Sustainable Finance
Background and Objective of the Issuance of 18th Series of Unsecured Straight Bonds
Based on the “Sustainability Medium- to Long-Term Plan 2030,” the Morinaga Milk Group (hereafter, “the Group”) positions the fiscal year ending March 2023 as a “starting line” year for its aim to achieve sustainability management. Accordingly, the Group plans to issue its first green bond (18th Series of Unsecured Straight Bonds) in October, as part of efforts to achieve business growth and make social sustainability a reality.
The Group has set forth its Corporate Philosophy as “contribute to healthy and enjoyable lifestyles through offering unique products derived from advanced milk technology,” based on the Corporate Slogan, “For Ever Brighter Smiles.” In the “Morinaga Milk Group 10-year vision,” which the Group formulated in order to achieve the Corporate Philosophy, the Group has set forth its vision to become “a company that balances ‘delicious and pleasurable food’ with ‘health and nutrition,’” “a global company that exerts a unique presence worldwide,” and “a company that persistently helps make social sustainability a reality,” which it uses as a guideline for various strategies, including the “Medium-term Business Plan 2022–2024” and “Sustainability Medium- to Long-Term Plan 2030.”
In the “Sustainability Medium- to Long-Term Plan 2030,” the Group has determined targets and KPIs through FY2030, based on the three themes of “Food and Wellness,” “Resources and the Environment,” and “People and Society,” which it places at the core of management.
At the same time, the Group is also promoting initiatives that are mutually linked with the “Medium-term Business Plan 2022–2024.” The Group will allocate the funds raised from the issuance of these green bonds to initiatives targeting “Mitigation of and Adaptation to Climate Change,” “Environmental Consideration and Resource Recycling,” and “Sustainable Raw Material Procurement,” which are Priority Issues under the “Resources and the Environment” theme. Through the issuance of these green bonds, the Group will further accelerate efforts to achieve business growth and make social sustainability a reality.
Green bonds: Bonds that are used to fund projects that improve the environment
Click here for details on the Medium-Term Management Plan 2022-2024
Click here for details on the Sustainability Medium- to Long-Term Plan 2030
Overview of 18th Series of Unsecured Straight Bonds
| Name of bonds | 18th Series of Unsecured Straight Bonds of Morinaga Milk Industry Co., Ltd. (with Inter-bond Pari Passu Clauses) (Green Bonds) |
| Maturity | Three years |
| Issue amount | 5.0 billion yen |
| Time of issuance | From 31th October 2022 |
| Interest rate | 0.230% |
| Use of funds |
(1) Capital investment in “MO-Lagoon for Dairy,” a manure processing and biogas power generation system for dairy and livestock farming (2) Purchase of Green Power Certificates (3) Introduction and upgrades to equipment that will improve energy efficiency by an average of 30% or more for ice banks (cooling water systems, refrigerators, etc.) used in the Company’s business activities (4) Upgrades to refrigeration facilities that use freon gas HCFC refrigerants (R22, etc.) (5) Investment to increase capacity at wastewater treatment facilities that contribute to water quality conservation (6) Introduction of container manufacturing equipment (making lighter plastic containers) (7) Purchase expenses for FSC®*-certified paper for use in containers and packaging |
| Lead underwriters | Nomura Securities Co., Ltd., Mizuho Securities Co., Ltd. |
| Structuring agent*2 | Nomura Securities Co., Ltd. |
FSC® certification: Forest Stewardship Council. An international certification system for wood from forests managed responsibly, in ways that serve social interests and are also economically sustainable, as well as related products.
Structuring agent: Refers to the entity that will support the issuance of the green bonds through the formulation of a Green Bond Framework, advice on the acquisition of third-party evaluations, etc.
Third-party Assessment of Framework and Eligibility
For the issuance of these green bonds, the Company has formulated a Green Bond Framework that contains information on policies related to the four factors set forth in the International Capital Market Association (ICMA)’s “Green Bond Principles 2021” and the Ministry of the Environment’s “Green Bond Guidelines 2022” (1. Use of Proceeds, 2. Process for Project Evaluation and Selection, 3. Management of Proceeds, and 4. Reporting).
The Company has obtained a second-party opinion from Rating and Investment Information, Inc. (R&I), a third-party institution, in relation to conformance with the above “Green Bond Principles 2021” and the “Green Bond Guidelines 2022.”
