Green Financing

What is Green Financing?

At ITOCHU Advance Logistics Corporation (“IAL”), green financing refers to financing (i.e., issuance of bonds (green bonds) and/or procurement of loans (green loans)) for which use of proceeds is limited to environmentally-conscious projects.
IAL intends to use the proceeds from green financing for implementing sustainability-promoting initiatives in line with its “Basic Sustainability Policy”, and intends to proactively recognize required level of environmental, social, and governance (ESG) practices through a dialogue with investors and apply such knowledge to its asset management strategy.

Green Financing Framework

In order to ensure that the proceeds are used solely for projects with positive environmental impact, IAL has established the following green financing framework ( “Framework”) and procures and manages the proceeds in accordance with such Framework.

◆Third-party evaluation

In order to make sure that the Framework is in compliance with the “Green Bond Principle 2018” established by the International Capital Market Association (ICMA), the “Green Bond Guideline 2017” established by the Ministry of the Environment of Japan, and the “Green Loan Principles” established by the Loan Market Association (LMA) and the Asia Pacific Loan Market Association (APLMA), IAL had the Framework evaluated by a third-party institution, the Japan Credit Rating Agency, Ltd. (“JCR”) and received the highest “Green 1 (F)” status in the “JCR Green Finance Framework Evaluation” (please see attachment below):

News Release by JCR

◆Use of proceeds

The proceeds from green financing are applied in its entirety to any one or combination of the following:

  • Costs of acquisition of green eligible assets (Note);
  • Repayment of loans borrowed for acquisition of green eligible assets; and
  • Redemption of investment corporation bonds issued for acquisition of green eligible assets
  • For details of green eligible assets, please refer to the “eligibility criteria” below.

◆Eligibility criteria

The green eligible assets are selected from assets for which IAL has obtained or plans to obtain one or more of the following third-party certifications:

  • (i) 5 or 4 stars of the DBJ Green Building Certification;
  • (ii) S or A rank of CASBEE (Comprehensive Assessment System for Built Environmental Efficiency) (Note 5); and
  • (iii) 5 or 4 stars of BELS (Building-Housing Energy-efficiency Labelling System) (Note 6)

◆Management of proceeds

IAL manages the proceeds from green financing so that the outstanding proceed amount will not exceed the amount of green eligible liabilities. (Note)

  • The amount of green eligible liabilities is calculated by taking (i) the total amount of green eligible assets and multiplying the same by (ii) loan to value (LTV) ratio of IAL as of the end of the immediately preceding fiscal period.

◆Reporting

1. Reporting on status of use of proceeds

IAL discloses the status of use of the proceeds from green financing on its website and update the status on an annual basis so long as any of the proceeds are outstanding.

Status of use of proceeds from green bonds

As of Jan. 16, 2020

Name Issuance date Redemption date Issuance amount
(JPY Million)
Amount of used proceeds
(JPY Million)
Amount of unused proceeds
IAL 1st Unsecured Investment Corporation Bonds
(IAL Green Bonds)
December 12, 2019 December 12, 2024 1,500 1,500 0

2. Reporting on outstanding amount of proceeds from green financing

IAL reports, on an annual basis, the total value of green assets, the amount of green eligible liabilities, and outstanding amount of the proceeds from green financing as of the end of January each year, so long as any of the proceeds are outstanding.

As of Jan. 16, 2020

Property Name Acquisition price
(JPY Million)
DBJ Green Building Certification CASBEE BELS
L-2 i Missions Park Kashiwa 6,140 ★★★★
L-3 i Missions Park Noda 12,600 ★★★★
L-4 i Missions Park Moriya 3,200 ★★★★ ★★★★★
L-5 i Missions Park Misato 6,100 ★★★★ ★★★★
L-6 i Missions Park Chiba-Kita 2,600 ★★★★★
L-7 i Missions Park Inzai 22,140 ★★★★★ ★★★★★
Total amount of green eligible assets
(based on acquisition price)
52,780
Total amount of portfolio properties
(based on acquisition price)
58,830
Ratio of green eligible assets 89.7%

As of Jan. 16, 2020

Total amount of green eligible assets 52,780 million yen
LTV (total assets basis) (As of July 2019) 39.5%
Amount of green eligible liabilities
((i) Total amount of green eligible assets, multiplied by (ii) total assets LTV)
20,848 million yen
Total outstanding proceeds from green financing 1,500 million yen
- Proceeds from green bonds 1,500 million yen
- Proceeds from green loans 0yen

Green Bonds

As of Jan. 16, 2020

Name Issuance amount
(JPY Million)
Interest
rate
Issuance date Redemption date Use of proceeds
IAL 1st Unsecured Investment Corporation Bonds
(IAL Green Bonds)
1,500 0.300% December 12, 2019 December 12, 2024 Repayment of (post-refinance) loans procured at the time of acquisition of i Missions Park Inzai

Green Loans

As of Apr. 1, 2020

Lender Borrowing amount
(JPY Million)
Interest
rate
Borrowing date Repayment date Use of proceeds
1,500 +0.39% March 31, 2020 March 31, 2028
  • グリーンローン注釈(英文)

3. Environmental Impact Reporting

As environmental impact reporting, IAL annually discloses following metrics on its website:

  • The number of, level of environmental certifications awarded on, and total floor area of green eligible assets; and
  • Following performance data (such data is not disclosed separately for green eligible assets, and is disclosed for the entire portfolio, with ratio of covered assets):
  • (i) Total energy consumption;
  • (ii) Total Co2 emissions;
  • (iii) Total water consumption; and
  • (iv) Total waste generation

For the environmental impact reporting, please click here.

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