"Proposal 5 at the 18th Ordinary General Meeting of Shareholders", 10 June 2020

The Board of Directors opposes shareholder Proposal 5 (hereafter “the Proposal”) 1 which was submitted for the 18th Ordinary General Meeting of Shareholders.

We have been proactively disclosing our business strategy, including goals which are based on the Paris Agreement, in our TCFD Report in addition to our annual Integrated Report. The Proposal calls for our company to stipulate in the Articles of Incorporation a provision stating that the business strategy “be disclosed in its annual reporting”. However, we have already stipulated similar provisions in our Environmental Policy, one of our key policies with equivalent weight to our Human Rights Policy. We oppose the Proposal as we believe it is inappropriate in light of the conventional positioning of the Articles of Incorporation describing the company’s purpose, name, and other such matters.

...The Proposal states "Currently, the company is the largest lender in the world to coal power developers” as the reason for the Proposal. Similar statements are cited in proxy advisory reports issued by two proxy advisors (Institutional Shareholders Services Inc. and Glass Lewis & Co., LLC). To the best of our company's knowledge, this is based solely on the Report 2 published by the German NGO Urgewald, and other authors. The statement in this Report that “we have provided USD 16.8B in direct loansto coal plant developers since January 2017” does not reflect the reality, and we believe that there are problems with the accuracy and appropriateness of such amounts

...Therefore, we have disclosed our credit balance of project finance to coalfired power generation facilities as of the end of FY2019 as JPY 299.5B, and have set targets to reduce this balance to 50% by FY2030 and to zero by FY2050...