Rating and Investment Information, Inc. Second Party Opinion (September 2022)
List of investors who declared investment (in the order of the 50-character kana syllabary)
- Asset Management One Co., Ltd.
- The Awa Bank, Limited.
- The Kanagawa Bank, Ltd.
- The Kofu Shinkin Bank
- Shibata Shinkin Bank
- The Juroku Bank, Ltd.
- Suwa Shinkin Bank
- The Dai-ichi Frontier Life Insurance Co.,Ltd.
- Tokio Marine Asset Management Co., Ltd.
- The Tono Shinkin Bank
- North Pacific Bank, Ltd.
- JA-Bank Hokkaido
- Mitsui Sumitomo Insurance Company, Limited
- Sumitomo Mitsui Trust Asset Management Co., Ltd.
- Sumitomo Mitsui DS Asset Management Company, Limited
- Meiji Yasuda Asset Management Company Ltd.
Green Bonds Reporting (end of March, 2024)
Fund allocation reporting
| ICMA GBP Category | Amount allocated (million yen) |
|---|---|
| Renewable energy | 677 |
| Energy efficiency | 8 |
| Pollution prevention and control | 183 |
| Sustainable water and wastewater management | 90 |
| Projects related to circular economy adapted products, production technologies and processes, and eco-efficient products |
1,955 |
| Total | 2,913 |
| Unallocated amount | 2,087 |
* The unallocated amount is managed as cash and cash equivalents, and is planned to be allocated by the end of December 2024.
| New finance | 0% |
| Refinance | 100% |
Impact reporting (April 2022～March 2024)
| ICMA GBP Category | Overview of eligible projects | Impact reporting |
|---|---|---|
| Renewable energy | Capital investment in “MO-Lagoon for Dairy” at the Nasu Gakuroku Dairy Farm |
|
| Purchase of Green Power Certificates | Purchased Green Power Certificates: 6,000,000 kWh | |
| Pollution prevention and control | Replacement of five refrigeration facilities that use freon gas HCFC refrigerants |
|
| Sustainable water and wastewater management | Investment to increase the capacity of wastewater treatment facilities at the Fuji Plant |
|
| Projects related to circular economy adapted products, production technologies and processes, and environment-friendly products | Purchase of FSC®-certified paper for use in containers and packages | Purchased amount: 1,997 t |
*1:Planned to be disclosed after startingoperation
Background and Objective of the Issuance of 19th Series of Unsecured Straight Bonds
"Based on the corporate slogan “For Ever Brighter Smiles,”the Group has set forth its corporate philosophy as “contribute to healthy and enjoyable lifestyles through offering unique products derived from advanced milk technology.” In the “Morinaga Milk Group 10-year vision,” which was formulated in order to achieve the corporate philosophy, the Group has set forth its vision to become “a company that balances ‘delicious and pleasurable food’ with ‘health and nutrition,’” “a global company that exerts a unique presence worldwide,” and “a company that persistently helps make social sustainability a reality,” which the Group uses as guidelines for various strategies, including the “Medium-term Business Plan 2022–2024” and “Sustainability Medium- to Long-Term Plan 2030.” In the Sustainability Medium- to Long-Term Plan 2030, the Group has set targets and KPIs toward FY 2030 based on the three themes of “Food and Wellness,” “Resources and the Environment,” and “People and Society,” while placing them at the core of management, and has been advancing various initiatives while mutually linking this plan with the Medium-term Business Plan 2022–2024. The Group will allocate the funds raised from the issuance of these green bonds to the costs of manufacturing building extension at the Kobe Plant. By extending the manufacturing buildings with high energy-saving performance, the Group will promote GHG reduction efforts, while aiming to achieve sustainable growth through environmentally friendly manufacturing activities for ice cream and yogurt as well as expanding its manufacturing capacity in the future. Through the issuance of these green bonds, the Group will further accelerate efforts to achieve business growth and make social sustainability a reality."
