Notice regarding the Conclusion of a Positive Impact Finance (with unspecified use of funds) Loan Agreement
December 12, 2022
Sumitomo Heavy Industries, Ltd. (Head Office: Shinagawa-ku, Tokyo, President: Shinji Shimomura, hereafter “this Company”) and Sumitomo Mitsui Trust Bank, Limited (President: Kazuya Oyama) have, based on the United Nations Environment Programme Finance Initiative’s (hereafter “UNEP FI”)(*1)“Principles for Positive Impact Finance”(*2), agreed on a “Positive Impact Evaluation (with unspecified use of funds)” (hereafter “the Evaluation”) and a “Positive Impact Finance” financing contract (hereafter “this Matter”) based on the Evaluation, with the following details.
Positive Impact Finance involves a comprehensive analysis and evaluation of the impact (positive and negative impacts) of business activities on the environment, society, and economy, with the objective of continuously supporting those activities. Adopting the degree to which business activities, products, and services contribute to SDGs achievement as a performance indicator, carrying out monitoring based on disclosed information, and engaging with businesses to support their activities are its main features.
Based on the Company group corporate mission “to contribute to society with excellent products and services”, we offer diverse products and services to meet today’s requirements. As a general machinery manufacturer, we aim to provide both corporate and social value by reducing the negative environmental impact of our products, enhancing customers’ labor productivity and environments through equipment automation and digitization, and offering innovative products and services as solutions for societal issues.
< Overview of Positive Impact Evaluation >
Upon agreeing this Matter, the Company shall be assessed by Sumitomo Mitsui Trust Bank, Limited on topics affecting SDGs achievement as shown below.
The Evaluation shall also obtain a third-party opinion (*3) from Japan Credit Rating Agency, Ltd. (President: Shokichi Takagi) regarding compliance with the Positive Impact Finance Principles procedures that form part of the evaluation and the rationale for the implemented evaluation indicators.
| Theme | Content | Goals and Indicators (KPI) | SDGs |
| Contribution to reduction of CO2 emissions | Implementation of reduction of CO2 emissions during product manufacture and use | a. Reduction of CO2 emissions during business activities (Goals) ・Aim for carbon neutrality (net-zero CO2 emissions) across the whole Sumitomo Heavy Industries Group by 2050 ・Reduce CO2 emissions during production (Scope1,2) 50% by 2030 (compared to FY2019) (Indicator (KPI)) ・CO2 emissions during business activities (Scope1,2) b. Reduction of CO2 emissions during product use by customers (Goal) ・Reduce CO2 emissions during product use by customers (Scope3, category11) 30% by 2030 (compared to FY2019) (Indicator (KPI)) ・CO2 emissions during product use by customers (Scope3, category 11) |
[7. Affordable and Clean Energy] [12. Responsible Consumption and Production] [13. Climate Action] |
| Initiatives for waste and regeneration of resources | Contribution to a recycling-oriented society by effective utilization of resources | a. Zero waste generation during business activities (Goals) ・Aim for zero waste generation during business activities (Indicator (KPI)) ・Amount of waste discharge (generated amount, final treated amount) (t) b. Strengthening research and development of products contributing to reduce waste by regenerating resources (Goals) ・Implement initiatives for resource regeneration (Indicator (KPI)) ・Status of development of products/technologies etc. for resource regeneration |
[3. Good Health and Well-being] [6. Clean Water and Sanitation] [12. Responsible Consumption and Production] [13. Climate Action] |
| Improved labor productivity/environment | Infrastructure development via product automation and labor force substitution to improve labor productivity and working environments to realize a better life and working style for people | Strengthening research and development into infrastructure development via “product automation/labor force substitution” (Goals) ・Improve customers’ labor productivity and working environments through infrastructure development via product automation/labor force substitution (Indicator (KPI)) ・Status of research and development into infrastructure development via “product automation/labor force substitution” |
[8. Decent Work and Economic Growth] [9. Industry, Innovation and Infrastructure] |
| Personnel management | a. Creation of an organizational culture in which each employee’s individual abilities can be fully demonstrated and differences in personality and attributes are respected b. Realization of a workplace where each employee is safe, secure, and well and can work with vigor |
a. Utilization of diversity management to create a workplace where a diverse workforce can flourish (Goals) ・20% or more of new graduate hires should be female ・24 female managers by April 1, 2023 (doubled from April 2015) (Indicators (KPI)) ・Ratio of female new graduates hired (%) ・Number of female managers (persons) b. Utilization of labor health and safety management to create a workplace that values safety above all else (Goals) ・Eliminate work-related injuries (within the company) (Indicators (KPI)) ・Work-related fatalities (persons) ・Incidents resulting in work-related injuries (incidents) ・Accident frequency ratio (%) ・Ratio of ISO45001 certified sites (%) |
[5. Gender Equality] [8. Decent Work and Economic Growth] |
| CSR procurement | Implementation of sustainable procurement initiatives throughout the entire supply chain | Upgrading of supply chain management based on CSR procurement guidelines (Goals) ・Implement initiatives for CSR procurement throughout the entire supply chain (Indicators (KPI)) ・Supplier survey completion ratio (%) |
[8. Decent Work and Economic Growth] [12. Responsible Consumption and Production] [16. Peace and Justice Strong Institutions]/td> |
(*1) The United Nations Environment Programme Finance Initiative (UNEP FI)
The United Nations Environment Programme (UNEP) is an executive body for implementing the “Human Environment Declaration” and the “International Environmental Action Programme”, established in 1972 as a subsidiary body to the United Nations system. UNEP FI represents a broad as well as a close partnership between UNEP and more than 200 global financial institutions. Since its establishment in 1992, UNEP FI has been working in concert with financial institutions, policy/regulatory authorities to transform itself into a financial system that integrates economic development and ESG considerations.
(*2) The Principles for Positive Impact Finance
The Principles for Positive Impact Finance was developed by UNEP FI in January 2017 as a financial framework for achieving the SDGs. Companies disclose the level of contributions to achieving SDGs through KPIs. Banks then provide funding by evaluating the positive impact observed from these KPIs that is intended to guide the borrowers to increase the positive impact and reduce the negative impact.
The lending bank, as a responsible financial institution, will check if the impact is continuing or not by monitoring the indicators.
(*3) Third-party opinion on compliance with Principles of Positive Impact Financial and rationality of used metrics
For the independent opinion from Japan Credit Rating Agency, Ltd., please visit:
https://www.jcr.co.jp/en/greenfinance/