MUFG; Green, Social, and Sustainability Bonds | Mitsubishi UFJ Financial Group

Between September 2016 and September 2020, MUFG issued seven Green Bonds, one Social Bond, and three Sustainability Bond for a total amount of US$4.9 billion equivalent. Our recurrent issuance of these bonds represented a step forward in our relentless effort to contribute to a sustainable environment and society through our capital markets activities.

To this end, the net proceeds from our Green Bonds are allocated to projects which address environmental issues, such as renewable energy or energy efficiency projects, while those from Social Bonds are allocated to projects that tackle important social issues such as affordable housing, health and education. Finally, the net proceeds from Sustainability Bonds are allocated to a combination of both environmental and social projects.

The eligibility of environmental and social projects for financing is determined by a set of selection criteria outlines in MUFG’s Green, Social, and Sustainability Bond Framework presented below.

Green, Social, and Sustainability Bond Framework

In May 2020, MUFG has established a Green, Social, and Sustainability Bond Framework in line with the Green Bond Principles^(note1), the Social Bond Principles^(note1), and the Sustainability Bond Guidelines^(note1) published by the Internatinal Capital Market Association (ICMA), and has obtained a second party opinion from Sustainalytics, an internationally recognized external reviewer.

(note1) This is a voluntary guideline formulated by the International Capital Market Association (ICMA) to promote the transparency, disclosure, and reporting of green, social, and sustainability bonds and to promote market order. For more information, please refer to the official ICMA web site.

Green Finance Framework aiming for the funds related to the construction of MUFG Headquarters Building

1. Use of Proceeds

The net proceeds from the sale of Green, Social, and Sustainability Bonds issued by MUFG are lent to MUFG Bank, Ltd. (“the Bank”), a subsidiary of MUFG, and the Bank allocates amounts equivalent to the net proceeds to Eligible Projects as defined by the criteria presented below.

Eligible Green Projects

Green Buildings

Financing eligible green buildings^*2 owned by J-REIT (Japanese Real Estate Investment Trust)

(※2)
Real-estate properties which have earned one of the following:

Gold or Platinum rating under LEED
Excellent or Outstanding rating under BREEAM
A or S rating under CASBEE
4 or 5 stars under DBJ Green Building Certification

Renewable Energy

Financing of eligible renewable energy projects (solar thermal power generation, solar photovoltaic power generation and onshore and offshore wind farm projects) which are certified as eligible to funding^*4 based on environmental and social impact assessments performed by the Bank in accordance with the Equator Principles^*3

(※3)
The Equator Principles is a financial industry benchmark for identifying, assessing and managing environmental and social risks and impacts in large-scale projects, which is intended to serve as a common baseline and framework for financial institutions acting as lenders or financing advisers for clients.

Implementation of The Equator Principles as a Framework to assess and manage Environmental and Social Risks

(※4)
Eligible projects need to be categorized as Category B or Category C under the Equator Principles.

Eligible Social Projects

Healthcare

Financing of public hospitals (domestic and overseas) and domestic hospitals run by a social medical care corporation or a social welfare corporation that will ensure accessibility to people living below the poverty line

Financing of medical care facilities and medical equipment and product manufacturers (domestic and overseas) that contribute to treating and preventing the spread of infectious diseases (COVID-19, etc.) and financing of pharmaceutical companies contributing to testing and R&D toward alleviating symptoms and preventing the spread of infectious diseases

Education

Financing of public schools that will ensure accessibility to people living below the poverty line

Employment Generation/Preservation

Financing^*5 contributing to reconstruction and recovery from economic damage and impact caused by earthquakes, typhoons, and other disasters

Financing for small and medium-sized enterprises and sole proprietors adversely affected by the spread of infectious diseases including COVID-19

(※5)
Priority to be given to loans to operators using the Scheme for Compensation for Interest Rates on Special Zones for Reconstruction^*6 or Subsidy Program for New Business Establishment in the Areas Recovering from Tsunami and Nuclear Disaster towards Employment Creation^*7

(※6)
This government system supports the smooth implementation of projects by providing interest subsidies for five years to finance core projects in reconstruction promotion plans prepared by local governments and approved by the national government for the reconstruction of areas suffering damage from the Great East Japan Earthquake

(※7)
Subsidies for the purpose of promoting industrial reconstruction and regional economic revitalization, mainly in areas where evacuation orders have been lifted, and through job creation, in areas such as the tsunami disaster zones that suffered particularly great damage from the Great East Japan Earthquake and evacuation order zones that suffered enormous damage from the nuclear disaster

Affordable housing

Financing of public housing suppliers who are registered with the Regulator of Social Housing in England

2. Process for Project Evaluation and Selection

MUFG has evaluated and selected Eligible Projects in accordance with the pre-determined criteria described above. In the selection process of Eligible Green Projects, financing to J-REIT which have achieved the top three ratings of MURC's ESG evaluation^*8 has been preferentially selected when applying loans as “ESG evaluation loans for J-REIT.”

(*8)
Mitsubishi UFJ Research and Consulting has developed an ESG evaluation methodology, “MUFG ESG evaluation for J-REIT supported by JCR.”For more information, please refer to the official MURC web site (in Japanese).

3. Management of Proceeds

MUFG has allocated amounts equivalent to the net proceeds to funding Eligible Projects through the Bank and continuously monitors the allocated funds thereafter. Pending allocation, any unallocated funds are held in cash, cash equivalents and/or marketable securities.

