SMBC seeking partners for ESG ventures
Firm is looking to push programmes focusing on UN Sustainable Development Goals
The Sumitomo Mitsui Banking Corporation (SMBC) is actively seeking out partners for undertaking environmental, social and governance (ESG) projects as part of its overall sustainability efforts.
Yasuyuki Kawasaki, deputy chairman of the Sumitomo Mitsui Financial Group, announced during a panel discussion at the Asian Financial Forum (AFF) 2020 held in Hong Kong on January 10, that SMBC is seeking partnerships not only in traditional banking but also with developmental organizations such as export credit agencies (ECAs), governmental, and multilateral agencies to push programmes focusing on the UN Sustainable Development Goals (SDGs).
“We should realize the sustainable development of society and expand ESG and SDG development within a diverse range of counterparties. In this context, this is a golden opportunity for us to find potential partners to push things forward. I am very excited to find potential partners for this development,” says Kawasaki.
While SMBC has formed partnerships with other foreign institutions in various businesses such as wealth management, this is the first time that Kawasaki has publicly stated the bank is seeking partners for ESG projects.
In 2017, SMBC reorganized its corporate social responsibility initiatives, which it started back in the 1990s, into an ESG programme with a focus on sustainability. It identified three SDG areas as mid-term priorities, namely the environment, decent work and economic growth, and climate action.
“We have reviewed our priority issues and derived three new themes - Environment, Next Generation, and Community, as our medium- to long-term priority issues that form the core of the SMBC Group's activities. For each theme, we are also focusing on where we want to be ten years from now by clarifying matters and issues to be addressed and taking action on them,” says Kawasaki.
For “Next Generation”, the priorities are linked to the three focus SDGs including quality education; decent work and economic growth; industry, innovation, and infrastructure; as well as community which is linked to poverty and sustainable cities and communities.
To achieve these goals, SMBC established the corporate sustainability committee which is spearheaded by the group’s chief executive officer.
Kawasaki explained that for the environmental aspect, starting from conventional banking, particularly lending and funding, SMBC has put the focus on its credit policy where it revised their policy to limit overseas financing to certain sectors.
In 2018, for example, the bank amended its credit policies by restricting financing to coal-fired power plants, known for generating heavy pollution. At the same time, the bank is actively supporting ecology-friendly projects like renewable energy.
SMBC also has a strong track record in providing project finance for renewable energy businesses in countries around the world. The bank actively conducts project finance for renewable energy projects overseas, in the Americas, Europe, and the Australia and Asia regions.
In fiscal 2016, the bank supported 44 high-quality project finance deals in fields such as new energy (20 solar energy, 17 wind energy, three geothermal energy, two hydropower, one biomass, one submarine power cable, one waste-to-energy. By region: 21 projects in the Americas, 13 in Europe, and 10 in Australia and Asia).
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