Supporting clients’ efforts to address climate change through Mizuho Eco Finance
Mizuho Financial Group, Inc.
To promote the shift to a low–carbon society alongside our clients, in June 2019 Mizuho Bank and Mizuho Information & Research Institute launched Mizuho Eco Finance (Mizuho Environmentally Conscious Finance). This service evaluates the climate change initiatives of clients, allowing us to provide further support via financing and consulting to companies who are actively engaged in combating climate change.
Using an environmental assessment model developed by Mizuho Information & Research Institute featuring a globally accepted environmental verification and evaluation program, Mizuho Bank will provide financing to clients who meet a certain minimum score, and through monitoring by Mizuho Information & Research Institute, we will provide strategic advice to clients to improve and maintain their scores.
In June 2019 Mizuho Bank and Mizuho Information & Research Institute launched a service entitled Mizuho Environmentally Conscious Finance (“Mizuho Eco Finance”) through which we take action alongside our clients to advance the shift to a low-carbon society.
This service combines Mizuho’s banking capabilities (Mizuho Bank) and think tank capabilities (Mizuho Information & Research Institute) in order to provide clients with advice on how to efficiently and effectively reduce the environmental burden of their supply chain as a whole, in addition to providing capital raising support to assist them from a financial perspective in achieving the environmental/sustainability goals they have set. The financing provided by Mizuho Bank is linked to the achievement of a certain minimum score under the environmental assessment model developed by Mizuho Information & Research Institute which scores clients based on their initiatives, inclusion on environment-related indices, globally trusted environmental accreditation and evaluation criteria, and other factors. We also plan to use such loans as an opportunity to engage in dialogue with clients, including companies other than the borrower, providing support for reducing carbon emissions, both in terms of financing and advice regarding upstream and downstream supply chains.
At Mizuho, we are working to further incorporate sustainability initiatives into our strategy and strengthen our group-wide framework for promoting sustainability. Through Mizuho Eco Finance, we will draw on our expertise as a financial services group to proactively provide a wide range of solutions, including providing capital financing support to businesses that are contributing to the shift to a low-carbon society.
-Environmental assessment model
Mizuho Information & Research Institute is a leading provider of research and consulting for the public and private sectors and has been actively supporting clients’ environmental strategies, such as implementing the Recommendations of the TCFD1 and developing long-term environmental visions or plans, in addition to providing assistance for clients’ efforts to reduce carbon emissions such as calculating Scope 3 emissions and setting SBTs2. We will draw on the insight we have gained through these efforts to encourage companies to disclose information regarding climate change in an appropriate manner. We will score clients on a 5-tier scale (AA, A, B, C, D), primarily based on disclosure-focused standards encompassing the indicators below and other factors, with consideration given to the expectations of society and the characteristics of their industry. Companies or other organizations scoring an A or above are eligible for Mizuho Eco Finance.
The main criterion
(1) Support of the Task Force on Climate–related Financial Disclosures (TCFD)
(2) S&P/JPX Carbon Efficient Index 3 (Status of disclosure of carbon emissions)
(3) S&P/JPX Carbon Efficient Index (Decile classification)
(4) Has set officially approved Science Based Targets (SBT)3/ SBT commitments
(5) Content of long–term environmental vision for greenhouse gases4
(6) Greenhouse gas emissions (Scope 1+2)
(7) Greenhouse gas emissions (Scope 3)
1: The Task Force on Climate–related Financial Disclosures (TCFD)
The TCFD was established in 2016 by the Financial Stability Board in response to the request of the G20 Finance Ministers and Central Bank Governors.
2: Science Based Targets (SBT)
The Science Based Targets initiative encourages companies to engage in science–based target setting for the reduction of greenhouse gas emissions in order to meet the goals established in the Paris Agreement.
3: S&P/JPX Carbon Efficient Index
An index managed by S&P Dow Jones Indices and the Tokyo Stock Exchange, designed to measure the performance of companies in the Tokyo Stock Price Index (TOPIX), which is an indicator of Japanese market trends and serves as the underlying index. The S&P/JPX Carbon Efficient Index overweights or underweights those companies that have lower or higher levels of carbon efficiency, which is measured by amount of carbon emissions per unit of revenue.
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