Sumitomo Mitsui Banking Corporation (SMBC) announced on February 5 the launch of Sustainability-Linked Loan (SLL) financing for its overseas Japanese customer’s ESG (Environmental, Social, and Governance) and SDGs (Sustainable Development Goals) related activities.
The objective of SLLs is to promote and support environmentally and socially beneficial economic activities by linking corporate loan terms with a customer’s performance against mutually-agreed, sustainability performance targets (SPTs) consistent with a customer’s sustainability strategy. The objective of the SLL is to incentivize customers to improve their sustainability performance.
SMBC arranges SLLs in accordance with the Sustainability-Linked Loan Principles (SLLPs) published by the Loan Market Association (LMA), Loan Syndications and Trading Association (LSTA) and Asia Pacific Loan Market Association (APLMA).
The first SLL financing was extended to Bridgestone Americas, Inc. and closed by SMBC as sole Arranger, Administrative Agent and Sustainability Coordinator on January 31, 2021. This is the first SLL financing arranged by SMBC for an overseas Japanese customer.
The loan was successfully syndicated amongst a club of banks and features a sustainability-linked pricing adjustment mechanism tied to Bridgestone Corporation’s ESG evaluation scores as assessed by Sustainalytics and FTSE Russell. The financing was structured by SMBC in accordance with the SLLPs and pertinent market guidance.
Last April, SMBC Group, including SMBC, established “SMBC Group GREEN × GLOBE 2030”, a ten-year plan that extends to 2030 based on the Sustainability Statement. Particularly, in order to take actions in solving environmental issues, a target of JPY 10 trillion has been set for Green Finance to be achieved by the end of FY2029.
Based on the Sustainability Statement, SMBC will engage and act together with customers and other stakeholders to contribute to the global transformation into a better society.