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Sustainable Finance

Sustainable Finance

Sustainable Finance Framework

Mitsubishi HC Capital Inc. ("the Company") was born in April 2021 from the business integration of Mitsubishi UFJ Lease & Finance and Hitachi Capital. The Company sets "Our 10-year Vision" as "Together we innovate, challenge and explore the frontiers of the future." to realize "Our Mission", which is its long-term goal. The Company addresses social issues that can be solved only by itself through approaches such as SX (sustainability transformation) and DX (digital transformation) with its customers and partners, anticipating the changes in the society and business environment including changing global industry structures, accelerating digitalization and the increasing importance of sustainability.

To accelerate these initiatives, Mitsubishi HC Capital Group ("the Group") has developed "Sustainable Finance Framework" ("the Framework"). The Framework is designed to be aligned with the following Principles and Guidelines via key pillars (i.e., When specifying the use of proceeds; Use of Proceeds / Process for Project Evaluation and Selection / Management of Proceeds / Reporting. When not specifying the use of proceeds; Selection of KPI / Calibration of SPT / Bond/Loan Characteristics / Reporting / Verification). The Group has obtained a Second-Party Opinion from DNV BUSINESS ASSURANCE JAPAN K.K., an independent external reviewer, that the Framework is aligned with the principles and guidelines described below.

  • Green Bond Principles 2021 (ICMA*1)
  • Social Bond Principles 2023 (ICMA)
  • Sustainability Bond Guidelines 2021 (ICMA)
  • Sustainability-Linked Bond Principles 2024 (ICMA)
  • Green Bond and Sustainability-Linked Bond Guidelines 2022 (Ministry of the Environment of Japan)
  • Green Loan and Sustainability-Linked Loan Guidelines 2022 (Ministry of the Environment of Japan)
  • Social Bond Guidelines 2021 (Financial Services Agency of Japan)
  • Green Loan Principles 2023 (LMA*2, APLMA*3, LSTA*4)
  • Social Loan Principles 2023 (LMA, APLMA, LSTA)
  • Sustainability-Linked Loan Principles 2023 (LMA, APLMA, LSTA)
  • International Capital Market Association: ICMA
  • Loan Market Association: LMA
  • Asia Pacific Loan Market Association: APLMA
  • Loan Syndications and Trading Association: LSTA

Sustainability-Linked Bond

16th Unsecured Bond (Sustainability-Linked Bond)

  1. Overview
    1. Total Issue Amount JPY 20 billion
    2. Interest Rate 1.141%
    3. Issue Price JPY 100 per JPY 100 bond face value
    4. Redemtion Method and Maturity Date Bullet repayment due on January 23, 2030 (5 years).
    5. Issue Date January 23, 2025
    6. Rating AA (Japan Credit Rating Agency, Ltd.)
    AA (Rating and Investment Information, Inc)
    7. KPI The reduction rate of GHG emissions in Scope1 and 2
    8. SPT (The determination date : October 31, 2029)
    The 45% reduction of GHG in Scope 1 and 2 by FY2028 (Base year : FY 2019)
    9. Bond Characteristics This bond specifies that, if a third-party verified report stating that the SPT has been achieved is not received by the determination date. Donations equivalent to 0.1% of the issuance amount of this bond will be made to qualified donation recipients by the redemption date. Qualified donation recipients are public interest incorporated associations, public interest foundations, general foundations, international organizations, local government-certified non-profit organizations, local governments, national and public university corporations, school corporations, research institutions, and similar organizations related to the improvement of SPT that has not been achieved.
    The recipients of the donations will be determined with the necessary approvals prior to the redemption date.
  2. Publicly declared investors
    Investors who declared that they would invest in this sustainability bond (alphabetical order)
    • Aichi Bank, Ltd.
    • The Aichiken iryo Credit Cooperative
    • Asset Management One Co., Ltd.
    • Chiba Shinkin Bank
    • JA Echigo Chuetsu
    • JA Kanagawaseisho
    • JA Yokohama
    • Japan Earthquake Reinsurance Co.,Ltd.
    • Kobeshi Shokuin Shinkumi Bank
    • Nagano Shinkin Bank
    • Norinchukin Zenkyoren Asset Management Co., Ltd.
    • Ogakiseino Shinkin Bank
    • Saitama Medical University
    • Sumitomo Mitsui Trust Asset Management Co., Ltd.
    • TAJIMA SHINKIN BANK
    • The Tono Shinkin Bank

Sustainability Bond

Sustainability bonds are types of bonds where the proceeds will be exclusively applied to projects expected to contribute to the resolution of both environmental and social issues.

