Sustainability Bond Framework
NEC Capital Solutions Limited

NEC Capital Solutions Limited Sustainability Bond Framework
Introduction
NEC Capital Solutions Limited (hereinafter the “Company”) was founded in 1978 as a sales financing company
for NEC products. Since then, we have expanded the scope of our business as a financial service provider bydeveloping a full range of financial products to address our customers’ business challenges, in addition toleases for ICT and other equipment. Additionally, we are working with our customers, which include many
government agencies and local governments, to promote the development of social infrastructure.
We are pushing forward to realize management based on the concept of CSV (Creating Shared Value), whichseeks to increase “social value” and create “economic value” while achieving sustainable growth, by providing
services that only we are capable of offering, through the use of our unique characteristics based on thecombination of being a financial services company and having the “NEC” DNA. Now, through the formulationof this Sustainability Bond Framework, we will diversify our means of raising funds, while also contributing tosolving social issues, such as establishing social and ICT infrastructure, revitalizing local communities andeconomies, preventing global warming, and responding to the aging population.

1. Corporate Philosophy and Group Vision
As a financial services company of the NEC Group, we provide solutions for various kinds of issues regarding
the managerial resources (capital) of our customers. Our Corporate Philosophy and Group Vision are as follows.

◼

Corporate Philosophy

Helping Societies Advance Through “Capital Solutions*1”
The Company aims to be a best partner worthy of our customers’ trust, where all employees have a clear
understanding of their respective mission, values, and vision based on our Corporate Philosophy.

◼

Group Vision

To be a global solution service company that aims to enhance social value with customers
We formulated our Group Vision in October 2013. This Group Vision represents a common direction that theNEC Capital Solutions Group will aim at over the next 10 years, and puts into words our vision for the Company.
We understand that the external and internal environments surrounding the Company are constantly changing,but we hope this Group Vision will act as a linchpin for the Company as we engage in unshakeable businessdevelopment, capable of withstanding any changes.
In this Group Vision, we have set forth our direction, in which we will target management based on the conceptof CSV, i.e., the creation of social value through our businesses themselves, as well as the creation of economic
value required of us as a company. In recent years, companies have become required to create social valuethat contributes to achieving a more abundant society if they are to continue existing on a stable basis. At NEC
Capital Solutions, we also place the idea of management based on the concept of CSV at the core of our actions
as we clarify the vision we want to achieve in 10 years and aim for sustainable growth.
*1 Capital Solutions: The Company’s term referring to the provision of solutions for a wide range of issues related tocustomers’ managerial resources (“Capital”).

© NEC Capital Solutions Limited 2022

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2. Medium-Term Plan 2020◼

Summary of Strategies in the Medium-Term Plan 2020

The NEC Capital Solutions Group positions its strengths as its “strategic partnership with NEC,” “broad rangeof financial solutions,” and “wealth of ICT knowledge,” centered on the “services” DNA of the Company, which
was founded as the sales financing company of NEC. Over the three years starting in fiscal 2020, we havefurther evolved the initiatives we implemented over the course of two medium-term plans, the “Medium-TermPlan 2014” and the “Medium-Term Plan 2017,” and we are working to “Expand core areas” and “Harvest newbusiness” as we look to realize our Group Vision. Our “Medium-Term Plan 2020” consists of these two businessstrategies, as well as the strategy of strengthening our corporate management to support these businessstrategies.
10-year Roadmap to realizing our Group Vision

Summary of Strategies in the Medium-Term Plan 2020

Strategy 1
Expand core areas:
Advance services
unique to us that
demonstrates its
strengths

Strategy 2
Harvest new
businesses: Generate
revenue from new
businesses that
capitalize on ourstrengths, including
in non-financial
sectors
Strategy 3
Strengthen corporate
management
supporting businessstrategies

