Aozora Signs Sustainability-Linked Loan Agreement

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by KnowESG
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Aozora Bank, Ltd. said that it signed an agreement with KYORITSU Co., Ltd. about the provision of a sustainability-linked loan based on "Aozora's ESG Framework Loan".

KYORITSU is a printing business based in Saitama Prefecture, with its principal company being Kyoritsu Printing Co., Ltd. Aozora shares KYORITSU's philosophy of "contributing to the realisation of a sustainable society by working to protect the environment and continuing efforts to become a next-generation industry with a low impact on the environment, such as by providing environmentally friendly products," and will use the loan to fund their initiatives.

Sustainability Linked Loans (SLL) are loans that are meant to encourage sustainable business activities and growth. They do this by setting ambitious Sustainability Performance Targets (SPTs) that are in line with a borrower's sustainability strategies and by linking loan terms and conditions, such as interest rates, to the achievement of SPTs, which motivates the borrower to reach them.

The Bank has developed the "Aozora's ESG Framework Loan" under the Sustainability Linked Loan Principles of the Loan Market Association (LMA), Loan Syndications and Trading Association (LSTA), and Asia Pacific Loan Market Association (APLMA), as well as the standards mandated by the "Green Loan and Sustainability Linked Loan Guidelines" established by the Japanese Ministry of the Environment. As a third-party evaluation, Rating and Investment Information, Inc. provided a second opinion on the loan.

To "actively contribute to the sustainable growth of society," as stated in its Management Philosophy's Key Priorities, Aozora endeavours to integrate sustainability into all of the Group's financial services and activities as a business entity, as well as promote initiatives in close collaboration with senior management.

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Source: Aozora