• Sustainability Initiatives and Policy
• Environmental Initiatives
• Social Contribution Initiatives
• Corporate Governance
• Green Financing
• Sustainability-related Disclosure

What is Green Financing?

At Advance Logistics Corporation (“ADL”), green financing refers to financing (i.e., issuance of bonds (green bonds) and/or procurement of loans (green loans)) for which use of proceeds is limited to environmentally-conscious projects.
ADL intends to use the proceeds from green financing for implementing sustainability-promoting initiatives in line with its “Basic Sustainability Policy”, and intends to proactively recognize required level of environmental, social, and governance (ESG) practices through a dialogue with investors and apply such knowledge to its asset management strategy.

Green Financing Framework

In order to ensure that the proceeds are used solely for projects with positive environmental impact, ADL has established the following green financing framework ( “Framework”) and procures and manages the proceeds in accordance with such Framework.

◆Third-party evaluation

In order to make sure that the Framework is in compliance with the “Green Bond Principle 2018” established by the International Capital Market Association (ICMA), the “Green Bond Guideline 2017” established by the Ministry of the Environment of Japan, and the “Green Loan Principles” established by the Loan Market Association (LMA) and the Asia Pacific Loan Market Association (APLMA), ADL had the Framework evaluated by a third-party institution, the Japan Credit Rating Agency, Ltd. (“JCR”) and received the highest “Green 1 (F)” status in the “JCR Green Finance Framework Evaluation” (please see attachment below):

News Release by JCR

◆Use of proceeds

The proceeds from green financing are applied in its entirety to any one or combination of the following:

• Costs of acquisition of green eligible assets (Note);
• Repayment of loans borrowed for acquisition of green eligible assets; and
• Redemption of investment corporation bonds issued for acquisition of green eligible assets

• For details of green eligible assets, please refer to the “eligibility criteria” below.

◆Eligibility criteria

The green eligible assets are selected from assets for which ADL has obtained or plans to obtain one or more of the following third-party certifications:

• (i) 5 or 4 stars of the DBJ Green Building Certification;
• (ii) S or A rank of CASBEE (Comprehensive Assessment System for Built Environmental Efficiency) (Note 5); and
• (iii) 5 or 4 stars of BELS (Building-Housing Energy-efficiency Labelling System) (Note 6)

◆Management of proceeds

ADL manages the proceeds from green financing so that the outstanding proceed amount will not exceed the amount of green eligible liabilities. (Note)

• The amount of green eligible liabilities is calculated by taking (i) the total amount of green eligible assets and multiplying the same by (ii) loan to value (LTV) ratio of ADL as of the end of the immediately preceding fiscal period.

◆Reporting

1. Reporting on status of use of proceeds

ADL discloses the status of use of the proceeds from green financing on its website and update the status on an annual basis so long as any of the proceeds are outstanding.

2. Reporting on outstanding amount of proceeds from green financing

ADL reports, on an annual basis, the total value of green assets, the amount of green eligible liabilities, and outstanding amount of the proceeds from green financing as of the end of January each year, so long as any of the proceeds are outstanding.

3. Environmental Impact Reporting

As environmental impact reporting, ADL annually discloses following metrics on its website:

• The number of, level of environmental certifications awarded on, and total floor area of green eligible assets; and
• Following performance data (such data is not disclosed separately for green eligible assets, and is disclosed for the entire portfolio, with ratio of covered assets):

• (i) Total energy consumption;
• (ii) Total Co2 emissions;
• (iii) Total water consumption; and
• (iv) Total waste generation

For the environmental impact reporting, please click here.