Green Finance:Sustainability Linked Loan
In accordance with the new medium-term management plan "Staying Ahead 2022 with Digitalization and Green" that NYK announced in March 2018, the company aims to integrate environmental, social, and governance (ESG) principles into management strategies to contribute to the sustainable development of society and enrichment of the company' s corporate value.
To achieve these goals, NYK has become the first company in the global shipping industry to issue labelled green bonds, and after that achievement in May 2018, NYK has arranged several green loans to further support investment in environmental technology from a finance viewpoint.
NYK will continue its efforts to keep a wide range of stakeholders involved in the company' s proactive approach to environmental investment as the company makes efforts to contribute to realizing a sustainable society with technology that lessens environmental burdens.
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Summary of Sustainability Linked Loan
|Agreement date||November 29, 2019|
|Type||Revolving credit facility (Commitment line)|
|Arranger/Agent||MUFG Bank, Ltd.|
|Participating financial institutions||The Norinchukin Bank
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation
MUFG Bank, Ltd.
|Total amount||50 billion yen|
|Period||5 years from November 29, 2019, to November 29, 2024|
|Use of proceeds||Business fund|
MUFG Bank, Ltd. granted NYK a syndicated sustainability-linked loan, Japan's first advanced loan that allows for conditions such as the loan’s interest rate to be adjusted according to the borrower’s CSR performance.
This loan encourages sustainable economic activities and growth by linking loan pricing to company performance, which is determined by the score provided by CDP* annually. The interest rate would not increase as long as NYK continues to be evaluated highly by CDP. The interest rates will not rise due to CDP ratings until the repayment deadline as long as high CDP ratings are maintained.
- *CDP (formerly Carbon Disclosure Project)
An international non-profit that drives companies and governments to address environmental issues such as climate change. Since 2003, CDP has been sending out questionnaires every year to major companies around the world to collect corporate environmental information, such as carbon emission amount and actions for climate change, to assess management risk related to climate change. CDP then uses a standardized methodology to give each company a score.
This loan has obtained third-party opinions from Japan Credit Rating Agency Ltd. (JCR) for the loan’s rationality and compliance with the Sustainability Linked Loan Principles published by the Loan Market Association (LMA). In the evaluation conducted by JCR, this loan was evaluated for its contribution to SDGs and targets.The detailed report by JCR can be found at the link below.
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