JAPAN POST BANK Co., Ltd. (hereinafter "JAPAN POST BANK") has established ESG Investment and Financing Policy (hereafter "this Policy"), based on the JAPAN POST BANK Environmental Policy and the JAPAN POST BANK Human Rights Policy, that would appropriately address environmental issues such as climate change and biodiversity, social issues such as the violation of human rights, and to secure stable returns over the medium- to long-term and reduce risk.
This Policy applies to all of the investment and financing*1 directly carried out by JAPAN POST BANK.
While promoting internationally diversified investment, JAPAN POST BANK adheres to international agreements and does not invest in or finance activities that are contrary to the public or social good. The Bank invests or finances only after sufficient care is given in assessing how the funding from its investment or financing for securities or other financial instruments will be used.
JAPAN POST BANK engages in the following investment and financing.
a）In order to push society and our local communities forward, JAPAN POST BANK investing and lending activities will actively focus on decarbonization businesses that contribute to the revitalization of local communities.
b）The Bank actively invests in financial instruments such as green bonds and provide finance to support initiatives that contribute to mitigating and adapting to climate change.The Bank also actively carries out investment and financing activities that contribute to solving social issues other than those related to climate change.
At JAPAN POST BANK, the JAPAN POST BANK Human Rights Policy states that we will strive to avoid investment in and lending to businesses that have a negative impact on human rights, and the Bank monitors the status of risk of human rights infringements.
Based on its adherence to international agreements and policy of not investing in or financing activities that are contrary to the public or social good, JAPAN POST BANK does not invest in or finance businesses where funding is allocated to any of the following areas.
a）Illegal transactions and transactions for illegal purposes
b）Transactions which violate public order and good morals
c）Transactions that negatively impact wetlands designated under the Ramsar Convention
d）Transactions that negatively impact UNESCO-designated World Heritage Sites
e）Transactions violating the Convention on International Trade in Endangered Species of Wild Fauna and Flora (Washington Convention)*2
f）Businesses engaged in forced labor, child labor, and human trafficking
a）Manufacturers of weapons
Cluster bombs are weapons that scatter submunitions indiscriminately over a wide area, and they are recognized by the international community as entailing humanitarian risks that cannot be ignored. Due to that recognition, JAPAN POST BANK does not invest in or finance companies that manufacture cluster bombs.
In addition, from a humanitarian perspective, the Bank does not invest in or finance businesses where the funding will be used in the manufacture of weapons such as anti-personnel mines and biological and chemical weapons.
b）Coal-fired power generation
Coal-fired power plants produce higher volumes of greenhouse gas emissions than other methods of power generation, and therefore we recognize that they have a higher risk of negatively impacting the environment and society. For that reason, JAPAN POST BANK does not invest in or finance businesses where funding will be used in the construction of new coal-fired power plants or the expansion of existing facilities.
However, if necessary for achieving the goals of the Paris Agreement, we may consider investment and financing that contributes to the transition to a carbon-free society, where funds will be used for technologies such as co-combustion and carbon capture, utilization and storage (CCUS).
c）Coal mining (fuel coal)
In addition to the risk of assets becoming stranded by the transition to a carbon-free society, we recognize that coal mining has a risk of negatively impacting the environment and society through human rights issues such as forced labor and child labor in coal mines and ecological destruction associated with mining activities. For that reason, we does not provide investment or loans that will be used to fund new coal mining activities for fuel coal or to expand existing coal mining (including the use of mountain top removal [MTR] methods or infrastructure projects related to coal mining operations).
d）Oil and gas
With respect to the extraction of oil and gas (especially oil sands, Arctic development, and shale oil and gas) and pipeline construction, we recognize risks of negatively impacting the environment and society through environmental destruction caused by oil spills and deforestation, as well as violations of the human rights of indigenous peoples. For that reason, where funding will be used in the mining of oil and gas (in particular, oil sands, Arctic development, and shale oil and gas) and pipeline production, JAPAN POST BANK carefully considers investment or financing after verifying the environmental and social considerations implemented by the applicable business.
e）Developing palm oil plantations
While palm oil is an important raw material indispensable in daily life and in sustaining society itself, we recognize problems with forced labor and child labor as well as risks of negatively impacting biodiversity and climate change through natural forest deforestation. For that reason, when considering investments and loans to be used for funding palm oil plantation development, JAPAN POST BANK does first confirm, and carefully examine, what considerations are being made with respect to the environment and communities, including the acquisition of RSPO*3 certification, the honoring of FPIC*4 with respect to local communities, and compliance with NDPE*5.
f）Deforestation (large-scale plantation development, etc.)
Forests play a crucial role in the conservation and protection of biodiversity by serving as habitats for a variety of living creatures, as well as in mitigating climate change through their absorption of carbon dioxide. Therefore, we recognize that unregulated large-scale deforestation poses a risk of negatively impacting the global environment and climate change. For that reason, when considering investments and loans to be used for funding projects involving deforestation (large-scale plantation development, etc.), JAPAN POST BANK does first confirm, and carefully examine, what considerations are being made with respect to the environment and communities. When considering investments and loans to be used for funding forestry businesses in emerging countries, JAPAN POST BANK does first confirm that internationally recognized certifications (e.g. FSC*6, PEFC*7) have been obtained and policies such as NDPE are in place that take into account environmental and human rights considerations.
g）Large-scale hydroelectric power generation
We recognize that large-scale hydroelectric power plant construction poses a risk of negatively impacting the environment and society, including biodiversity in river basins and human rights issues such as forcing the relocation of indigenous peoples and local communities. For that reason, where funding will be used in the construction of large-scale hydroelectric power plants, JAPAN POST BANK carefully considers investment or financing after verifying the environmental and social considerations implemented by the applicable business.
Through constructive dialog (engagement) and the exercise of voting rights, JAPAN POST BANK supports initiatives that help to solve social issues and drive the sustainable growth of the companies we invest in and finance.
Through these initiatives, we require that the companies we invest in and finance thoroughly disclose non-financial information.
JAPAN POST BANK conducts regular employee training to deepen understanding of environmental issues such as climate change and biodiversity as well as social issues such as the violation of human rights and ensure that duties are out appropriately in accordance with this Policy.
JAPAN POST BANK as a matter of basic policy aims to improve constructive communication through dialog and closer ties with all its stakeholders.
The JAPAN POST BANK policy on governance was determined and revised at Management Committee based on discussions by various committees, including the Sustainability Committee to manage ESG risks in investments and loans, etc.
In light of the external environment, we intend to regularly review the application and adequacy of this Policy at meetings of the Sustainability Committee and Management Committee, improving it as necessary.
| Policy | Corporate Finance | Project Financing |
||||
|---|---|---|---|---|---|---|
| Rates and FX Investment |
Equity | Corporate Lending |
||||
| Cross-sectoral bans on investments and loans | - | - | ○* | ○* | ||
| Policies with respect to special sectors | A) Weapons manufacturing | Items pertaining to the ban on investment and loans to companies that manufacture cluster bombs | ○ | ○ | ○ | ○ |
| Items pertaining to bans on investment and loans to entities other than companies that manufacture cluster bombs | - | - | ○* | ○* | ||
| Items pertaining to bans or restrictions on investment and loans to businesses B) to G) | - | - | ○* | ○* | ||
| Polices other than the above | ○ | ○ | ○ | ○ | ||