funds will be used for expenditures related to capital expenditures made withinfour years prior to the date of issuance of the Green Bonds, or expenditures related to costs
incurred within one year.
2.1.1 Eligible Criteria
Eligible Projects Categories
No.

and Environmental Objects in

Eligible Criteria

SDGs

Materiality

Installation of facilities to convert

7. AFFORDABLE

Reducing

biomass by-products generatedAND

Environmental

Environmental Objects

in the process of recovering

ENERGY

Climate change mitigation

whey

13.

Green Bond Principles
Renewable Energy
1

Pollution

Prevention

andControl
2

Environmental Objects
Pollution

prevention

andwhey'susefulImpact

CLIMATE

components into methane gas

ACTION

Investment

in

11.

Reducing

treatment

facilities

SUSTAINABLE

Environmental

contribute to waste (sludge)

CITIES

Impactreduction

COMMUNITIES

wastewater
that

and

15.

control

AND

LIFE

ON

LIFE

ON

LAND

Sustainable Management of

Switch to environmental-friendly

15.

Living Natural Resources andraw materials and reduce use of

LAND

Land Usepetroleum-derived plastics


3

CLEAN

Switching to environmentalfriendly

Naturalpackaging such as forest-

Resource

Environmental
ImpactEnvironmental Objects
Conservation

Reducing

containersandcertified paper and productcardboard

Switching to certified palm oil

Switchingplastics

tobiomass

andlightweightpackaging materials

2.1.2 Negative environmental and social effects associated with green projects andresponses
In the NO.1 project, sludge is expected to increase due to the conversion of biomass to methane13

gas. However, we plan to install sludge drying equipment to dry the sludge and sell it as fertilizer.
2.1.3 Exclusion Criteria
Proceeds in lieu of issuance of Green Bonds will not be allocated to projects related toInappropriate relationships such as unfair transactions, bribery, corruption, extortion,embezzlement, etc. that do not comply with the laws and regulations of the country where
the project is locatedTransactions that could cause human rights, environmental, or other social problems

2.2 Process for Project Evaluation and Selection
The Finance Department will consult and select eligible projects that meet the eligibility criteriawith the Sustainability Promotion Department and related departments. The President will makethe final decision on the qualified projects selected for the issuance of Green Bonds.
2.3 Management of Proceeds
The Finance Department will manage the net proceeds of Green Bonds on an annual basis using
an internal management system until full allocation. Until the proceeds are allocated to eligible
projects, the proceeds will be held in cash or cash equivalents. We expect that the proceeds will
be applied within two years of the issuance.
2.4 Reporting
2.4.1 Allocation reporting
We will disclose the allocation of the proceeds of the Green Bonds on our website annually until
the proceeds have been fully allocated to Eligible Projects.
The items are the following;

The overview of each eligible projectThe amount of net proceeds allocated at eligible category levelThe amount of net proceeds pending allocation



The amount of refinancing

In the event of any material situation where an allocation plan has to be reconsidered after full
allocation, we will disclose such even in a timely manner.

142.4.2 Impact reporting
We will report on the project overview and the following indicators of each eligible project on our
website, to the extent practicable, until the net proceeds of the Green Bonds have beenredeemed.
No.
1
2
3

Eligible Green Projects Categories

Impact Metrics

Renewable Energy

Amount of CO2 emissions reduction (t-CO2)

Pollution Prevention and Control

Amount of sludge reduction (t)Sustainable Management of Living Natural
Resources and Land Use

Percentage of usage of eco-friendly raw
materials (%)
Reduction of petroleum-derived plastics (%)

2.5 External Review
We have obtained a second opinion from Rating and Investment Information, Inc. (R&I), an
independent external reviewer, on the conformity of the Framework with Green Bond Principles
2021 (ICMA) and Green Bond Guidelines 2022 (Ministry of the Environment, Japan).

Disclaimer:This document has been translated from a part of the Japanese original for reference purposes only.
In the event of any discrepancy between this translated document and the Japanese original, the original
shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any otherforms of damages arising from the translation.

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