Sustainable Finance：Sustainability：The Norinchukin Bank

The Norinchukin Bank Sustainable Finance

As a member of a cooperative organization supporting agriculture, fishery and forestry industries, the Norinchukin Bank understands that our businesses are part of the life, natural environment, and the affluent lives of community members sustained through these industries. As such, we aim to resolve environmental and social issues through sustainable finance.
We set a target ¥15 trillion in new finance between fiscal 2021 to 2030.

The Bank defines sustainable finance as financing that falls under one of the following categories—Green, Social, Sustainability, and Transition—and that meets the criteria set out below within the scope of lending, investment, and fundraising activities (hereinafter referred to as "Finance").

Green	Finance that contributes to environmental areas such as decarbonization, the protection and enhancement of natural capital, and the circular economy, or where progress and actions in these areas are considered in investment and lending strategies or decisions. Bond issuances and loans are aligned with relevant principles, such as those established by the ICMA and LMA*. Project finance transactions cover assets such as renewable energy, transmission and distribution infrastructure, and energy-efficient buildings.
Social	Finance that contributes to social areas such as poverty reduction, employment, education, and socio-economic development, or where progress and actions in these areas are considered in investment and lending strategies or decisions. Bond issuances and loans are aligned with relevant principles, such as those established by the ICMA and LMA. Project finance transactions cover essential social infrastructure assets, such as schools and hospitals, that contribute to the sustainable development and maintenance of society.
Sustainability	Finance that meets both the Green and Social criteria described above. Bond issuances and loans are aligned with relevant principles, such as those established by the ICMA and LMA.
Transition	Finance that supports the transition toward medium- to long-term net zero and nature-positive goals, or where progress and actions related to the transition are considered in investment and lending strategies or decisions. Bond issuances and loans are aligned with relevant guidance, such as those established by the ICMA.

*ICMA（International Capital Market Association）、LMA（Loan Market Association）

Sustainable finance also includes loan origination by our group company, The Norinchukin Trust & Banking Co., Ltd.; externally managed mandates for funds operated by Norinchukin Zenkyoren Asset Management Co., Ltd.; as well as lending, investment, and funding activities conducted by Norinchukin Australia Pty Limited and Norinchukin Bank Europe N.V.

Results

The Bank financed a cumulative ¥9.0 trillion in new sustainable finance by fiscal 2024.

Breakdown by Asset/Product

Investment and loan	Marketable assets, etc.	Approx. ¥5.3 trillion
	Project finance	Approx. ¥2.0 trillion
	Loans	Approx. ¥1.3 trillion
	Investment and finance total	Approx. ¥8.6 trillion
Procurement	Green bonds and green deposits	Approx. ¥0.4 trillion

Investment and Finance for the Resolution of Environmental and Social Issues

Investing in European Investment Bank Sustainability Awareness Bonds

The Bank invested a total of A$300 million in sustainable awareness bonds (the "Bonds") issued by the European Investment Bank.
We plan to use these Bonds, which focus on natural disasters and risk management, for global activities and projects that help create a sustainable environment and society. The importance of measures for climate change natural disaster adaptation increases each day as climate change has caused increasingly severe natural disasters around the world in recent years. The Bank is committed to investing in bonds to contribute to safe and sustainable urban development, providing funds for infrastructure development and contributing to natural disaster risk management.

Resolving Social Issues Through Finance

Worldwide Action in Project Finance

In our investment business, we are fully engaged in project finance. Unlike corporate finance, which provides loans according to the creditworthiness of the corporation receiving the loan, project finance targets a specific business/project and then evaluates its profitability before financing.

Project Finance Case Studies

Environmental Sector

Loan balance: ¥1,165.3 billion

The Bank provides financial support for renewable energy projects such as offshore wind and submarine transmission lines in the UK and continental Europe, as well as solar power generation in the Middle East and Japan.

Social Sector

Loan balance: ¥1,632.6 billion

The Bank provides financial support for water treatment projects in Australia and the Middle East, as well as other social infrastructure projects such as schools, hospitals, and other public facilities in Australia, the UK, and the Middle East.

As of March, 31 2025

Loans such as Sustainability-Linked Loans

The Bank handles ESG loan products to advance initiatives for solving the environmental and social issues faced by customers in business strategy and supporting thier medium- to long-term corporate value.
Sustainability-linked loans involve Sustainability Performance Targets (SPTs) based on the business strategies of our borrowers. Linking loan conditions with progress toward achieving SPTs motivates customers to achieve their goals.
The Bank also launched loan products with limitation on the use of funds compliant with the Green Loan Principles. These include green loans (for environmentally friendly businesses), social loans (for socially friendly businesses), and sustainability loans (for environmentally and socially friendly businesses). In addition, we began offering transition loans to finance companies' transition efforts toward decarbonization.
Through these loan products, we support customer efforts to solve environmental and social issues.

