Measures Being Taken for Sustainable Finance
SMBC Group proactively endeavors to solve environmental and social problems through the core businesses of the respective Group companies. We are focusing on sustainable finance, especially in the field of environmental issues, with a goal of achieving a cumulative total of 50 trillion yen over the 10-year period leading up to 2030.
For instance, in the area of power generation via renewables (where certain forms of
nature’s power are employed, e.g., solar energy, wind power), various services are being
provided by relevant Group companies leveraging their respective advantages, for example,
lending by SMBC; trust service by SMBC Trust Bank concerning power generation facilities,
construction sites, etc.; provision of leases by SMFL for power generation facilities; and
equity investment by SMBC Nikko Securities. Altogether, we will pursue such initiatives as
an integrated group for general financial services.
Project Financing for Renewable Energy
SMBC: Project Finance (Japanese only)
For many years now, SMBC has been providing project finance for renewable energy
businesses such as solar power generation and wind power generation in Japan and overseas.
The bank has a strong track record in this area. Since no carbon dioxide is emitted in
renewable energy in principle, these operations are deemed to reduce CO2 emissions because
the power they generate can replace energy from non-renewable sources such as coal, oil
and natural gas. Support for such projects contributes to reductions in CO2 emissions and
For further details on project finance, please refer to the following website.
Sustainable Value-Added Funds
In February 2021, in collaboration with SMBC, SMBC Trust Bank launched the “Sustainable Value-Added Fund No. 1 Investment LLP” and have already invested in five properties. Investing mainly in older properties, we undertake a range of renovation projects, such as updating air conditioning facilities to the latest equipment to save energy. Through such investments, we contribute to the enhancement of the quality of the fund’s domestic real estate portfolio and reduce the environmental burden that the real estate carries.
Initiatives for Renewable Energy Through Business
SMBC Trust Bank conducts renewable energy business initiatives that include receiving on
trust for solar power facilities and site usage rights (ownership, leasehold, and surface
rights) and managing them as trust assets as the trustee paying dividends to beneficiaries
on income from the electricity sold.
Initiatives for Solar power Energy Services (PPA)
SMFL Mirai Partners, a strategic subsidiary of Sumitomo Mitsui Finance and Leasing, provides on-site solar energy services (PPA model).
SMFL Mirai Partners will implement solar power generation equipment on the roofs of customers' buildings, etc., in order to materialize CO2-free electricity procurement of customers (energy service).
SMFL Group also provides other decarbonization solutions such as off-site solar energy services, energy-efficient equipment leasing, subsidy consulting, and LED rentals to help customers reduce Greenhouse Gas emissions.
Sumitomo Mitsui Finance and Leasing (hereinafter “SMFL”) offers "Sustainability linked leases/loans," in which the lease fee/interest rate is linked to the CO2 emission reduction of vessels.
In December 2020, SMFL became the first leasing company in the world to sign the Poseidon Principles, which were developed to promote the decarbonization of the shipping industry as a financial institution. This initiative is linked to the lease fee/interest rate to the valuation formula of the same principle.
Through the Poseidon Principles initiative, we will enhance our commitment to the decarbonization agenda, and support our maritime clients' financing needs in the context of contributing to the efforts to build a carbon-free and renewable energy based society.
Real estate brand “NEWNO”
SMFL Mirai Partners, a strategic subsidiary of Sumitomo Mitsui Finance and Leasing, has launched NEWNO, a new brand in its real estate business in July 2021 and has developed five properties so far. The project aims to create highly functional buildings that contribute to a sustainable society through environmental considerations, such as the use of electricity that does not emit greenhouse gases (GHG) in the power generation process, and safety and security measures, such as improving ventilation efficiency on each floor in accordance with the intended use of the building from the perspective of preventing infectious diseases. We will continue our efforts to develop real estate with superior comfort and to revitalize local communities, taking into consideration the environment and the health of users.
Track Record of Green Bond Issues
Green Bonds Issuance by SMBC_SMFG
In October 2015, SMBC, SMBC Group's main operating bank, issued USD denominated green bonds. It was the first green bond issuance among Japanese private financial institutions. Since then, SMBC Group regularly issues green bonds.
Support for Green Bond Issuance at SMBC Nikko
SMBC Nikko:Finance Advisory（Japanese Only）
SMBC Nikko launched a specialized department (present: Sustainable Solution Dept.) in 2018, in order to solve environmental and social issues through business in the financial and capital markets. We are actively engaged in supporting companies and organizations to issue green bonds and other SDGs bonds.
To accelerate global decarbonization, it is essential to finance the transition of hard-to-abate sectors facing challenges to leapfrog to a low-carbon economy.
SMBC Group established “Transition Finance Playbook” (hereinafter referred to as the “Playbook”) which outlines SMBC Group’s definition of and approach towards transition finance. We will contribute to the decarbonization of the real economy through transition finance.
The Playbook refers to international guidelines for transition finance, recommendations of Net Zero Banking Alliance, as well as to local applicable regulations, taxonomies and roadmaps. SMBC Group obtained Second Party Opinion from DNV Business Assurance Japan Co., Ltd for the Playbook. SMBC Group will continue engaging with our customers leveraging the Playbook to contribute to achieving decarbonization globally.