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CKD Signs Sustainability Linked Loan Agreement

March 31, 2023

CKD Signs Sustainability Linked Loan Agreement

CKD Corporation (Headquarters: Komaki City, Aichi, Japan, President: Katsuhito Okuoka) has concluded a loan agreement (hereinafter “this agreement”) with Sumitomo Mitsui Trust Bank, Limited (President: Kazuya Oyama) for a “Sustainability Linked Loan (hereinafter “SLL”)” in line with the Sustainability Linked Loan Principles established by the Loan Market Association (hereinafter “LMA” (*1)) and others.

This agreement aims to promote environmentally and socially sustainable economic activities and growth by setting a Sustainability Performance Target (hereinafter “SPT”) that is aligned with the Sustainability Goals based on borrowers’ management strategies and linking the borrowing terms and SPT performance.

Under our Corporate Philosophy, the Group aims to improve corporate value by contributing to the realization of a sustainable society. In particular, in order to contribute to “realization of a carbon-free society,” we are working on reducing CO2 emissions from medium to long-term by backcasting, based on net zero CO2 emissions in fiscal 2050, and are working to reduce CO2 emissions. The following SPT was established for this agreement, through which CKD will work toward the realization of a sustainable society.

Outline of the loan
(1) Effective date  : March 31, 2023
(2) Period of contract: 4 years
(3) Amount     : 5 billion yen
(4) Use of funds   : Capital for facilities
(5) KPI : CO2 emissions per unit of sales
(6) SPT : Reduction of CO2 emissions per unit of sales by 38% in FY2025 (compared to FY2013)

This SLL Agreement has received third-party opinions from Japan Credit Rating Agency, LTD. (hereinafter “JCR”) regarding the SLL principles stipulated by LMA, etc., compliance with the “Green Loan and Sustainability Linked Loan Guidelines” established by the Ministry of the Environment of Japan, and rationality of SPT established. For details, please refer to the release of the following URL, published by JCR.

(*1) LMA is an association aimed at improving liquidity, efficiency and transparency in syndicated loan markets in Europe, the Middle East and Africa with more than 700 member institutions in more than 60 countries.

[Inquiries concerning release materials]
CKD Corporation
Sustainability Promotion Department
Public Relations and Branding Group