Finance Sustainability Linked Finance
Overview
OJR has launched sustainability-linked finance based on “Guidelines for Sustainable Finance” and “Sustainability-Linked Finance Framework” to promote sustainable finance among financial institutions.
Sustainability Linked Finance Flamework
We have established the following framework in compliance with the collectively referred to “Principles,” which include the “Sustainability-Linked Bond Principles (2020)” formulated by the ICMA (International Capital Market Association), the “Sustainability-Linked Loan Principles (2023)” formulated by the LMA (Loan Market Association), LSTA (Loan Syndications and Trading Association), and APLMA (Asia Pacific Loan Market Association), as well as the “Green Bond and Sustainability-Linked Bond Guidelines (2022)” and the “Green Loan and Sustainability-Linked Loan Guidelines (2022)” established by the Ministry of the Environment, Japan.
◆ Selection of Key Performance Indicators (KPI)
OJR has selected our CO₂ emissions for Scope1, Scope2, and Category 13 of Scope3 that are under OJR’s operational control as KPI by driving energy management such as improving energy efficiency, promoting energy conservation, and the introduction of renewable energy, etc., in our properties to aim for net zero GHG emissions by 2050.
◆ Measurement of Sustainability Performance Targets (SPT)
The scope of CO₂ emissions reduction for SPT is the range selected by KPI above.
| SPT | Period | |
|---|---|---|
| 1 | Achieve 14% reduction in CO₂ emissions from 2021 levels by 2024 in line with *“Near term target” | Period ending March 31, 2025 |
| 2 | For each year from 2025 to 2029 an equal reduction between the 2024 target 14 reduction from 2021 and the 2030 target 42 reduction from 2021 | For a year ending March 31 of each year |
| 3 | Achieve 42% reduction in CO₂ emissions from 2021 levels in 2030 in line with SBT “Near term target” | For a year ending March 31, 2031 |
◆ Specific features of the Finance
Finance interest rate linked to the performance of SPT
| Judgment contents of SPT | terms and conditions |
|---|---|
| Achievement of SPT tailored to individual financing periods on the last day of the reference period | Reduce the applicable rate upon achievement or raise the applicable rate upon non achievement |
The specific range linked to the applicable interest rate will be determined separately for each financing arrangement. Suppose reduction targets are set individually for each financing period. In that case, details such as the SPT judgment criteria, the judgment date, and the applicable terms and conditions will also be stipulated separately in the relevant contracts or agreements.
For reporting on the performance of KPI/SPT, validation will be conducted by an independent third party, and the results will be disclosed on OJR’s website or other platforms.
◆Reporiting
OJR discloses the performance data about our KPI (CO₂ Emissions) .
◆ Third-party Opinion
OJR has obtained a third-party opinion from Japan Credit Rating Agency, Ltd. (JCR) confirming adaptability with the Sustainability Link Finance Framework principles.