The Asset Management Company (“MTAM”) which manages the investment corporation (“MTR”) is committed to “Promoting GHGs emissions reduction and energy saving”, “Contributing to recycle-oriented society”, “Responding to climate change and improving resilience”, “Disclosing ESG information” as stipulated in sustainability policy. MTAM has formulated a green finance framework with the aim of further promoting ESG investment and strengthening funding base of MTR by expanding the number of investors and lenders interested in ESG investment and financing.

Green Finance Framework

Use of Funds Procured

Funds procured of the green finance will be used for the acquisition of assets that meet the following eligibility criteria (“the Eligible Green Projects”) for the repayment and redemption of loans or investment corporation bonds that were required for acquisition of assets that meet the Eligible Green Projects or for repair work that meets the Eligible Green Projects, etc.

Eligibility Criteria

（1） Green Buildings

Any assets with the following valid certifications that have already been obtained or updated or are planned to be obtained or updated in the future.
　① Three, Four or Five stars by DBJ Green Building Certification
　② (i) B+, A or S Rank in Certification for CASBEE
　　 (ii)B+, A or S Rank in the municipal version of CASBEE *1
　③ (i) Three, Four or Five stars in BELS Certification (2016 standard) (excluding existing ineligibility *2)
　　 (ii)The following levels in BELS Certification (2024 standard)
　　 　　non-Residential: Four, Five or Six level *3
　　　　 Residential: (a) Level 3 to 6 if there are renewable energy facilities *4
　　　　　　　　　　 (b) Level 3 or 4 if there is no renewable energy facility *4
　④ Silver, Gold or Platinum in LEED Certification　(For LEED BD+C, v4 or later)
　⑤ Stage 2 or higher in both heat insulation capacity of the building and energy-saving capability of the equipment systems of Tokyo Metropolitan Government’s Buiding Environment Planning Program (after 2020 standars).
　⑥ Properties that qualify as ZEB (Net Zero Energy Buildings)
　　(Properties that fall under any of definitions of ZEB, Nearly ZEB, ZEB Ready, or ZEB Oriented)

　*1 Within 3 years from the construction completion date
　*2 Existing ineligibility: factories (including distribution warehouses) , BEI = more than 0.75
　*3 New acquisition of existing buildings built before 2016, must be level 3 or above and no existing ineligibility
　*4 New acquisitions of existing buildings built before 2016 must be eligible at Level 2 or above, regardless of whether they are powered by renewable energy

（2） Renovations on owned assets that meets any of the following criteria:
　① More than 30% reduction in CO2 emissions or energy consumption
　② More than 30% reduction in water consumption
　③ Equipment renovations aimed at making environmentally beneficial improvements.
　　(In principle, the renovation that is expected to reduce usage by 30% or more compared to conventional products)
　④ More than one level of star/rank improvement in the green building certifications listed in Eligibility Criteria [1]
　⑤ Installation, introduction, and acquisition of renewable energy-related equipment on the premises of owned assets

Process for Project Selection

The selection process for property acquisition, renovation, equipment installation, etc. that meets the eligibility criteria is as follows.

Projects for which the procured funds will be used (property acquisition, renovation, equipment installation, etc. that meet the eligibility criteria) will be examined for compliance with the eligibility criteria by the Strategic Management Department of MTAM. When procuring funds through green finance, the process goes through the following process in the same way as regular finance (execution of borrowings, issuance of investment corporation bonds).

＜In the case of green loan＞
It will be approved by managing director in charge of the Strategic Management Department of MTAM and will be approved and executed by president and representative director.

＜In the case of green bonds＞
It will be approved and executed by the Board of Directors of MTR (if a comprehensive resolution regarding the issuance of investment corporation bonds was passed by the Board of Directors of MTR, it will be executed after the approval of the executive director of MTR).

Furthermore, after-the-fact reports will be made at the Meeting for Promotion of Sustainability of MTAM, which is held four times a year, regarding the procurement of funds through green finance for targeted projects.

Allocation Plan

After funds procured of the green finance are deposited into MTR’s account, it will be allocated to acquire the assets that meet the following eligibility criteria (Eligible Green Projects), to refinance existing loans or to redeem investment corporation bonds (including green bonds) already issued.

Reporting

Allocation Reporting

The allocation plan and the following items will be disclosed once a year on the MTR’s website until the green finance proceeds are fully allocated.
　・ The balance of green finance procurement
　・ The limit of green eligible debt
　・ The status of green finance allocation
　・ If there are unallocated funds, the unallocated amount and expected allocation date.

Impact Reporting

The following items will be disclosed on MTR’s website once a year to the extent practicable.

＜Types of certification of acquired assets and evaluation status of them＞

Please see “External assessment” for information on the acquisition status of green building certifications, energy efficiency ratings, etc.

Furthermore, please see “Environmental Performance Data” for information on CO2 emissions, energy consumption, and water consumption for the entire portfolio.

Evaluation by External Organization in green finance framework

MTR has received the highest overall rating of “Green 1” from Japan Credit Agency, Ltd. (JCR), which is a green finance rating agency, regarding the eligibility of the green finance framework.