Sustainable Finance
Background and Objective of the Issuance of Green 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 the Green 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
Green Bonds Reporting (end of March, 2023)
Fund allocation reporting
| ICMA GBP Category | Amount allocated (million yen) |
|---|---|
| Renewable energy | 9 |
| Pollution prevention and control | 5 |
| Projects related to circular economy adapted products, production technologies and processes, and eco-efficient products |
605 |
| Total | 619 |
| Unallocated amount | 4,381 |
* The unallocated amount is managed as cash and cash equivalents, and is planned to be allocated by the end of December 2024.
| New finance | 100% |
| Refinance | 0% |
Impact reporting
| ICMA GBP Category | Overview of eligible projects | Impact reporting |
|---|---|---|
| Renewable energy | Purchase of Green Power Certificates | Purchased Green Power Certificates: 3,000,000 kWh |
| Pollution prevention and control | Three refrigeration facilities that use freon gas HCFC refrigerants replaced with refrigeration facilities that use non-ozone depleting refrigerants |
Reduction in amount of freon gas HCFC leakage: 116 t (CO2 equivalent) |
| Projects related to circular economy adapted products, production technologies and processes, and eco-efficient products |
Modifications to small capacity PET bottle filling equipment at Tone Plant |
Reduction in amount of plastic used for containers with modified equipment: 64 t |
| Purchase expenses for FSC®-certified paper for use in containers and packaging |
Purchased FSC®-certified paper: 1,469 t |
Information related to sustainability
Initiatives related to the Morinaga Milk Group sustainability are released on the Sustainability News site.