Mitsui OSK Lines said it has penned Japan’s first committed credit line tied to the company’s efforts to take action on reducing greenhouse gases to address climate change.
The Japanese company, a diversified shipowner, has finalised the commitment line agreement through a transition-linked loan with Tokyo-based Sumitimo Mitsui Banking Corp.
The loan is for ¥60bn ($450m) and will be used by MOL for business expenses over five years. This is the first transition-linked loan that MOL has taken out to finance something other than a ship.
Takeshi Hashimoto-led MOL had previously taken out transition-linked loans with the bank in November 2021 to finance an LNG bunkering vessel chartered to TotalEnergies and, in October 2022, a bulk carrier fitted with sails.
The latest transition-linked loan, which was assessed by a unit of classification society DNV, must comply with several financing guidelines that are focused on methods to lower emissions.
They include the International Capital Markets Association’s Climate Transition Finance Handbook and the Basic Guidelines on Climate Transition Finance published by the Financial Services Agency, Ministry of Economy, Trade and Industry and Ministry of the Environment.
The loan must also adhere to the Sustainability Linked Loan Principles published by the Loan Market Association International and the Ministry of the Environment’s Sustainability Linked Loan Guidelines.
MOL said it plans to achieve net-zero greenhouse gas emissions by 2050.
“Through this loan, the group will carry forward its environmental strategy from the aspect of financing and contribute to the realisation of a low-carbon/decarbonised society through concerted group-wide efforts,” the company said.
