Sustainability Finance

Green Finance

NMF practices investment management taking into consideration Environment, Society and Governance (“ESG”). As a part of such initiatives, NMF strives to realize a sustainable environment and society by implementation of green finance including green bonds and green loans etc...

Green Bonds

Green bonds are a type of bond instrument to finance eligible green projects and they are issued in accordance with the Green Bond Principles established by the International Capital Markets Association.

Green Loans

Green loans, like green bonds, are borrowings to procure funds to be used for environmentally friendly businesses, in accordance with the Green Loan Principles, an international guideline.

Green Finance Framework

NMF established Green Finance Framework in order to implement green finance.

（1）Use of Proceeds

NMF will allocate all procured proceeds from green finance for the following funds.

• The funds for acquisition of eligible green projects(*)
• The funds for refinancing of borrowings used to acquire eligible green projects
• The funds for redemption of outstanding investment corporation bonds issued to acquire eligible green projects.

• ※Eligible green projects are existing or new specified assets that fulfill the criteria indicated in (2) Eligible Criteria below.

（2）Eligible Criteria

Eligible Criteria refers to assets that acquire or receives recertification in any of the valid certifications a. through c. below, or are scheduled to acquire such certification in the future.

• a. At least 3 Stars under DBJ certification
• b. At least 3 Stars under BELS certification (2016 standards)
       At least Level 4 for non-residential or at least Level 3 for residential (2024 standards)
      * Except when BEI exceeds 0.75 for plants and such (including logistics warehouses)
• c. At least B+ rank under CASBEE

• ※Please refer to NMF's acquisition status of raising the Proportion of “Green” Properties in Our Portfolio.

（3）Project Evaluation and Selection Process

Eligible criteria are determined based on the sustainability promotion regulations and the approval authority rules of the asset management company.
Eligible green projects in which proceeds from green finance will be invested are evaluated and chosen by the NMF Investment Management Group and Finance & Accounting Department based on eligible criteria, and the selection is made upon approval by the Investment Committee or the Head of the NMF Investment Management Group based on decision-making authority rules of the asset manager.

（4）Management of Proceeds

NMF shall set the debt amount calculated by multiplying the total book value of eligible green projects owned by NMF by total assets LTV (Loan-to-Value Ratio) as of the most recent fiscal period end calculable as of the date of obtaining proceeds (the "Eligible Green Debt Amount") as the upper limit of the balance of green finance. NMF manages to ensure that the balance of green finance will not exceed the Eligible Green Debt Amount. Furthermore, as long as the balance of green finance exists, NMF will internally track and manage the allocated funds on a portfolio basis.

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(Note)	The total book value of eligible green project and LTV ratio are as of the end of February 2025.

（5）Reporting

a. Reporting on Allocation of Proceeds

NMF's allocation of proceeds as to green finance is as follows.

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Green Bond

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Green Loan

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b.Impact Reporting

NMF shall disclose the following indices as of the end of every February as long as the balance of green finance remains.

• Number of Eligible Green Projects
• Level of each green certification acquired
• Greenhouse gas (GHG) emissions, energy consumption and water consumption at Eligible Green Projects(*)

• ※The range of Eligible Green Projects and actual figures are disclosed as of the time of report submission.
  Until the 2022 results, this covered the portion over which the NMF possesses control authority, after 2023 results, the scope has also been expanded to include areas over which the NMF possesses no control authority about Greenhouse gas (GHG) emissions, energy consumption due to changes in materiality in the environment of the NMF.
  Regarding water consumption, we will cover the portion over which the NMF possesses control authority even after 2023 results.

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• ※For level of each green certification acquired please see here.

Evaluation by External Organization

NMF has acquired “Green 1(F)”, the highest rating in JCR Green Finance Framework Evaluation by Japan Credit Rating Agency, Ltd. (JCR) for its eligibility of green finance framework.

JCR Green Finance Evaluation：https://www.jcr.co.jp/en/greenfinance/green/