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).
This agreement with that bank is subsequent to one signed in February 2023.

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.

The IHI Group announced Group Management Policies 2023 in May 2023. That initiative focuses on ESG management, key priorities being to transform IHI’s business to achieve strong, sustainable growth and adopt a corporate structure in response to operating environmental changes.

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 ronmental 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/

Reference link
Examples of Sustainable Finance at IHI
https://www.ihi.co.jp/csr/english/finance/index.html

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