Green, Social, and Sustainability Bonds
Between September 2016 and December 2019, MUFG issued seven Green Bonds and one Social Bond for a total amount of US$2.7 billion equivalent. Our recurrent issuance of these bonds represented a step forward in our relentless effort to contribute to a sustainable environment and society through our capital markets activities.
To this end, the net proceeds from our Green Bonds are allocated to projects which address environmental issues, such as renewable energy or energy efficiency projects, while those from Social Bonds are allocated to projects that tackle important social issues such as affordable housing, health and education. Finally, the net proceeds from Sustainability Bonds are allocated to a combination of both environmental and social projects.
The eligibility of environmental and social projects for financing is determined by a set of selection criteria outlines in MUFG’s Green, Social, and Sustainability Bond Framework presented below.
The eligibility of environmental and social projects for financing is determined by a set of selection criteria outlines in MUFG’s Green, Social, and Sustainability Bond Framework presented below.
Green, Social, and Sustainability Bond Framework
MUFG has established a Green, Social, and Sustainability Bond Framework in line with the Green Bond Principles*1, the Social Bond Principles*1, and the Sustainability Bond Guidelines*1 issued by the International Capital Market Association (ICMA), and has obtained a second party opinion from Sustainalytics, an internationally recognized external verifier.
(*1)
This is a voluntary guideline formulated by the International Capital Markets Association (ICMA) to promote the transparency, disclosure, and reporting of green, social, and sustainability bonds and to promote market order. For more information, please refer to the official ICMA web site.
This is a voluntary guideline formulated by the International Capital Markets Association (ICMA) to promote the transparency, disclosure, and reporting of green, social, and sustainability bonds and to promote market order. For more information, please refer to the official ICMA web site.
1. Use of Proceeds
The net proceeds from the sale of Green, Social, and Sustainability Bonds issued by MUFG are lent to MUFG Bank, Ltd. (“the Bank”), a subsidiary of MUFG, and the Bank allocates amounts equivalent to the net proceeds to Eligible Projects as defined by the criteria presented below.
- Eligible Green Projects
·Green Buildings
Financing eligible green buildings*2 owned by J-REIT (Japanese Real Estate Investment Trust)
(※2)
Real-estate properties which have earned one of the following:
Real-estate properties which have earned one of the following:
- Gold or Platinum rating under LEED
- Excellent or Outstanding rating under BREEAM
- A or S rating under CASBEE
- 4 or 5 stars under DBJ Green Building Certification
·Renewable Energy
Financing of eligible renewable energy projects (solar thermal power generation, solar photovoltaic power generation and onshore and offshore wind farm projects) which are certified as eligible to funding*4 based on environmental and social impact assessments performed by the Bank in accordance with the Equator Principles*3.
(※3)
The Equator Principles is a financial industry benchmark for identifying, assessing and managing environmental and social risks and impacts in large-scale projects, which is intended to serve as a common baseline and framework for financial institutions acting as lenders or financing advisers for clients.
The Equator Principles is a financial industry benchmark for identifying, assessing and managing environmental and social risks and impacts in large-scale projects, which is intended to serve as a common baseline and framework for financial institutions acting as lenders or financing advisers for clients.
(※4)
Eligible projects need to be categorized as Category B or Category C under the Equator Principles.
Eligible projects need to be categorized as Category B or Category C under the Equator Principles.
- Eligible Social Projects
·Healthcare
Financing of public hospitals (domestic and overseas) and domestic hospitals run by a social medical care corporation or a social welfare corporation that will ensure accessibility to people living below the poverty line.
·Education
Financing of public schools that will ensure accessibility to people living below the poverty line.
·Employment Generation
Loans*5 of the Bank that contribute to the creation of jobs as part of the reconstruction activities after natural disasters, including earthquakes and typhoons.
(※5)
Priority to be given to loans to operators using the Scheme for Compensation for Interest Rates on Special Zones for Reconstruction*6 or Subsidy Program for New Business Establishment in the Areas Recovering from Tsunami and Nuclear Disaster towards Employment Creation*7.
(※6)
This system supports the smooth implementation of projects by providing interest subsidies for five years to finance core projects of reconstruction promotion plans prepared by local governments and approved by the national government for the reconstruction of the disaster-stricken areas.
(※7)
Subsidies for the purpose of promoting industrial reconstruction and regional economic revitalization, mainly in areas where evacuation orders have been lifted, and through job creation, in areas such as the tsunami disaster zones that suffered particularly great damage from the Great East Japan Earthquake and evacuation order zones that suffered enormous damage from the nuclear disaster.
·Affordable housing
Financing of public housing suppliers who are registered with the Regulator of Social Housing in England.
2. Process for Project Evaluation and Selection
MUFG has evaluated and selected Eligible Projects in accordance with the pre-determined criteria described above. In the selection process of Eligible Green Projects, financing to J-REIT which have achieved the top three ratings of MURC's ESG evaluation*8 has been preferentially selected when applying loans as “ESG evaluation loans for J-REIT.”
(*8)
Mitsubishi UFJ Research and Consulting has developed an ESG evaluation methodology, “MUFG ESG evaluation for J-REIT supported by JCR.”For more information, please refer to the official MURC web site (in Japanese).
