Financing a greener world
We believe in creating a more sustainable world. To that end, our business helps our clients use financing to demonstrate their contribution to a better world through their sustainability initiatives. Our team finds the right solutions for each client using our in-depth understanding of the client's sustainability strategy, our knowledgeable structuring expertise, and our ESG investor insights. We are committed to fulfilling our promise to a sustainable society by delivering best-in-class financing outcomes and helping clients fulfill their sustainability-driven goals.
SMBC Group has committed to supporting the mobilization of JPY30 trillion toward sustainability initiatives between 2020 and 2030 as one of the key pillars of our GREENxGLOBE 2030 plan.
Action equals impact
A high-impact way for clients to communicate their corporate purpose and environmental, social, and governance (ESG) strategy is sustainable finance. Clients from around the world and across the Americas face unprecedented pressure to show more than profit.
Stakeholders including investors, regulators, employees, and communities demand greater transparency on how a company manages its ESG risks, how it will adapt to a transition to a net zero world and how it supports a culture of equity and inclusivity. Clients increasingly must choose to either proactively address ESG strategy or face consequences such as increased cost, decreased access to capital, and diminished reputation.
Sustainable finance refers to any financial product that expressly incorporates sustainability features. The sustainable finance category rose to prominence with the green bond but has since diversified to include bonds and loans focusing on a range of environmental and social priorities, as well as other financial products such as trade finance, derivatives, and leasing.
At SMBC Group in the Americas, we support our clients in sustainable finance by advising clients on how to frame and implement their ESG strategies, structuring tailored transactions, and working with SMBC’s world-class product teams to seamlessly execute. ESG leads across every business and we leverage a team of dedicated sustainable finance professionals who connect through a platform that spans the globe.
Financial products predominantly incorporate sustainability features in two ways:
How the funds will be used:
By specifying that the funds will be used only for designated sustainable purposes, a client differentiates a financial product in the eyes of stakeholders.
Examples: Green Bond, Social Bond
Adjustments to the terms of the financing:
Clients can further differentiate a financial product by providing for changes to the terms (such as interest rate) based on:
- Sustainability performance as measured through ESG ratings or performance indicators
Examples: Sustainability-Linked Revolving Credit Facility, Sustainability-Linked Bond
- The nature of the expenditures to be financed
Example: Sustainability Loan