8th Unsecured Bond (Sustainability Bond)

  1. Overview
    1. Total Issue Amount JPY 10 billion
    2. Interest Rate 0.454%
    3. Issue Price JPY 100 per JPY 100 bond face value
    4. Redemtion Method and Maturity Date Bullet repayment due on July 27, 2028 (5 years).
    5. Issue Date July 27, 2023
    6. Use of Proceeds New loans, investments, or refinancing for the development or acquisition of properties (Green Buildings), Nursing reward and Medical fee receivable factoring, etc.
    7. Rating AA (Japan Credit Rating Agency, Ltd.)
    AA-(Rating and Investment Information, Inc)
  2. Publicly declared investors
    Investors who declared that they would invest in this sustainability bond (alphabetical order)
    • Aichibitou Japan Agricultural Cooperatives
    • Asset Management One Co., Ltd.
    • Choshi Shoko Shinkumi Bank
    • The Higashi-Nippon Bank, Limited
    • JA-GREENNAGANO
    • Japan Earthquake Reinsurance Co., Ltd.
    • KEISHICHO SHOKUIN CREDIT COOPERATIVE
    • THE KOFU SHINKIN BANK
    • KOITO MANUFACTURING CO., LTD.
    • Nagano Shinkin Bank
    • The Neo First Life Insurance Company, Limited
    • THE NISHIO SHINKIN BANK
    • Nissay Asset Management Corporation
    • North Pacific Bank, LTD.
    • Organization for Small & Medium Enterprises and Regional Innovation, JAPAN
    • SAISON AUTOMOBILE&FIRE INSURANCE CO.,LTD.
    • Sumitomo Mitsui Trust Asset Management Co., Ltd.
    • Tajima Shinkin Bank
    • TOKAI TELEVISION BROADCASTING CO., LTD.
    • The Tokyotoshokuin Credit Cooperative
    • YAMANASHIKENMINSHINYOUKUMIAI
  3. Reporting

Green Bonds

Green bonds are straight corporate bonds issued to raise funds exclusively for projects that benefit the environment, such as renewable energy businesses. In 2018, Mitsubishi UFJ Lease & Finance became the first leasing company to issue a green bond by domestic public offering. In 2019, Hitachi Capital also issued a green bond. We have obtained opinions on these green bonds from third-party certification bodies, and these bonds satisfy Green Bond Principles of the International Capital Market Association (ICMA).

Going forward, we will continue to implement wide-ranging activities aimed at realizing a sustainable, eco-friendly society while supporting capital investment aimed at addressing global warming and other environmental problems.

The Mitsubishi UFJ Lease & Finance Green Bond

1st Green Bond (Domestic Unsecured Straight Bond)

  1. Overview
  2. External evaluation of eligibility
  3. Publicly declared investors
    • Investors who declared that they would invest in this green bond (alphabetical order)
    • Higashi-Nippon Bank Ltd.
    • Kansai University
    • NN Life Insurance Co. Ltd.
    • Saitama Medical University
    • The Juroku Bank, Ltd.
    • Tokio Marine Asset Management Co., Ltd.
  4. Reporting
    • Allocation
      The proceeds from the 1st Green Bond (Domestic Unsecured Straight Bond) issued April 17, 2018 were fully allocated to the financing of eligible green projects. The eligible green projects comprised 5 solar power generation projects in Japan that meet all the eligibility criteria (as of March 31, 2022).
    • Environmental impact
      The carbon dioxide emission reduction realized by the 5 eligible green projects amounts to approximately 12,000 tons per year, and the projects generate approximately 24,000,000 kWh annually (as of March 31, 2022; theoretical values based on output standards).
    • Annual review (March 2019)
      A third-party certification body evaluated compliance with the bond framework, finding that the allocation of the bond proceeds and reporting met the required standards.

Hitachi Capital Green Bond

77th Unsecured Straight Bond (Green Bond)

  1. Overview
  2. External evaluation of eligibility
  3. Publicly declared investors
    • Investors who declared that they would invest in this green bond (alphabetical order) (as of February 22, 2019)
    • Amagasaki Shinkin Bank
    • Daiwa SB Investments Ltd.
    • Shijonawate Gakuen
    • Japan Post Insurance Co., Ltd.
    • Jodo Shu
    • Juroku Bank, Ltd.
    • Saitama Medical University
    • Seikei Gakuen
    • Shigaken Shinyoukumiai
    • SUMITOMO LIFE INSURANCE COMPANY
    • The Sugamo Shinkin Bank
    • Western Asset Management Company Ltd.
  4. Reporting
    • Allocation
      The proceeds from the Green Bond issued February 28, 2019 were fully allocated to partially funding capital investment in a solar power generation project in Niimi City, Okayama, which the Group operates as the power producer.
    • Environmental impact
      The carbon dioxide emission reduction realized by the solar power generation green project in Niimi City, Okayama, amounts to approximately 17,000 tons per year, and the project generates approximately 40,000,000 kWh annually (as of February 15, 2023; theoretical values based on output standards).

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