4. Reporting

MUFG plans to disclose the allocation of funds on its website generally on an annual basis^*9. Management assertions on the allocation of funds and reports published by an external review provider will be disclosed annually until all the net proceeds from the issuance of Green, Social, and Sustainability Bonds have been fully allocated to Eligible Projects through the Bank.

(*9)
MUFG may defer this disclosure as long as the funds are fully allocated to Eligible Projects and the allocation of the funds to individual projects that constitute Eligible Projects remains unchanged.

We have committed to publishing an impact report annually, throughout the term of the bond, containing the following impact metrics:

Eligible Green Projects

Green Building

－ CO₂ emission reduction

Renewable Energy

－ kWh of power generated from renewable energy projects

－ CO₂ emission reduction

Eligible Social Projects

Healthcare

－ Number of patients receiving the medical services or number of hospital beds

－ Number of R&D , Number of manufacturing facilities / medical machines, Number of medical instruments / sanitary, Number of vaccines / pharmaceuticals supplied

Education

－ Number of students receiving the educational services

Employment Generation/Preservation

－ Number of loans provided to businesses that contributes to reconstruction of disaster affected areas and that of employments created

－ Number of loans provided to businesses affected by infectious disease and that of employments of the business

Affordable housing

－ Number of residences provided

Detail information on the bond

Green Bonds

Pricing Date	Issue Date	Issue Amount (Mio)	Tenor	Second Party Opinion	Reporting	Report of the External Consultant	Management Assertion
6-Sep-16	Issue Date 13-Sep-16	Issue Amount (Mio) USD 500	Tenor 7year	Second Opinion Sustainalytics'opinion（PDF / 693KB）	Reporting（PDF / 297KB）	Report（PDF / 677KB）	Management Assertion（PDF / 60KB）
1-Oct-18	Issue Date 9-Oct-18	Issue Amount (Mio) EUR 500	Tenor 5year	Second Opinion Sustainalytics'opinion(PDF / 677KB)	Reporting（PDF / 422KB）	Report（PDF / 159KB）	Management Assertion（PDF / 55KB）
7-Dec-18	Issue Date 18-Dec-18	Issue Amount (Mio) USD 120	Tenor 10year	Second Opinion Sustainalytics'opinion(PDF / 677KB)	Reporting（PDF / 260KB）	Report（PDF / 159KB）	Management Assertion（PDF / 54KB）
16-Jul-19	Issue Date 19-Jul-19	Issue Amount (Mio) EUR 500	Tenor 10year	Second Opinion Sustainalytics'opinion(PDF / 677KB)	Reporting（PDF / 304KB）	Report（PDF / 276KB）	Management Assertion（PDF / 46KB）
24-Sep-19	Issue Date 1-Oct-19	Issue Amount (Mio) AUD 400	Tenor 5year	Second Opinion Sustainalytics'opinion(PDF / 677KB)	Reporting（PDF / 326KB）		Management Assertion（PDF / 46KB）
24-Sep-19	Issue Date 1-Oct-19	Issue Amount (Mio) AUD 100	Tenor 5year	Second Opinion Sustainalytics'opinion(PDF / 677KB)	Reporting（PDF / 273KB）		Management Assertion（PDF / 46KB）

Social Bonds

Pricing Date	Issue Date	Issue Amount (Mio)	Tenor	Second Party Opinion	Reporting	Report of the external consultant	Management Assertion
6-Dec-19	Issue Date 12-Dec-19	Issue Amount (Mio) USD90	Tenor 10year	Second Party Opinion Sustainalytics'opinion(PDF / 512KB)	Reporting（PDF / 382KB）	Report（PDF / 260KB）	Management Assertion（PDF / 54KB）

Sustainability Bonds

Pricing Date	Issue Date	Issue Amount (Mio)	Tenor	Second Party Opinion	Reporting	Report of the External Consultant	Management Assertion
2-Jun-20	Issue Date 9-Jun-20	Issue Amount (Mio) EUR 500	Tenor 4year	Second Party Opinion Sustainalytics'opinion(PDF / 700KB)	Reporting（PDF / 276KB）	Report（PDF / 257KB）	Management Assertion（PDF / 56KB）
11-Sep-20	Issue Date 30-Sep-20	Issue Amount (Mio) JPY 54,000	Tenor 10year and 4month	Second Party Opinion Sustainalytics'opinion(PDF / 700KB)	Reporting（PDF / 234KB）		Management Assertion（PDF / 49KB）
11-Sep-20	Issue Date 30-Sep-20	Issue Amount (Mio) JPY 96,000	Tenor 10year and 4month (can be called after 5year and 4month)	Second Party Opinion Sustainalytics'opinion(PDF / 700KB)	Reporting（PDF / 275KB）		Management Assertion（PDF / 71KB）

(*)
Information disclosed courtesy of project companies.

(*)
All information contained in this communication prepared by MUFG has been provided for informational purposes only and is not a solicitation of any offer to buy or sell any security or other financial instrument. Investing in securities involves risks, and, when you invest in securities, there is always the potential of losing all or a portion of your invested money. Before acting on any information contained in this communication, you should carefully consider whether it is suitable for your particular circumstances and objectives, including but not limited to whether it is consistent with your understanding or expectation with respect to any details of specific Green, Social, and Sustainability Bonds relevant to you, and, if necessary, seek professional advice.

(As of June 2023)

Ratings

Fixed Income Information