Eco-business / Social Venture
April 15, 2004
Development Bank of Japan's New Loan Program Incorporates Environmental Ranking
Keywords: Climate Change Eco-business / Social Venture Government Manufacturing industry Non-manufacturing industry Policy / Systems
The Development Bank of Japan (DBJ), a government-affiliated financial institution, has worked out the details of a new loan program starting in spring 2004 to support environment-friendly management systems.
This program allows companies which pass the bank's environmental screening process to obtain a low-interest loan for their environmental projects. Based on the results of the screening process, the bank ranks qualified companies on a scale of three. Higher ranking companies will be offered loans on more favorable conditions. The bank will continue to monitor the business management of borrowers even after the contract has been signed. Besides offering low interest rates, the bank guarantees the company's bonds in order to support their environment-friendly management system.
The bank has prepared nine types of screening tests, two for manufacturing companies and seven for non-manufacturing companies, and will add additional tests if necessary. The maximum number of points in the screening process is 250, of which 200 correspond to general requirements and 50 can be awarded as a bonus given for particular excellence. The minimum score required is 120 for large enterprises and 110 for small and medium enterprises (SMEs). The screening process includes discussions with applicants, and these discussions are also expected to serve as consultations.
To make this program accessible for SMEs, the DBJ is allotting more points to quantitative requirements, including reduction of greenhouse gases, rather than qualitative ones that can be attained more easily by large companies such as institutional initiatives and the existence of specific systems. In addition, only SMEs will be granted points if they promise future improvement in environmental performance, such as taking preventive measures against global warming, even though they have not reached the required level at the time they sign the loan contract.
Prior to the loan program's launch in April 2004, the bank has already been receiving numerous inquiries from many companies. Starting with these loans limited to environmental projects, the DBJ will consider extending the loan program over the long run to any kind of project, by developing the screening criteria to include evaluation of corporate social responsibility (CSR).
Posted: 2004/04/15 06:38:57 PM
Japanese version
This program allows companies which pass the bank's environmental screening process to obtain a low-interest loan for their environmental projects. Based on the results of the screening process, the bank ranks qualified companies on a scale of three. Higher ranking companies will be offered loans on more favorable conditions. The bank will continue to monitor the business management of borrowers even after the contract has been signed. Besides offering low interest rates, the bank guarantees the company's bonds in order to support their environment-friendly management system.
The bank has prepared nine types of screening tests, two for manufacturing companies and seven for non-manufacturing companies, and will add additional tests if necessary. The maximum number of points in the screening process is 250, of which 200 correspond to general requirements and 50 can be awarded as a bonus given for particular excellence. The minimum score required is 120 for large enterprises and 110 for small and medium enterprises (SMEs). The screening process includes discussions with applicants, and these discussions are also expected to serve as consultations.
To make this program accessible for SMEs, the DBJ is allotting more points to quantitative requirements, including reduction of greenhouse gases, rather than qualitative ones that can be attained more easily by large companies such as institutional initiatives and the existence of specific systems. In addition, only SMEs will be granted points if they promise future improvement in environmental performance, such as taking preventive measures against global warming, even though they have not reached the required level at the time they sign the loan contract.
Prior to the loan program's launch in April 2004, the bank has already been receiving numerous inquiries from many companies. Starting with these loans limited to environmental projects, the DBJ will consider extending the loan program over the long run to any kind of project, by developing the screening criteria to include evaluation of corporate social responsibility (CSR).
Posted: 2004/04/15 06:38:57 PM
Japanese version
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