Summary

Establish new services with vendors➢Strengthen strategic partnership with NEC Group and affiliations withvendors, and move ahead with vendor financing➢Collaborate with vendors to acquire new revenue opportunities, and establish
shared services by proposing sales financing functions and jointly developing aservice foundation⚫
Accelerate specialized businesses in growth areas➢
Provide high value-added services by strengthening ties with business partners,
and strengthen earnings capacity in specialized businesses, such as the ICT service
business, PFI and PPP business, venture fund business and RISA business⚫
Expand customer base and strengthen sales planning and promotion functions➢Strengthen marketing planning functions➢
Cultivate potential customers and expand business with existingcustomers by offering solutions⚫
As well as acquiring revenue steadily from financial services, we raise ourexpertise and presence and create services unique to us that will lead tocommunity revitalization.
◼
Energy: Promote local production and local consumption of energy through thespread of renewable energy, work to prevent global warming, and expand revenue
from our energy business◼
Tourism: Promote local revitalization utilizing the region’s tourism resources, andexpand revenue for our tourism business◼
Agriculture: Stabilize and increase agricultural revenue by encouraging processing,sales and distribution by farmers and optimization of the value chain, and increase
revenue generated by our agriculture business◼
Healthcare: Augment related facilities by pursuing the healthcare facility
warehousing business, and expand revenue for our healthcare business⚫
Establish operational flows addressing diverse work styles, and create efficientand high-quality operations◼
Operational process➢
Establish company-wide operational process assuming a hybrid
work style combining telework and office work➢
Establish “Three Lines of Defense in Effective Risk Management and Control,”ensuring that company-wide operational reforms are pursued and operational
quality improves◼
IT infrastructure➢
Efficiently use leading-edge ICT and advance operational processes at a fasterpace➢
Establish plan to innovate core systems◼
HR development➢
Optimize management system, hire and train specialized human resources,
appropriately assign employees, and achieve work style reforms◼
Staff functions➢
Enhance company-wide optimal specialized functions and improve sales support
capacity⚫

Source: the Company’ s website© NEC Capital Solutions Limited 20223

3. Advancing initiatives for the realization of CSV management from fourperspectives
As part of our aim to realize CSV management, we have arranged initiatives aimed at enhancing social valuethat are highly compatible with our businesses. Our initiatives to enhance social value mainly fall into thefollowing four categories: “Establishing social and ICT infrastructure,” “Revitalizing local communities andeconomies,” “Preventing global warming,” and “Responding to the aging population.”
Advancing initiatives for the realization of CSV management from four perspectives

Source: the Company’ s website© NEC Capital Solutions Limited 20224Framework
The Company’s Sustainability Bond Framework (hereinafter the “Framework”) was formulated based on the“Sustainability Bond Guidelines (SBG) 2021,” “Green Bond Principles (GBP) 2021,” and “Social Bond Principles(SBP) 2021” set forth by the International Capital Market Association (ICMA), the “Green Bond Guidelines 2020”
set forth by the Ministry of the Environment of Japan, and the “Social Bond Guidelines 2021” set forth by theFinancial Services Agency of the Japanese Government. The Framework contains stipulations concerning thefollowing four elements.
1. Use of funds raised
2. Processes for assessing and selecting projects
3. Management of funds raised
4. Reporting

1．Use of Funds Raised
The Company plans to allot funds raised through the issuance of sustainability bonds to the new financing or
refinancing of green projects and social projects that satisfy the eligibility criteria set forth below.
Furthermore, the use of funds for refinancing shall be limited to payments for projects implemented no morethan 24 months prior to the issuance of the sustainability bonds.
[Green Projects]
Classification
Renewable energy

Eligibility Criteria
The installation, etc., of renewable energy power generation facilities andequipment listed below. This is subject, however, to the assumption that all
projects satisfy the environmental assessment criteria.
Additionally, the installation location must be in Japan, and it shall belimited to projects where it is judged there are no issues following advancesurveys concerning the destruction of the natural environment, etc.
・ Solar power・ Wind power (including offshore and onshore)・ Hydropower (small-scale hydropower generation)

・Geothermal (limited to projects with negative CO2 emissions overtheir life cycle)[Social Projects]
Classification
Access to essential services

Development of basic
infrastructure at reasonable
pricesEligibility Criteria
Development of educational ICT
environments in schools
Supply of PCs to elementary,junior high, and high schools, aswell as universities (including
both state and private schools)
Provision of the following
healthcare facilities for seniorcitizens
・ Fee-paying homes for theelderly
・ Serviced accommodation forsenior citizens

