Initiatives to Manage Environmental and Social Risks：The Norinchukin Bank

Aiming to Improve Risk Governance

The extent and importance of environmental and social challenges to be addressed is increasing in practicing sustainable finance. It is essential for us to evaluate and consider environmental and social risks when considering whether to provide financing or investment to clients or projects. Under our Environmental and Social Risk Management (ESRM) framework, the front-line department assesses environmental and social risks, and the risk management department exercises the monitoring and checking function. In addition, an internal escalation process for decision-making at the management level on an as needed basis is established. We will work on advancing the sophistication of our ESRM framework in a phased manner, aiming to incorporate the framework into integrated risk management.

From the Front Lines

Risk Management Division.OMORI Keisuke

The Environmental and Social Risk Management (ESRM) framework promotes the sustainable finance of the Bank through such initiatives as investment and financing sector policies, the Equator Principles and ESG integration. At the same time, we think the framework has an influence on the entire business activities of the Bank, including the grasp of investment and business opportunities and financing.
As the world circumstances have been changing in recent years, expanding environmental and social issues, I feel projects that require careful consideration in that respect are increasing. To address that, we are making systematic responses by appropriately adding and reviewing the investment and financing sector policies and utilizing the escalation framework introduced in 2021. Moreover, we will promote advancement of the ESRM by incorporating environmental and social risk factors into existing credit risk management through ESG integration, etc.

Specific ESRM Initiatives of the Norinchukin Bank

The Norinchukin Bank established our Environmental Policy and Human Rights Policy in 2019 as basic policies to resolve environmental and social issues. Based on these policies, we engage in appropriate risk management according to priority for topics and sectors recognized as having strong potential for significant adverse impacts on the environment and society.

Sector Policies

The Norinchukin Bank has formulated policies on environmental and social considerations in providing financing or investment for businesses that could have significant adverse impacts on the environment and society. We will continue to revise these policies as needed, considering domestic and international trends regarding initiatives to address social and environmental issues, as well as the expectations from our stakeholders and points of view of them.

Policy on Environmental and Social Considerations in Financing and Investment Activities

ESG Integration in Risk Management

The Risk Management Department evaluates environmental and social risks for financing and investment and serves as a second line to support ESG integration conducted by the front-line department.

Equator Principles

We confirm compliance with the Equator Principles and monitor compliance with the covenants.

Responding to Environmental and Social Incidents

By periodically monitoring the environmental and social incident information* of our clients, we can take action to avoid the reputation risk or credit risk caused by environmental and social risks.

* Information on corporate and business activities and related events that could have serious impact on the environment or society.