Sustainability-Linked Loans

Sustainability-linked loans incentivize companies to meet ambitious sustainability performance targets (SPTs). Specifically, these loans 1) clarify the relationship between the company’s sustainability goals, as set out in its comprehensive social responsibility strategy, and its SPTs; 2) evaluate and measure sustainability improvements using predetermined, appropriate SPTs tied to Key Performance Indicators (KPIs); and 3) ensure transparency of the above through post-lending reporting.

These loans are in accordance with the Green Loan Principles, Social Loan Principles, and Sustainability-Linked Loan Principles of the Asia Pacific Loan Market Association (APLMA), Loan Market Association (LMA), and Loan Syndications and Trading Association (LSTA); the Green Loan and Sustainability Linked Loan Guidelines issued by Japan’s Ministry of the Environment; and other principles.

Transition Finance

Transition Finance method supports initiatives by companies that are working to steadily reduce greenhouse gas (GHG) emissions in line with long-term targets and strategies consistent with the goals of the Paris agreement, as part of achieving a low-carbon society. The lending can be structured either as use of proceeds instruments, which are transition loans with an established purpose such as green loans, or as general corporate purpose instruments, which are transition-linked loans with an unspecified funding purpose such as sustainability-linked loans.

These loans are in accordance with the International Capital Market Association (ICMA)’s Climate Transition Finance Handbook; the Basic Guidelines on Climate Transition Finance released by Japan’s Financial Services Agency, Ministry of Economy, Trade and Industry, and Ministry of the Environment; and other principles.

Mizuho Sustainability-Linked Loan Pro

Mizuho Bank has compiled a framework consistent with the international standards of the Sustainability-Linked Loan Principles in order to support more companies’ sustainability efforts. Mizuho Sustainability-Linked Loan Pro, a loan product for middle-market firms and SMEs, has been developed in line with this framework.

Companies raising funds with these loans set sustainability performance targets (SPTs) in line with a detailed sustainability strategy that encompasses achievement of CO2 reduction targets. Each year their progress in attaining their SPTs is confirmed, and based on this the loan interest rate reviewed.

As this framework itself has been assessed by an external rating agency for consistency with the Sustainability-Linked Loan Principles, borrowers do not need to individually obtain such an evaluation of their loans’ consistency with the principles.

We support both fund raising and sustainability initiatives by clients implementing or planning to implement sustainability strategies.

Mizuho Positive Impact Finance Pro

Positive impact finance is a type of finance wherein, based on the Principles for Positive Impact Finance determined by the United Nations Environment Program Finance Initiative (UNEP FI) and the related Implementation Guidance, financial institutions comprehensively analyze and assess business activities’ positive and negative impact on the environment, society, and economy and implement finance to continuously support positive impact activities. The financial institution prepares a framework for impact analysis and assessment and conducts post-lending monitoring of impact.

This loan product aims to comprehensively maximize the positive impact and lessen the negative impact of the companies that are receiving the financing and investment and are subject to assessment.

As a version of Mizuho Positive Impact Finance designed for middle-market firms and SMEs, it follows the same basic principles as Mizuho Positive Impact Finance for impact evaluation, but includes some assessment methods tailored to the characteristics of middle-market firms and SMEs.

We support both fund raising and sustainability initiatives by clients implementing or planning to implement sustainability strategies.

SDG Initiative Support Finance

SDG Initiative Support Finance provides support for clients’ fund raising while also facilitating middle-market firms and SMEs’ initiatives for the sustainable development goals (SDGs).

We provide support for clarifying initiatives and challenges using diagnostic tools and for creating SDG-related targets, and we provide introductions to external consulting companies and other organizations to further help firms achieve their targets and overcome their challenges.

We support both fund raising and SDG initiatives by clients engaged or planning to engage in SDG projects.