Green bonds: Bonds that are used to fund projects that improve the environment
Click here for details on the Medium-Term Management Plan 2022-2024
Click here for details on the Sustainability Medium- to Long-Term Plan 2030
Overview of 19th Series of Unsecured Straight Bonds
| Name of bonds | 19th Series of Unsecured Straight Bonds of Morinaga Milk Industry Co., Ltd. (with Inter-bond Pari Passu Clauses) (Green Bonds) |
| Maturity | Seven years |
| Issue amount | 10.0 billion yen |
| Interest rate | 1.092％ |
| Pricing date | 30th May 2024 |
| Issuance date | 5th June 2024 |
| Maturity date | 5th June 2031 |
| Use of funds | For the costs of extending the manufacturing buildings at the Kobe Plant |
| Bond rating | A (Single A) (Rating and Investment Information, Inc. (R&I)) |
| Lead-managing underwriters | SMBC Nikko Securities Inc., Mizuho Securities Co., Ltd., Nomura Securities Co., Ltd., Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., and Daiwa Securities Co. Ltd. |
| Structuring agent*1 | SMBC Nikko Securities Inc. |
| Outside assessment | To formulate a Green Bond Framework, the Company has obtained a second-party opinion from Rating and Investment Information, Inc. (R&I) stating that the Company complies with the principles, etc. |
*1Structuring agent: Refers to the entity that will support the issuance of the green bonds through the formulation of a Green Bond Framework, advice on the acquisition of third-party evaluations, etc.
Third-party Assessment of Framework and Eligibility
For the issuance of these green bonds, the Company has formulated a Green Bond Framework that contains information on policies related to the four components set forth in the International Capital Market Association (ICMA)’s Green Bond Principles 2021 and the Ministry of the Environment’s Green Bond Guidelines 2022 (1. Use of Proceeds, 2. Process for Project Evaluation and Selection, 3. Management of Proceeds, and 4. Reporting).
The Company has obtained a second-party opinion from Rating and Investment Information, Inc. (R&I), a third-party institution, in relation to conformance with the Green Bond Principles 2021 and the Green Bond Guidelines 2022 mentioned above.
Rating and Investment Information, Inc. Second Party Opinion (May 2024)(4,377KB)
List of investors who declared investment (in the order of the 50-character kana syllabary)
- JA Aichi Bito
- The Alupuschuo Shinkin Bank
- The Iida Shinkin Bank
- IWASE SANGYO Co., Ltd.
- Kagoshima Shinkin Bank
- The Gamagori Shinkin Bank
- Kanonji Shinkin Bank
- JAPAN POST INSURANCE Co., Ltd.
- The Kitaosaka Shinkin Bank
- Kurayoshi Shinkin Bank
- Koto Shinkin Bank
- The Sawayaka Shinkin Bank
- The Gibraltar Life Insurance Co., Ltd.
- Shimada Kakegawa Shinkin Bank
- The Showa Shinkin Bank
- The Sendai Bank, Ltd.
- Daitokyo Shinyokumiai
- Tajima Shinkin Bank
- The ChibaBank, Ltd.
- Tokio Marine Asset Management Co., Ltd.
- Toshun Shinkin Bank
- The Toho Bank, Ltd.
- Nagano Shinkin Bank
- Nakahyogo Shinkin Bank
- Niigata Shinkin Bank
- Nissay Asset Management Corporation
- The Numazu Shinkin Bank
- The Neo First Life Insurance Co., Ltd.
- Hanno-Shinkin Bank
- Bizen Hinase Shinkin Bank
- JA Hida
- The Hiroshimaken Credit Cooperative
- BlackRock Japan Co., Ltd.
- JA-Bank Hokkaido
- Hokkaido Rokin
- The Mishima Shinkin Bank
- Meiji Yasuda Asset Management Company Ltd
- JA Yamaguchi Shinren
- Resona Asset Management Co., Ltd.
Green Bonds Reporting
Fund allocation reporting
| ICMA GBP Category | Amount allocated(million yen) |
|---|---|
| Green building/Energy efficiency | 10,000 |
| Amount | 10,000 |
| New finance | 0% |
| Refinance | 100% |
Impact reporting
| ICMA GBP Category | Overview of eligible projects | Impact reporting |
|---|---|---|
| Green building/Energy efficiency | Extension of manufacturing buildings at the Kobe Plant (BEI (*1)：0.52） |
|
*1 BEI, which stands for Building Energy-efficiency Index, is an indicator showing the extent to which a building has been able to reduce energy consumption when the national standard for energy consumption is set at 1. The lower the BEI value, the higher energy efficient the building is; in the case of BEI=0.52, that building has energy saving performance of saving 48% of the nationally set energy consumption.
*2 Planned to be disclosed after starting operation
Information related to sustainability
Initiatives related to the Morinaga Milk Group sustainability are released on the Sustainability News site.