IHI announces today that it recently concluded a “Positive Impact Evaluation” (hereinafter “this evaluation”) and “Positive Impact Finance (with unspecified use of funds)” loan agreement (hereinafter “this agreement”) with Sumitomo Mitsui Trust Bank, Limited (President: Kazuya Oyama; hereinafter “SuMi TRUST Bank”)  in line with the Principles for Positive Impact Finance (*1) released by the United Nations Environment Programme Finance Initiative (hereinafter “UNEP FI”) (*2).

Positive Impact Finance (hereinafter “PIF”) is a type of loan agreement intended to support corporations to comprehensively analyze and evaluate the impacts (both positive and negative) of business activities related to the environment, society and economy on an ongoing basis. The most notable feature of PIF is that the degree of contribution from corporate activities, products and services in achieving Sustainable Development Goals (SDGs) is used as an evaluation indicator and monitored based on publicly disclosed information, and that we support corporations’ activities to achieve these goals through engagement. 

This agreement has obtained a third-party opinion (*3) from Japan Credit Rating Agency, Ltd. (President: Shokichi Takagi) regarding the compliance of the procedures related to this agreement’s evaluation to the Principles as well as the rationality of the evaluation indicators.

November 2021 saw the announcement of IHI Group ESG Management. This was to guide efforts to materialize socially and environmentally sound operations centered on ESG values that are pivotal to Project Change, a medium-term management plan. IHI is striving to resolve social issues by contributing to better lives, cutting carbon dioxide emissions, and preventing and mitigating disasters to create economies in which nature and technology are in harmony. 

IHI will continue to treasure to engagement with society and other stakeholders to attain ESG management, and will keep endeavoring to resolve social issues and create new value.
 

(*1) The Principles for Positive Impact Finance
The Principles for Positive Impact Finance was developed by UNEP FI in January 2017 as a financial framework for achieving the SDGs. Companies disclose the level of contributions to achieving SDGs through KPIs. Banks then provide funding by evaluating the positive impact observed from these KPIs that is intended to guide the borrowers to increase the positive impact and reduce the negative impact.
The lending bank, as a responsible financial institution, will check if the impact is continuing or not by monitoring the indicators.

(*2) The United Nations Environment Programme Finance Initiative (UNEP FI)
The United Nations Environment Programme (UNEP) is an executive body for implementing the “Human Environment Declaration” and the “International Environmental Action Programme”, established in 1972 as a subsidiary body to the United Nations system. UNEP FI represents a broad as well as a close partnership between UNEP and more than 200 global financial institutions. Since its establishment in 1992, UNEP FI has been working in concert with financial institutions, policy/regulatory authorities to transform itself into a financial system that integrates economic development and ESG considerations.

(*3) For the independent opinion from Japan Credit Rating Agency, Ltd., please visit:
https://www.jcr.co.jp/en/greenfinance/

【Overview of Positive Impact Evaluation】
In concluding this agreement, the following initiatives of IHI are assessed both qualitatively and quantitatively as initiatives that particularly have an impact on achieving SDGs.

Theme	Details	Key Performance Indicators (KPIs)	SDGs
Help materialize a carbon-neutral economy	Efforts to achieve carbon neutrality in value chain by 2050	(a) Develop and commercialize ammonia combustion equipment Goal ・Develop and commercialize an ammonia co-firing burner that cuts greenhouse gas emissions by 20% by fiscal 2024 ・Develop and commercialize a 2,000-kilowatt-class ammonia-fired gas turbine that lowers greenhouse gas emissions by 100% by fiscal 2025 KPI Progress with efforts to develop and commercialize ammonia combustion facilities (b) Develop and commercialize methanation technology Goal Surpass existing technologies by achieving energy conversion efficiency of 60% to 65% (including auxiliary equipment losses) from methane synthesis (10 Nm³/h) by 2030, exceeding that of existing technologies. KPI Progress with efforts to develop and commercialize methanation technology (c) Materialize green transformation Goal Materialize and commercialize collaborative solutions through open collaboration among industry, academia, government, and finance to achieve green transformation KPI Progress in materializing and commercializing collaborative solutions  through open collaboration among industry, academia, government, and finance to achieve green transformation
Cut carbon dioxide emissions	Reduce factory and office carbon dioxide emissions by employing energy-saving equipment, upgrading aged facilities, and adopting ammonia and other new in-house technologies	Goal ・Reduce carbon dioxide emissions in keeping with government policy (by 46% from fiscal 2013 level by fiscal 2030) ・Reduce carbon dioxide emissions per unit of production at factories and business sites by 1% from a year earlier KPI Carbon dioxide emission intensity (metric tonnes per 100 million yen)
Materialize a sustainable economy	Reduce environmental impacts of factories, offices, and other facilities	(a) Comply with environmental laws and regulations Goal Eliminate violations of environmental laws and regulations and severe environmental accidents KPI Number of violations of environmental laws and regulations Number of severe environmental accidents (b) Pursuing waste 3Rs (reduce, reuse, and recycle) Goal Generated waste not to exceed fiscal 2018 level KPI Waste volumes (metric tons)  (c) Managing water usage appropriately  Goal Water intake not to exceed fiscal 2018 level KPI Water intake (thousands of cubic meters)
Build a diverse and inclusive workforce	Foster diversity	Goal Raise female representation on Board of Directors to at least 30% by 2030 KPI Percentage of directors who are women

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