Sustainable Finance

What is Sustainable Finance?

Sustainable finance refers to the provision of finance to help achieve a sustainable society. (Expert Panel on Sustainable Finance of Japan's Financial Services Agency)
As demand for investments that help solve social issues grows, SMFL recognizes the critical need for stakeholders to understand the hopes we have placed on our initiatives intended to resolve social issues. With this in mind, we will actively engage in the use of sustainable finance.
In addition, we will provide ESG investment opportunities by procuring funds through sustainable finance as well as further promoting business that helps solve social issues.

Sustainable Finance Framework

Flow chart of Mitsui Sumitomo Finance & Leasing's sustainable financial activities. As ESG procurement, there are Green Bonds/Loans, Social Bonds/Loans, and Sustainability Bonds/Loans, which represent ESG investments in green and social eligible criteria such as renewable energy, green buildings, helicopter leasing business, and satellite office services. Rating agencies and external evaluation companies are also listed, contributing to solving social issues.

SMFL procures and manages funds as part of its sustainable finance activities based on a framework established in accordance with the following criteria:

  • The Green Bond Principles 2022 issued by the International Capital Market Association (ICMA)
  • The Green Loan Principles 2023 issued by the Loan Market Association (LMA), Asia Pacific Loan Market Association (APLMA), Loan Syndication and Trading Association (LSTA)
  • Green Bond Guidelines 2022 (Japan's Ministry of the Environment)
  • Green Loan Guidelines 2022 (Japan's Ministry of the Environment)
  • Social Bond Principles 2023 (ICMA)
  • Social Loan Principles 2023 (LMA, APLMA, LSTA)
  • Social Bond Guidelines 2021 (Japan's Financial Services Agency)
  • Sustainability Bond Guidelines 2021 (ICMA)

SMFL has obtained the highest ranking sustainability framework assessment of SU1 (F) from Japan Credit Rating Agency, Ltd. as a third-party evaluation for this framework.

Second-Party Opinion Japan Credit Rating Agency, Ltd. (JCR) Second-Party Opinion（PDF : 872KB）

Issuance track record

Track record Interim report
Execution Date: March 2023
Green Syndicated Loan		 Interim Report: As of March 31, 2024
Execution Date: November 2023
Sustainability Syndicated Loan 		Interim Report: As of March 31, 2024

Positive Impact Finance

Positive Impact Finance is based on the Principles for Positive Impact Finance proposed by the United Nations Environment Programme Finance Initiative. It is a financing method through which financial institutions comprehensively analyze and evaluate both the positive and negative impact corporate activities have on the environment, society, and economy for the purpose of providing ongoing support for ESG activities.

Third-party opinion on positive impact finance is as follows:

Third-Party Opinion on Positive Impact Finance
provided by MUFG Bank, Ltd.		 Third-Party Opinion（PDF : 1,362KB）

Sustainability-Linked Loans

A sustainability-linked loan is a loan that is designed to achieve sustainable growth for the borrower and society by establishing sustainability performance targets (SPTs) that are consistent with the borrower’s sustainability strategy and appropriate key performance indicators (KPIs) that help upgrade the borrower’s sustainability management while also linking SPTs with the terms and conditions of the loan based on the Sustainability-Linked Loan Principles and Green Loan and Sustainability-Linked Loan Guidelines.

Positive impact finance self-assessment results are as follows:

Sustainability-Linked Loan
with Engagement Dialogue
with Development Bank of Japan Inc.		 Self-Assessment Results
（PDF : 1,387KB）		 Independent Practitioner's Assurance Report
（PDF : 3.3MB）