NYK Signs Japan’s First ESG Management Support Loan

Mar. 20, 2019

Today, NYK entered into a 9 billion yen syndicated loan agreement in which the proceeds will be used solely for the purpose of funding environment-friendly projects. This is Japan’s first syndicated loan to be certified by Japan Credit Rating Agency Ltd. (JCR) with its highest ranking of “Green 1,” thus demonstrating the loan to be aligned with the core components of the Green Loan Principles.

1. Background

NYK’s medium-term management plan includes the group’s intent to integrate environmental, social, and governance (ESG) initiatives into management strategy by establishing new medium- to long-term environmental targets.*

To achieve these goals, NYK was the first company in the global shipping industry to issue labelled green bonds, and after that achievement in March 2018 the company received a green loan from Taiyo Life Insurance Company in December 2018. This new syndicated loan agreement is the third form of green financing for NYK for a total of over 20 billion yen.

2. Overview of the Syndicated Loan

Execution date of agreemen	March 20, 2019
Agent	MUFG Bank Ltd.
Total amount	9 billion yen
Use of proceeds	Installing scrubber systems **
JCR green loan evaluation	Green 1 (Highest ranking)
Participating financial institutions	Agricultural Cooperatives Shinkin Central Bank The Nishi-Nippon City Bank, Ltd. The Higo Bank Ltd. The Hiroshima Bank Ltd. MUFG Bank Ltd. The Musashino Bank Ltd. The Yamaguchi Bank Ltd. and others Total of ninefinancial institutions

In the green loan evaluation conducted by JCR, this syndicated loan was evaluated for its contribution to SDGs and targets. The detailed report by JCR can be found at the link below.

https://www.nyk.com/english/news/2019/__icsFiles/afieldfile/2019/03/19/report_E.pdf

In addition, this syndicated loan is the first “ESG management support loan” for MUFG Bank and Mitsubishi UFJ Research and Consulting Co. Ltd.(MURC), and NYK’s industry-leading ESG management received MURC’s highest ESG evaluation.

3. Future

NYK will promote green finance and continue its efforts to keep a wide range of stakeholders involved in the company’s proactive approach to environmental investment as the company makes efforts to contribute to realizing a sustainable society with technology that lessens environmental burdens.

* Medium- to long-term environmental targets
NYK’s reduction targets for GHG emissions are 30% per ton-kilometer by 2030 compared with a 2015 base year, and 50% per ton-kilometer by 2050 compared with the same base year. These targets have been recognized as science-based by the international Science Based Targets (SBT) initiative. Regarding its environmental initiatives and disclosure, NYK has been recognized as a global leader on corporate climate action by the environmental impact non-profit organization CDP, achieving a place on the Climate Change A List.

** Scrubber Systems
A system that effectively addresses the strengthened SOx (sulfur oxides) fuel regulation that will soon enter into force. Scrubber systems use seawater and chemicals to remove sulfur from ship exhaust gases, effectively eliminating 86 percent of SOx emissions.