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Heiwa Real Estate's Commitment to Sustainable Finance

Heiwa Real Estate Co., Ltd. has taken a significant step in promoting sustainable finance through the introduction of Green Loans and Sustainability-Linked Loans (SLLs). These initiatives reflect the company's commitment to sustainability management and its role in contributing to environmental conservation.

Introduction to Green Loans

Green Loans are designed specifically for financing environmentally-friendly projects. By securing such loans, Heiwa Real Estate will be able to fund its initiatives aimed at addressing climate change, particularly in natural disaster countermeasures and flood mitigation. A sustainability coordinator from Mitsubishi UFJ Bank has helped establish the "Heiwa Real Estate Sustainability Finance Framework" to guide this financing. Moreover, the company has obtained an external assessment from the Japan Credit Rating Agency (JCR) to ensure compliance with established guidelines.

The essence of Green Loans is to manage the allocated funds sustainably, necessitating regular reporting on the environmental impact of funded projects. This model adheres to stringent standards set by the Green Loan Principles, which aim to ensure that the funds are used effectively for environmental preservation.

Implementation Schedule

• - Execution Date: February 2026
• - Lender: Mitsubishi UFJ Bank
• - Use of Funds: Expenditures related to climate change adaptation, including natural disaster measures and flood countermeasures.

Understanding Sustainability-Linked Loans (SLLs)

On the other hand, Sustainability-Linked Loans (SLLs) are structured to enhance a borrower's sustainability performance. Borrowers set ambitious Sustainability Performance Targets (SPTs), which are linked to the interest rates of the loan. This creates an incentive for borrowers to achieve their targets, thereby promoting sustainable business practices.

For Heiwa Real Estate, the SPT requires the company to maintain a Climate Disclosure Project (CDP) score of A- or higher throughout the loan term. Similar to the Green Loans, these loans also follow principles that align with sustainability targets, validated by third-party assessments from the JCR.

SLL Implementation Details

• - Execution Date: February 2026
• - Lender: Mitsubishi UFJ Bank
• - SPT Requirements: Maintain a CDP score of A- or higher.

Broader Implications and Goals

With the execution of Green Loans and SLLs, Heiwa Real Estate is not only enhancing its financial frameworks but is also committed to being transparent about its sustainability practices. The company aims to improve its sustainability management and financial transparency, contributing to the urban development of areas such as Nihonbashi Kabutocho and Kayabacho. This development vision aligns with Heiwa's goal of addressing emerging challenges related to corporate governance, ESG considerations, and the Sustainable Development Goals (SDGs).

Commitment to SDGs

Heiwa Real Estate’s ongoing commitment to the SDGs reflects its desire to contribute to solving societal challenges through its business activities. The company identifies itself as a "Bazukuri Company," emphasizing its role in fostering discussions that lead to higher satisfaction among stakeholders and promoting a sustainable society.

Conclusion

As Heiwa Real Estate moves forward with its sustainability initiatives, it underscores the importance of adaptive strategies that respond to the evolving business environment, including natural disaster risk management and heightened awareness of ESG principles. The company's innovative approach to sustainable finance through Green Loans and SLLs is a testament to its dedication to creating a more sustainable future, aligning financial motivations with environmental responsibilities.

For more details on Heiwa Real Estate, visit Heiwa's Official Website.