Provision of ICT solutions topublic and medical institutions© NEC Capital Solutions Limited 2022

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Target PeopleChildren(In particular, children unable toaccess educational opportunities
owing to economiccircumstances)
Senior citizens

The general public

2．Processes for Assessing and Selecting Projects
Projects receiving funds from sustainability bonds will be selected based on materiality aimed at realizing
CSV management. The IR & PR Department of the Company selects the eligible projects, and assesses
selected projects’ conformity with the eligibility criteria. Next, the Executive Officer in charge of the Finance
Department and the IR & PR Department comprehensively analyzes and considers the selected projects that
fulfill the eligibility criteria after they have passed through the aforementioned process, and he or she makes
the ultimate decision.
Furthermore, the Company confirms that all candidate projects have addressed the following points, in orderto reduce environmental and social risk.
・The project complies with laws and regulations related to the environment, etc., as required by thenational and local governments of the country where the project is being implemented, and surveys ofenvironmental impact are conducted as necessary・

Sufficient explanations are provided to local residents when implementing the project・

Materials procurement, measures to address substances that are harmful to the environment, and waste
management that align with the Company’s environmental policies

3．Management of Funds Raised
The Finance Department of the Company will use management files to allot and manage funds raised, inorder to ensure that the full amount of funds raised from the sustainability bonds is allotted to projects thatsatisfy the eligibility criteria. Once every quarter, the IR & PR Department and the Finance Department will
confirm the status of the allotment of funds using the prescribed methods. In the event that there areunallotted funds, projects that satisfy the eligibility criteria will be newly selected and the funds will bereallotted.
As a means of tracking the allotment of funds, these matters will be subject to confirmation by the General
Manager of the IR & PR Department and the General Manager of the Finance Department. During the period
until the funds raised from sustainability bonds are allotted to projects that satisfy the eligibility criteria, thefunds raised will be managed as cash or cash equivalents.

4．Reporting(1) Allotment of Funds Reporting
Until the full amount of funds raised from sustainability bonds is allotted to projects, the Company intends todisclose the following information on our website on an annual basis.
・The amount of funds allotted for each classification

・The amount of unallotted funds, the scheduled timing of allotment, and methods of managing funds
while they are unallotted・The estimated amount (or proportion) of any funds allotted to refinancing© NEC Capital Solutions Limited 2022

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Furthermore, after the allotment of the full amount of funds raised, the Company will provide timely
disclosure in cases when relevant assets can no longer be used on an ongoing basis, or in case of othermaterial events, such as cases when recovery from an accident is difficult.
(2) Impact Reporting
While any of the issuance amount of sustainability bonds remains outstanding, the Company intends todisclose the following information on our website on an annual basis, as an indication of the effect on theenvironment and society.
[Green Projects]
Classification
Renewable energy

Examples of Impact Reporting Indicators
 Number of domestic renewable energy power generation facilities
 Total amount of power generated per year (MWh) Equivalent amount of CO2 emissions reduced (estimated amount, t-CO2)[Social Projects]
Classification
Access to essential services(Development of educational ICT
environments in schools)

OutputNumber of PCs
supplied to schools(GIGA Schools, etc.)

Access to essential services(Provision of healthcare facilities
for senior citizens)

Outline of healthcare
facilities for seniorcitizens
Number of facilities
and total number ofrooms

Development of basic
infrastructure at reasonable
prices(Provision of ICT solutions topublic and medical institutions)(1) Outline of ICT
systems for
firefighting andnumber of units(2) Outline of ICT
systems for
hospitals andnumber of cases© NEC Capital Solutions Limited 20227

Outcome・ Number of schools
using PCs
・ Number of PCs
supplied(number of children
and pupils able to use)
・ Number of feepaying homes for theelderly with nursing
care, etc.
・ Total number ofrooms(number of seniorcitizens able to moveinto facilities)(1) Regional
population covered by
the relevant systems(2) Number of patientsor healthcare
professionals
benefiting from therelevant systems

ImpactRealization of a society
where all children
have equal access to
educational
opportunities
Contribute to social
demand for thedevelopment andenhancement ofhealthcare facilities forsenior citizens

Contribution to theshift to ICT throughthe development ofpublic infrastructure
and the creation ofsocial foundations