Outline
Outline
Sustainability-Linked Loans are made in accordance with the Sustainability-Linked-Loan Principles (SLLP) developed by the Loan Market Association and related organizations, and the Green Loan and Sustainability-Linked Loan Guidelines developed by the Ministry of the Environment of Japan. By providing incentives in the form of loan terms linked to the borrower’s achievement of sustainability performance targets (SPTs) aligned with its own sustainability strategy, this groundbreaking financing approach aims to achieve sustainable growth for the borrower and the greater society. Under the SLLP and the Ministry of Environment Guidelines, the requirements for offering a Sustainability Linked Loan must be met from five main perspectives: (1) selection of KPIs, (2) setting of SPTs and measurement of improvement in the borrower's sustainability, (3) loan characteristics, and (4) reporting (5)verification.
A DBJ Sustainability Linked Loan with Engagement Dialogue provides for dialogue between DBJ and the borrower. This allows us to help customers establish optimal SPTs that will motivate them to upgrade their sustainability management and help them achieve their SPT goals.
Customers benefit from visualizing their sustainability initiatives through the dialogue process, and also enjoy the beneficial publicity that comes with qualifying for a Sustainability Linked Loan.
The process of selecting and reviewing SPTs is handled by the Sustainable Solution Department, a section independent from those responsible for sales and financial screening. Drawing on knowledge gained through dialogue with customers on the non-financial aspects of their business, the Sustainability Solution Department also collects information on international trends and the latest findings related to sustainability.
There are two methods of review: outsourcing to an external agency, and internal review, the latter involving self-assessment by the borrower firm. If the customer chooses to have an internal review, the Sustainable Solutions Department will engage it in multiple rounds of dialogue, confirm its conformance with relevant principles and guidelines, and organize the findings into a Dialogue Report to be presented to the customer.
