IHI Releases Sustainable Finance Framework
IHI today announces the release of its Sustainable Finance Framework (see note *1).
The company formulated its Transition Bond Framework in March 2022, issuing its first transition bond in June that year.
IHI lifted its greenhouse gas emissions reduction target in April 2023. It now looks to halve its Scope 1 and 2 emissions by fiscal 2030 from the fiscal 2019 level. It made this move in light of increased endeavors under the IHI Group ESG Management approach that it formulated in November 2021 and intensifying efforts to tackle climate change.
The company formulated Group Management Policies 2023 in May this year to address social issues. It looks to progress further toward becoming a sustainable, high-growth enterprise by decisively shifting operational resources to growth areas.
IHI have formulated the Sustainable Finance Framework in order to make finance integral to business strategies based on the Group Management Policy 2023, and to promote transformation initiatives with stakeholders.
With the funds raised using this framework, the company will work to solve social issues and create social value, while aiming to improve corporate value and achieve sustainable growth of our business.
This framework is consistent with sectoral roadmaps, notably those of the Ministry of Economy, Trade and Industry for chemicals, electricity, gas, and automobiles, and those of the Ministry of Land, Infrastructure, Transport and Tourism for marine transportation and aviation.
It is also compatible with international scenarios of the International Energy Agency and the International Air Transport Association. The Japan Credit Rating Agency, Ltd., provided an independent third-party evaluation (see note *2) of conformity with the Climate Transition Finance Handbook 2023 and other relevant publications.
The framework will enable IHI to issue bonds and take out loans related to green-, transition-, transition-linked finance, and other areas.
The company will use funds procured through the framework help to realize a carbon-free, circular economy.
| 1． Third-party evaluation Entity | Japan Credit Rating Agency, Ltd |
| 2．Proposed fund uses
*Projects recognized as green projects |
Growth Business（Aero Engines and Space）
・Weight reduction of aircraft
・Electrification of aircraft engine*
・SAF*
Development focus Business （Clean Energy） ・Establishment of an Ammonia Value Chain
・Realization off carbon recycling
Core Businesses （Utilizing Existing Businesses） ・Electrification of automobile*
・Others
Reducing CO2 Emissions in Business Operations （Scope1，2）* |
| 3．Selection of Key Performance Indicators(KPIs) and Calibration of Sustainability Performance Targets(SPTs) |
KPI
・IHI Group’s GHG Emissions （Scope1+Scope2）
SPT
・50% reduction in 2030 （Compared to 2019）
|
| 4．Structuring Agent (see note *3) |
Nomura Securities Co., Ltd./ Mizuho Securities Co., Ltd. |
(*1) See appended PDF, titled IHI Corporation Sustainable Finance Framework
https://www.ihi.co.jp/en/sustainable/finance/i/231012_framework.pdf
(*2) See the link of evaluation from Japan Credit Rating Agency, Ltd.
https://www.jcr.co.jp/en/
(*3) A structuring agent advises issuers on developing transition bond frameworks and on securing second-party opinions and other external third-party evaluations.
Reference link
Examples of Sustainable Finance at IHI
https://www.ihi.co.jp/csr/english/finance/index.html