Based on our medium-term vision, the food and agriculture, retail, and investment divisions work toward achieving our purpose and resolving material issues. Together, these divisions work to achieve appropriate economic returns through investments, loans, and engagements (supporting a wide range of businesses including consultation and providing solutions). At the same time, divisions support investee, borrower, and stakeholder efforts to reduce negative environmental and social impacts while generating positive impacts.
We use impact measurement and management (IMM) to visualize and quantitatively manage the impact of our investments, loans, and business support activities on environmental and social issues.
Impact Creation Examples
The Norinchukin Bank began issuing green bonds in 2021. Funds raised through green bonds are used to invest in and finance projects that contribute to environmental improvement, including renewable energy projects. Funds are also used to measure and disclose the impact created through said investments and loans. As of March 2024 renewable energy projects using green bond funds have contributed to an annual reduction of approximately 720,000 tons of CO2 (The Norinchukin Bank share of emissions).
Impact Investment Initiatives
The Norinchukin Bank launched an investment program in fiscal 2022 allowing for private equity fund investments in cooperation with Group company Norinchukin Zenkyoren Asset Management Co., Ltd. (NZAM). As of March 2024, four funds have invested a total of ¥10 billion, aiming to create a positive impact on climate change, educational opportunities, healthcare and welfare, and other issues.
In addition, The Norinchukin Bank and NZAM participate in the ESG Data Convergence Project, which aims to standardize ESG reporting in the private equity sector. Over 100 investors and managers collaborate on this project to standardize and improve the quality of ESG reporting and clarify the status of ESG initiatives in the private equity sector, where ESG reporting is conducted differently by each individual company. Through these efforts, we strive to expand impact investment and help achieve sustainable environments and societies.
Creating Impact Through Investments in Food and Agriculture Companies
National Federation of Agricultural Cooperative Associations ("Zen-Noh") and The Norinchukin Bank entered into a capital alliance with Nisshin Seifun Group Inc. headquarters ("Nisshin Seifun"), acquiring common stock equivalent to approximately 1% of the Nisshin Seifun outstanding total (published November 17, 2020). Japan's agriculture sector is dealing with environmental and social issues that include such a shortage of farmers. Japan has a particularly low self-sufficiency rate for wheat, and the government is pushing a shift in cultivation to wheat from rice, increasing the cultivated area and production volume. A further issue is how to grow demand in line with this increase in production. Recognizing these issues, Zen-Noh and the Bank invested in Nisshin Seifun, which is the industry leader at 40% of the domestic flour market. The objective of this investment is to encourage production and expand demand for domestically produced wheat. The three parties discussed and established common goals related to this investment. We receive regular progress reports and have confirmed that efforts are having a gradual effect on encouraging domestic wheat products and increasing demand. According to Nisshin Seifun, the company has entered into joint development to secure a stable supply of domestic wheat and other domestic agricultural and livestock products, while extending its product lineup. Zen-Noh indicated that the organization is developing production and variety development based on demand with input from Nisshin Seifun. The Bank will continue to provide support for funds and smooth communications, encouraging the three-way efforts to resolve issues throughout the value chain.
Logic Model for Creating Environmental and Social Impact
Signing the Japan Impact-driven Financing Initiative
- The Norinchukin Bank signed the Japan Impact-driven Financing Initiative (the “Initiative”) on November 1, 2022.
- The Initiative, for which the Social Innovation and Initiative Foundation (SIIF) serves as the secretariat, encourages the practice of impact-oriented investment and loans. Under the Initiative, financial institutions collaborate with the shared belief that the purpose of financial institutions is to have a comprehensive understanding of their impact and take initiative in solving environmental and social issues.
- The Bank will advance our efforts to create and visualize our impacts through collaboration with other signatory institutions by participating in the activities of the Initiative and its subcommittees, and by improving our understanding of IMM.
- We also disclosed our impact financing initiatives in the Initiative Progress Report. Refer to page 41 of the following link for more information.
Regional Impact Creation and Visualization Initiatives
The Bank goes beyond financing to also provide consultation and solutions that help improve and develop the businesses and projects of businesses working to revitalize the agriculture, forestry and fisheries industries and generate regional development throughout Japan.
We conducted a trial social impact evaluation aiming to clarify the outcomes and objectives of such support, share our intentions with relevant stakeholders, utilize the results for learning and improvement, and improve external accountability. This trial evaluation enables the Bank to identify the paths to connect business activities to short-, medium-, and long-term environmental and social outcomes and clarifies the outcomes that we should measure.
The Bank will continue to measure the identified outcome indicators and use them to verify and improve business outcomes.
Supporting Agribusiness in Collaboration With Shikoku Electric Power (Takamatsu Branch)
The Takamatsu Branch of the Bank began providing multifaceted support to Shikoku Electric Power in 2018 when the company launched efforts to set up agricultural corporations (for strawberries and Shishito green peppers) from scratch as part of their business to revitalize the region. This year, the Bank conducted a social impact evaluation to visualize the business outcomes on the region (contribution to solving regional issues) and the paths to such outcomes. Through this evaluation, we also aimed to gain company-wide experience and understanding of the various issues that arose before the business got on track and how to solve such issues for application in other regions as well.
| Outcome Indicators | Quantitative Indicators/Formulas |
|---|---|
| (1) Increase in farmers' production |
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| (2) Increase in unit sales price of local products |
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| (3) Increase in farmers' incomes |
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Establishing a New Fishery Value Chain to Utilize Unused Fish (Osaka Branch)
Unused fish is a general term for fish that have good flavor but are passed off as inedible or valued only at low prices for being non-standard, caught in small quantities, not being well known, or other such reasons. The Osaka Branch of the Bank works with the town of Kami-cho in Hyogo Prefecture, JF Tajima, and other organizations of the partnership to establish a new fishery value chain for utilizing unused fish. We recognize that portions of catches are discarded at sea and the potential market for unused fish and that the economic benefits of the sustainable utilization of unused fish are not quantified in terms of business. In response to these issues, we conducted an impact assessment to identify environmental and social outcomes, identify pathways to achieve such outcomes, and create new markets.
| Outcome Indicators | Quantitative Indicators/Formulas |
|---|---|
| (1) Increase the types of fish to be utilized as unused fish |
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| (2) Increase product lineups of unused fish |
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| (3) Increase the number of participants in various events |
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- Sustainability
- Sustainability Management
- Highlights of Initiatives
- Our Purpose and Vision
- Philosophies and Policies
- Sustainability Promotion Structure
- Sustainability Advisory Board
- Important Issues to Achieve Our Purpose
- Stakeholder Engagement
- Participation in Initiatives
- Sustainable Finance
- Initiatives for Creating and Visualizing Impact
- Initiatives to Manage Environmental and Social Risks
- Agriculture, Fishery, Forestry Industries, and Regions
- Environment
- Social
- Governance
- Report/Index