Product name	Cumulative amount of new loan transactions from FY2021 to FY2024 (billion yen)	Fund Usage
Sustainability Linked Loans	622.7	Unlimited (set SPTs)
Green Loans	377.3	Limited to use of proceeds	Environmentally friendly businesses
Social Loans	71.9		Socially friendly businesses
Sustainability Loans	20.7		Environmentally and socially friendly businesses
Transition Loans	61.6	Restricted/Unrestricted Climate Change Initiatives
Positive Impact Finance	168.3	Unlimited

Efforts to realize a decarbonized society and reduce food waste

In partnership with JA Bank members, in December 2024, The Norinchukin Bank concluded a syndicated loan agreement for a sustainability-linked loan with Life Corporation (LC). This is a syndicated sustainability-linked loan in which a group of JA Bank members is formed under the arrangement of the group company, The Norinchukin Trust & Banking Co. Ltd.
Sustainability-linked loans are a method of financing that aims at motivating the borrower to meet targets and supporting sustainable business activities and growth. They involve the setting of sustainability performance targets (SPTs) based on the borrower’s management strategy. Loan terms are also tied to the attainment of the SPTs.
This financing is for supporting LC’s efforts to “contribute to the realization of a sustainable and prosperous society through ambitious and trustworthy management” (in accordance with the company’s philosophy). The SPTs for the project are “reducing total (Scope 1, 2) GHG emissions intensity (relative to FY2013)” and “reducing total food waste per unit of sales (relative to FY2017).”

Solving Climate Change Issues through Collaboration with Companies and Other Cooperatives

The Bank participates with Mitsubishi Estate Co. Ltd., (the “Company,” below) in a wide range of SDGs that work to improve the city, such as the Daimaruyu SDGs ACT5. Various companies collaborate in this act and promote SDG activities in the Otemachi, Marunouchi, and Yurakucho areas. The Bank deepens the conversation among executives and employees through such activities. As such, we entered into the Sustainability Linked Loan Agreement in October, 2022. This agreement sets SPTs that contribute to solving climate change issues (FY2025: 100% transition to renewable energy, FY2030: 70% reduction in Scope 1-2 emissions and 50% in Scope 3 compared to 2019)
The Bank will contribute to solving climate change issues by collaborating with companies and encouraging customer initiatives.

Initiatives aimed at promoting the carbon neutrality of Hokkaido’s whole energy sector

In December 2024, the Bank concluded a transition-linked loan agreement with Hokkaido Electric Power Co., Inc. (HEPCO).
The purpose of a transition-linked loan is to promote efforts that contribute to the goal of realizing a carbon neutral society by 2050, by providing efficient financing to accelerate the company’s decarbonization transition (i.e., climate transition) efforts. Transition-linked loans are a method of financing designed to motivate the borrower to meet targets and support sustainable business activities and growth. They involve the setting of sustainable performance targets (SPTs) based on the borrower’s management strategy. Loan terms are also tied to the attainment of the SPTs.
With this financing, we are supporting HEPCO’s efforts to achieve the carbon neutrality of Hokkaido’s entire energy sector by 2050. This aligns with the “Hokuden Group Management Vision 2030,” which specifies the environmental goal of reducing the CO2 emissions of the power generation sector by at least 50% relative to the FY2013 level by FY2030.

Contributions to sustainable environments and society through investments

The Bank tackles the equity needs of customers to expand our finance tools for helping customers resolve their environmental and social issues. We contribute to a sustainable environment and society by returning investees’ initiatives and technologies to our customers and member organizations.

Topics

Business Alliances for Decarbonization and The Establishment of a New Company
- Excess Electricity Circulation Solar PPA* Service -

*Power Purchase Agreement

The Bank partnered with JA Mitsui Leasing, Ltd., ("JA Mitsui Leasing,” below), JA Mitsui Energy Solutions, Ltd., iGrid Solutions, Ltd., and VPP Japan, Ltd., to establish the Circular Green Energy LLC (the "Company").
In addition to providing on-site consumption services for solar power generation facilities, the Company began offering the Excess Electricity Circulation Solar PPA Service. This service effectively utilizes the excess energy generated by such facilities. Users of this service can install solar power for their own consumption with no maintenance or initial investment allowing users to reduce GHG emissions and power costs, procure stable power, and have access to emergency power sources. The Bank will work towards decarbonatization through the installation of these systems on the roofs of buildings owned by customers of JA Mitsui Leasing or the Bank, and affiliate organizations such as JA.
By fiscal 2024, the Company has concluded power purchase agreements (PPAs) with dozens of power enterprises for the installation and operation of self-consumption power generation facilities and sale of surplus power.

Green Procurement Initiatives

Issuance of Green Bonds

The Bank issues U.S. dollar-denominated Norinchukin Bank debentures as green bonds in overseas markets.Norinchukin Bank debentures are bonds authorized to be issued under the Norinchukin Bank Act to raise funds for the Bank.
The use of funds procured by the issue of these bonds is limited to investments and loans for projects that contribute to renewable energy enterprises or other environmental improvement initiatives. Prior to issuing bonds, the Bank developed a sustainable bond framework and confirmed its compatibility with the voluntary Green Bond Principles (2021) issued by the International Capital Market Association (ICMA).
By issuing green bonds and using the procured funds for investments and loans, we are helping to shape a more sustainable environment and society. Note that all decisions relating to the Bank’s green bonds are made independently.

Sustainable Finance