Mitsubishi UFJ Research and Consulting has developed an ESG evaluation methodology, “MUFG ESG evaluation for J-REIT supported by JCR.”For more information, please refer to the official MURC web site (in Japanese).
3. Management of Proceeds
MUFG has allocated amounts equivalent to the net proceeds to funding Eligible Projects through the Bank and continuously monitors the allocated funds thereafter. Pending allocation, any unallocated funds are held in cash, cash equivalents and/or marketable securities.
4. Reporting
MUFG plans to disclose the allocation of funds on its website generally on an annual basis*9. Management assertions on the allocation of funds and reports published by an external review provider will be disclosed annually until all the net proceeds from the issuance of Green, Social, and Sustainability Bonds have been fully allocated to Eligible Projects through the Bank.
(*9)
MUFG may defer this disclosure as long as the funds are fully allocated to Eligible Green Projects and the allocation of the funds to individual projects that constitute Eligible Green Projects remains unchanged.
MUFG may defer this disclosure as long as the funds are fully allocated to Eligible Green Projects and the allocation of the funds to individual projects that constitute Eligible Green Projects remains unchanged.
We have committed to publishing an impact report annually, throughout the term of the bond, containing the following impact metrics:
- Eligible Green Projects
·Green Building: CO2 emission reductio
·Renewable Energy: kWh of power generated for renewable energy projects and CO2 emission reduction
·Renewable Energy: kWh of power generated for renewable energy projects and CO2 emission reduction
- Eligible Social Projects
·Healthcare: The number of patients receiving the medical services or the number of hospital beds
·Education: The number of students receiving the educational services
·Employment Generation: The number of employments created and the number of loans provided to businesses including ones using the ‘System for Provision of Compensation for Interest Rates on Special Zones for Reconstruction’ or ‘Subsidy Program for New Business Establishment in the Areas Recovering from Tsunami and Nuclear Disaster towards Employment Creation’
·Affordable housing: The number of housing units provided
·Education: The number of students receiving the educational services
·Employment Generation: The number of employments created and the number of loans provided to businesses including ones using the ‘System for Provision of Compensation for Interest Rates on Special Zones for Reconstruction’ or ‘Subsidy Program for New Business Establishment in the Areas Recovering from Tsunami and Nuclear Disaster towards Employment Creation’
·Affordable housing: The number of housing units provided
Detail information on the bond
Green Bonds
| Pricing Date | Issue Date | Issue Amount (Mio) | Tenor | Second Opinion | Reporting |
|---|---|---|---|---|---|
6-Sep-16
|
Issue Date
13-Sep-16
|
Issue Amount (Mio)
USD 500
|
Tenor
7year
|
Second Opinion
|
Reporting
|
19-Jan-18
|
Issue Date
26-Jan-18
|
Issue Amount (Mio)
EUR 500
|
Tenor
5year
|
Second Opinion
|
Reporting
|
1-Oct-18
|
Issue Date
9-Oct-18
|
Issue Amount (Mio)
EUR 500
|
Tenor
5year
|
Second Opinion
|
Reporting
|
7-Dec-18
|
Issue Date
18-Dec-18
|
Issue Amount (Mio)
USD 120
|
Tenor
10year
|
Second Opinion
|
Reporting
|
16-Jul-19
|
Issue Date
19-Jul-19
|
Issue Amount (Mio)
EUR 500
|
Tenor
10year
|
Second Opinion
|
Reporting
-
|
24-Sep-19
|
Issue Date
1-Oct-19
|
Issue Amount (Mio)
AUD 400
|
Tenor
5year
|
Second Opinion
|
Reporting
-
|
24-Sep-19
|
Issue Date
1-Oct-19
|
Issue Amount (Mio)
AUD 100
|
Tenor
5year
|
Second Opinion
|
Reporting
-
|
Social Bonds
| Pricing Date | Issue Date | Issue Amount (Mio) | Tenor | Second Party Opinion | Reporting |
|---|---|---|---|---|---|
6-Dec-19
|
Issue Date
12-Dec-19
|
Issue Amount (Mio)
USD90
|
Tenor
10year
|
Second Party Opinion
|
Reporting
-
|
(*)
All information contained in this communication prepared by MUFG has been provided for informational purposes only and is not a solicitation of any offer to buy or sell any security or other financial instrument. Investing in securities involves risks, and, when you invest in securities, there is always the potential of losing all or a portion of your invested money. Before acting on any information contained in this communication, you should carefully consider whether it is suitable for your particular circumstances and objectives, including but not limited to whether it is consistent with your understanding or expectation with respect to any details of specific Green, Social, and Sustainability Bonds relevant to you, and, if necessary, seek professional advice.
All information contained in this communication prepared by MUFG has been provided for informational purposes only and is not a solicitation of any offer to buy or sell any security or other financial instrument. Investing in securities involves risks, and, when you invest in securities, there is always the potential of losing all or a portion of your invested money. Before acting on any information contained in this communication, you should carefully consider whether it is suitable for your particular circumstances and objectives, including but not limited to whether it is consistent with your understanding or expectation with respect to any details of specific Green, Social, and Sustainability Bonds relevant to you, and, if necessary, seek professional advice.
(As of December, 2019)