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JCR’s Efforts to contribute to Green Finance

Amid global environmental issues are getting severer, such as climate changes, green bond issuances are sharply increasing mainly in Europe and the U.S. Reflecting such global movements, stakeholders in Japanese markets are increasingly interested in green bond issuances in Japan.

JCR has been thinking what we could do for protecting the environments for next generations as a credit rating agency as one of the participants in the financial market.

From such considerations, JCR has launched the provision of green bond evaluation services to whom it may be considering the issuance of green bonds.

We believe a third party evaluation would help issuers to reduce costs and times to take administrative procedures for preparing a green bond issuance.
JCR will provide well detailed evaluation services in accordance with ICMA’s Green Bond Principles and Ministry of Environment’s Green Bond Guidelines.

JCR Green Bond Evaluation

JCR Green Bond Evaluation List
Issuer Subject Green Evaluation Results Use of Proceeds Credit Ratings
Canadian Solar Infrastructure Fund Long-term Loan Green1
(g1/m1)
PDF
Renewable Energy N.A.

Green Bond Evaluation Report

Topics related to Green Bond


E(environment)、S(social)、G(governance)

(1)About ESG

Recently, investors are becoming to consider ESG Factors, which consists of Environment, Social and Governance, when selecting to invest in equities and debts.

Considering that these non-financial information would affect companies’ long term performance, ESG investment, which considers ESG factors into its investment, are increasingly spreading out globally. It is said that the global ESG related investment volume is more than 20 trillon dollars now.

In Japan, ESG investments are taking growing interest from investors, e.g. Government Pension Investment Fund (GPIF) started passive management based on ESG index.

ESG

Credit rating and ESG

There are opinions that credit rating agencies should increase its transparency in how to incorporate ESG factors into its credit rating analysis, amid ESG investments increase. Reflecting such needs, United Nations Principles for Responsible Investment (UNPRI) shall established an initiative names ESG in Credit Ratings in 2016. This initiative aims to improve the transparency in how credit rating agencies systematically incorporate ESG factors into its credit analysis to share the opinions between investors and credit rating agencies.

JCR signed this initiative for the first time as a Japanese credit rating agency and is participating in global discussions regarding this issue.

For more details about this initiative, please click here.PDF

JCR's Credit Ratings and ESG Factors

JCR believes that it is necessary to consider ESG factors when it assesses each items in its credit rating methodlogies. JCR includes the following impacts in its analysis concerning the possibility of ESG factor’s affecting any impacts on credit ratings.

- Impact by ESG factors on issuers’ sustainability
- Impact by ESG factors on cash flow generation capacity required for debt redemption
- Impact by initiatives for ESG on fundraising ability

For more details, please click here.PDF

Topics related to ESG