Establishment of the World's First Framework for All Types of Sustainable Finance
Nov. 30, 2023
Tokyo, November 30, 2023 – Kawasaki Heavy Industries, Ltd. announced today that it has established a framework for all types of sustainable finance (Green, Transition, Transition Linked, Blue, Social, Sustainability Linked) (“the Master Framework”). The Master Framework together with the Positive Impact Evaluation Framework (“the PIF framework”) established in 2022 (*1) enables us to raise funds in any type of sustainable finance, which is the world’s first initiative.
Kawasaki has advanced sustainable finance’s initiatives in Japan, such as the establishment of the PIF framework and Sustainability Linked Loan (SLL) Framework Template (*2) since 2021. The Master Framework unifies these frameworks except the PIF framework, and newly adds Transition, Transition Linked, and Blue. By doing these initiatives Kawasaki can accommodate any type of sustainable finance. In formulating the Master Framework, Mizuho Securities Co., Ltd. has provided support as a structuring agent, and a second-party opinion was obtained from Japan Credit Rating Agency, Ltd., to ensure transparency and objectivity.
Types of sustainable finance in the Master Framework and standards/guidelines
| Types | Standards/Guidelines | Procurement Record |
|---|---|---|
| Green | Green Bond Principles (2021 edition), Green Loan Principles (2023 edition), Green Bond Guidelines (2022 edition), Green Loan Guidelines (2022 edition) |
Jul. 2021 Jul. 2022 (Bond) |
| Transition(*3), Transition Linked |
Climate Transition Finance Handbook (2023 edition), Basic Guidelines on Climate Transition Finance, etc. |
Newly added |
| Blue | A Practitioner’s Guide for Bonds to Finance the Sustainable Blue Economy, Guidelines for Blue Finance, Green Bond Principles (2021 edition), Green Loan Principles (2023 edition), Green Bond Guidelines (2022 edition), Green Loan Guidelines (2022 edition) |
Newly added |
| Social | Social Bond Principles (2023 edition), Social Loan Principles (2023 edition), Social Bond Guidelines (2021 edition) |
Jul. 2021 (Bond) |
| Sustainability Linked | Sustainability Linked Bond Principles (2023 edition), Sustainability Linked Loan Principles (2023 edition), Sustainability Linked Bond Guidelines (2022 edition), Sustainability Linked Loan Guidelines (2022 edition) |
Mar. 2022～ (Loan) |
*Please refer to the Master Framework for more details such as project classification and Sustainability Performance Targets (SPT).
*In the case of sustainability finance (Green/Social), Sustainability Bond Guidelines are also applied.
Type of sustainable finance outside the Master Framework and standards
| Types | Standards | Procurement Record |
|---|---|---|
| Positive Impact Finance | The Principles for Positive Impact Finance (UNEP FI) |
Aug. 2021～ (Loan) |
*For details on the goals and indicators (KPIs) to be set, please refer to the following:
https://global.kawasaki.com/en/corp/ir/finance/pdf/pif_02.pdf
The Master Framework will not only help Kawasaki promote sustainable finance and achieve its goals (*4), but also set a precedent for fundraisers to have their framework which can avoid discontinuity and discrepancy between their policy and their individual sustainable finance, thereby encouraging fundraisers to use sustainable finance in accordance with their objectives at a reduced cost. It is also expected to contribute to the promotion of sustainable finance investments and loans by enabling investors and lenders to grasp their corporate initiatives and materiality objectively and transparently.
Under the Group Vision 2030 "Trustworthy Solutions for the Future,"Kawasaki aims to make available — in a timely manner — innovative solutions which accommodate an ever-changing society in order to create a hopeful future, as well as acting outside of organizational and divisional boundaries and taking up challenges to expand the horizons of its potential for further growth. Supported by promoting sustainable finance, Kawasaki as a leading company of this field is going to contribute to the expansion of sustainable finance in Japan and all over the world as well.
| *1 | The Positive Impact Evaluation Framework https://global.kawasaki.com/en/corp/ir/finance/pif.html |
| *2 | The Sustainability Linked Loan Framework Template (the SLL Template) https://global.kawasaki.com/en/corp/ir/finance/sll.html |
| *3 | Adopted as the first “Subsidy for global warming countermeasures promotion project” in FY 2023 by the Ministry of Economy, Trade and Industry |
| *4 | Kawasaki has set a sustainable finance target as “50% of long-term debt in FY 2030 and 100% in FY 2050". |
Related Links
Kawasaki’s Sustainable Finance Master Framework (Japanese only)
https://www.khi.co.jp/pressrelease/news_231130-1.pdf
Website of Japan Credit Rating Agency, Ltd. (Japanese only)
https://www.jcr.co.jp/greenfinance/
“Subsidy for global warming countermeasures promotion project” (Japanese only)
https://www.meti.go.jp/policy/energy_environment/global_warming/transition_finance.html
Kawasaki’s Group vision 2030
https://global.kawasaki.com/en/groupvision2030/
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