Green Finance

NAF aims to strengthen the funding base by expanding the group of investors interested in ESG investment and financing, along with promoting initiatives for sustainability even further, by procuring funds through Green Bonds.

■ Green Finance Framework

With the aim of implementing green finance, the Green Finance Framework has been established as follows.

1. Use of Proceeds

NAF plans to apply the proceeds from green finance to funds for acquisition of eligible green assets (described in “(2) Eligibility criteria” below) and funds for repayment of existing loans or redemption of investment corporation bonds that were procured for acquisition of eligible green assets.

2. Eligibility Criteria

Assets for which any of the following certifications from a third-party certification body (“green building certification”) has been or will be obtained (“eligible green assets”).
・DBJ Green Building Certification: 3 Stars, 4 Stars, or 5 Stars
・BELS Certification: 3 Stars, 4 Stars, or 5 Stars
・Certification for CASBEE for Real Estate: B+, A, or S Rank
・Other green building certification: Rating of an equivalent level to the above
* For details of “eligible green assets”, please see “International Initiatives and External Certifications” page.

3. Process for Project Evaluation and Selection

The eligibility criteria are drafted by the Sustainability Promotion Office (the “Office”), which is made up of members from across the Asset Management Company, and decided at the Investment Committee, the members of which include the President & CEO, the Chief Investment Officer (CIO), and the Chief Financial Officer (CFO) of the Asset Management Company.
Green finance projects are selected through examination of eligibility carried out by the Office based on the eligibility criteria followed by deliberation and approval by the Investment Committee.

4. Management of Proceeds

The amount of debt calculated by multiplying total acquisition price of eligible green assets in NAF’s portfolio by the ratio of interest-bearing debt to total assets (“amount of eligible green debt”) will be set as the upper limit amount for green finance and managed so that the balance of green finance does not exceed the amount of eligible green debt.

5. Reporting

The following items will be disclosed on the NAF website as at the end of February of each year so long as the balance of green finance is outstanding.
・ Total acquisition price of eligible green assets
・ Ratio of interest-bearing debt to total assets
・ Amount of eligible green debt
・ Balance of green finance outstanding

As of February 28, 2021

Total eligible green assets (billion yen) 66.1
LTV 50.2%
Eligible green debt amount (billion yen) 33.1
Green finance (billion yen) 4.0

Reporting on status of proceed allocation is as follows.

(billion yen)

Green finance 4.0
Green bonds 4.0
Green loans

* For details of green finance, please see “Investment Corporation Bonds” page.

The following items will also be disclosed on the NAF website each year so long as the balance of green finance is outstanding.
・ Status of acquisition of green building certification (number of properties, floor area, and ratio of acquisition (floor area basis))
・ Each eligible green asset’s property name, and certification type, rating, and certification (renewal) date of green building certification
・ Energy (electricity) consumption volume and intensity
・ Energy-originated CO2 emissions volume and intensity
・ Water consumption volume and intensity
* For details, please see “International Initiatives and External Certifications” and “Environmental Initiatives (E)” page.

■ External review

For eligibility of the green finance framework, NAF has been assigned “Green 1 (F),” the highest evaluation grade in the JCR Green Finance Framework Evaluation by Japan Credit Rating Agency, Ltd. (JCR). For the content and other details of the JCR Green Finance Framework Evaluation, please refer to the following website.

JCR Green Finance Framework Evaluation: https://www.jcr.co.jp/en/greenfinance/

■ SMBC Environmental Assessment Loan

NAF has received an “A” rating from Sumitomo Mitsui Banking Corporation, as it was deemed that NAF’s environmental initiatives are at a high level in terms of “understanding environmental impact,” “environmental business,” and the “status of efforts for environmental conservation measures,” and NAF was also granted an SMBC Environmental Assessment Loan.