SMBC Group Businesses and Sustainability

Main initiatives

SMBC Group’s Main Products and Service Related to Sustainability

SMBC Group proactively endeavors to solve environmental and social problems through the core businesses of the respective Group companies.

Green/Social/Sustainability Loans

SMBC

SMBC provides Green/Social/Sustainability Loans which the proceeds will exclusively applied to businesses that will contribute to resolving environmental and social issues.
Recently, Green Loans which the proceeds are solely used for business with environmental benefits, Social Loans which the proceeds are solely used for business contributing to positive social outcome, and Sustainability Loans which the proceeds are solely used for businesses that have both environmental and social aspects have been attracting attention globally.
Based on the standards such as Green Loan Principle, Social Loan Principle provided by international financial industry group, LMA*1, LSTA*2, APLMA*3, and Sustainability Bond Guideline provided by ICMA*4, we confirm that the finance requirements*5 are met and simultaneously obtain evaluation from external evaluation and rating agencies*6 while collaborating with customers.


(Japanese Only) Green/Social/Sustainability Loans 
  1. ※1  LMA(Loan Market Association)
    Loan market association in UK. Established in 1996 to promote growth in the loan markets in Europe, the Middle East and Africa (EMEA).
  2. ※2  LSTA(Loan Syndications and Trading Association)
    Financial services industry group to enhance the development and running the syndicated loan market in North American region.
  3. ※3  APLMA(Asia Pacific Loan Market Association)
    Loan Market Association in Asia Pacific region. Established in 1998 to promote growth in the syndicated loan markets in Asia Pacific. Headquartered in Hong Kong.
  4. ※4  ICMA (International Capital Market Association)
    Established in 1968 in Europe, with the aim of securing the soundness of the international bond market and promoting a functional, globally coherent cross-border bond market to ensure the stable financing necessary for sustainable economic growth and development.
  5. ※5  Finance requirements
    Certain requirements are set in SMBC for Green/Social/Sustainability finance and is based on "Green Loan Principles", "Social Loan Principles", Sustainability Bond Guideline. Details are as follows:
    (1) To satisfy all below criteria
     ①Use of Proceeds
     ②Process for Project Evaluation and Selection
     ③Management of Proceeds
     ④Reporting
    (2) To obtain evaluation from external evaluation and rating agencies
  6. ※6  External evaluation and rating agencies
    We currently adopt the three agencies and expecting to expand in the future.
    ●Japan Credit Rating Agency, Ltd.
    ●Rating and Investment Information, Inc.
    ●The Japan Research Institute, Limited

Sustainability Linked Loans

SMBC

Sustainability Linked Loans (hereinafter SLLs) are loans which incentivize the borrowers’ achievement of sustainability performance goals. These goals are set as sustainability performance targets (SPTs) and will be set in alignment with their ESG strategy.
SLL framework has been established in the international guideline, "Sustainability Linked Loan Principles". Sumitomo Mitsui Banking Corporation’s SLL is in line with this framework.


(Japanese only) Sustainability Linked Loans 

Housing Loan for Environmentally Friendly House (ZEH)

SMBC

ZEH stands for "net Zero Energy House", and promotion of ZEH is one of the concrete initiatives to realize carbon neutrality. Sumitomo Mitsui Banking Corporation offers special interest pricing for housing loan for ZEH, and support energy saving and decarbonization.


(Japanese Only) SMBC Green Project Housing Loans 

SDGs Bonds

SMBC Nikko

SDGs Bonds are issued to raise funds which will be exclusively applied to businesses that will contribute to SDGs or achieve the company’s KPIs*1 and SPTs*2 that contribute to the realization of the SDGs for the company as a whole. This includes bonds that will have positive impact on the environment and society and are in alignment with the principles which are accepted as a standard, such as principles and guidelines published by ICMA, as well as bonds issued by institutions whose entire business will contribute to SDGs with information on its positive impact properly disclosed.

  1. ※1  KPI (Key Performance Indicators) are quantifiable metrics used to measure the performance of selected indicators.
  2. ※2  SPTs (Sustainability Performance Targets) are target levels set by the issuer for KPIs at a specific point in time.

Green Bonds

Green Bonds are issued to raise funds in which the proceeds are exclusively applied to projects with environmental benefits, such as countermeasures for global warming, and renewable energies.


Social Bonds

Social Bonds are issued to raise funds in which the proceeds are exclusively applied to projects with positive social outcome, such as hygiene, welfare and education.


Sustainability Bonds

Sustainability Bonds are issued to raise funds in which the proceeds are exclusively applied to projects with green and/or social.


Sustainability-Linked Bonds

Sustainability-Linked Bonds are issued to raise funds in which the proceeds are unrestricted and financial and/or structural characteristics can vary, depending on whether the issuer achieves predefined Sustainability / ESG targets (SPTs).


Transition Bonds

Transition Bonds are issued to raise funds in which the proceeds are exclusively applied to projects with the issuer's long-term transition strategy to reduce greenhouse gas emissions and sustainability-linked bonds type whose proceeds are unrestricted.
Our record of underwriting can be found in the following link.


Sustainable Finance | SMBC Nikko Securities Inc. 

ESG Investing

SMBC Nikko

ESG Investing, is an investment method to take environment, social, and governance aspect into consideration in addition to financial aspect in its management process.
Please follow the link to find SMBC Nikko’s ESG/SDGs related funds.


(Japanese Only) SMBC Nikko Securities: ESG/SDGs Related Funds 

Responsible Investment

Sumitomo Mitsui DS Asset Management Company (SMDAM), as the primary asset management company arm of the Group, announced Principles of Fiduciary Duties and Sustainability as a universal and fundamental policy to guide and drive our business operations in line with our corporate philosophy, and provides high-quality asset management services to its clients while aiming to contribute to a sustainable society. SMDAM inscribes "Consideration of sustainability" in the investment policy and is striving to make a further enhancement of investment management capability, which includes incorporating ESG factors into the investment process.

Among ESG-integrated investment products, those products classified into "positive screening," "ESG-themed," and "impact" are defined as "ESG products". The investment balance of these products as of March 31, 2022, is ¥557.9 billion (on a non-consolidated basis).

Furthermore, SMDAM has identified a set of materiality as key management issues fundamental to sustainability. For issues related to climate change, SMDAM joined the Net Zero Asset Managers Initiative, a global initiative led by asset managers to achieve the long-term common goals set out in the Paris Agreement as we fully endorse the efforts by international community towards net-zero greenhouse gas (GHG) emissions by 2050. As a responsible institutional investor, SMDAM will continue to support the investee companies in their efforts to realize a decarbonized society.