The Japanese shipping company Nippon Yusen Kabushiki Kaisha (NYK) received Japan’s first loan related to environmental sustainability (environmental interest rate). The five-year syndicated loan linked to sustainability amounts to JPY 50 billion (USD 456.2 million). Provided by MUFG Bank together with Norinchukin Bank, Mizuho Bank and Sumitomo Mitsui Banking Corporation.
As explained, this is Japan’s first advanced loan that allows conditions such as the loan interest rate to be adjusted according to the borrower’s corporate social responsibility (CSR) performance.
The loan is said to encourage growth and sustainable economic activities by linking the price of the loan with the company’s performance, which is determined annually by the score provided by the Carbon Disclosure Project (CDP). As long as the high CDP ratings are maintained, the company’s CDP rating will not cause the loan interest rate to change before the repayment deadline, according to NYK.
According to the new medium-term management plan “Staying Ahead 2022 with Digitalization and Green” announced in 2018, NYK integrated environmental, social and governance principles (ESG) into management strategies to boost the sustainable development of society and the enrichment of the corporate enterprise. value.
According to the company’s medium-term management plan, NYK has three basic strategies: optimize the business portfolio, expand businesses that ensure stable freight rates and increase efficiency and create a new value, with “Digitization” and “Green” as a key to the third strategy.
“The purpose of this loan is for NYK to promote its ESG management and motivate the company to maintain a high CDP score in response to climate change through commercial activities,” said NYK.
The internalization of the external negativities of one of the oldest industries in the world. Trade, the engine of development, now includes environmental sustainability as a variable in the capitalization of the business. We will see in the future more policies inclined to take responsibility and quantify the negative impact on the environment.