Despite the growing movement especially among large companies to incorporate SDGs into corporate management, many small- and medium-sized enterprises (SMEs) in Japan are yet to implement SDGs initiatives. To address this situation, SMBC launched a loan product in October 2018. Designed to promote SDGs at SMEs, the product includes a subsidy that partially pays the credit guarantee fee of clients who have prepared a management plan that helps them examine their SDGs initiatives. During the loan period, SMBC will provide support such as information provision for clients to achieve their management plan.
As mentioned above, there is a growing movement in Japan, especially among large companies, to incorporate SDGs into their business management in response to the rising momentum to promote ESG investments and SDGs initiatives among governments, economic organizations and so on. On the other hand, a report by the Ministry of the Environment of Japan points to the scarcity of SDGs initiatives by SMEs.
SMBC supports our clients’ efforts to achieve SDGs. We developed this product to help SME clients find new business opportunities and build relationships with stakeholders through incorporating SDGs in their business management. We believe that application of this product will ultimately contribute to the spread of SDGs
We develop, jointly with the Japan Research Institute, Limited (JRI), models for the management plans which clients will prepare. JRI offers research and consulting services in the ESG/SDGs field in order to ensure objectivity and reliability in the preparation process of management plans that will contribute to SDGs.
(1) SMBC and JRI jointly develop a model SDGs management plan format and an operation manual.
(2) SMBC proposes the product to a client and helps them prepare an SDGs management plan.
(3) The client submits a credit guarantee request to a Guarantee Agency together with their SDGs management plan.
(4) The Guarantee Agency approves the request for a credit guarantee.
(5) SMBC disburses the loan to the client and the local government provides a subsidy to pay part of the credit guarantee fee.
(6) The client repays the loan to SMBC.
Preparing an SDGs management plan enables clients to focus their vision, identify specific SDGs linked to their actions for achieving the vision, and forecast the impact of such actions.
Eleven companies have taken out this loan as of February 13, 2019.
Some of the clients who have used this loan have reported the increased level of awareness of SDGs among their employees. In addition, we have received inquiries from multiple local governments, regional banks, and shinkin banks who wish to consider similar loan schemes in support of SDGs. We are also having discussions on the development of institutional loans that support the SDGs initiatives of SMEs in other regions. No negative impacts have been reported since the launch of the product. This loan is available to all SMEs that aim to build a sustainable society, and it is not concentrated on a particular industry sector (no one is left behind). It is expected to contribute to expanding the scope of SDGs initiatives.
The development SDGs management plans specifically designed for SMEs and the support SMBC provides to them for the preparation of their own SDGs management plans are innovative approaches that have never been used. Although all SMEs have a vision and management philosophy, they did not have the tools to simply and easily visualize how they are linked to SDGs. Preparing this plan helps them easily understand this connection.
This loan offers economic benefits as the local government partially subsidizes clients’ borrowing cost. In addition, SMBC lists the company name and logo of the clients who have used this loan on our website, which demonstrates their commitment to SDGs. When rolling out this product to other regions in the future, we will customize it to suit each region, such as certifying SDGs companies if the local government does not have sufficient funding. This approach is expected to lead to the further use of the product.
By offering this product, SMBC will support our SME clients in incorporating SDGs into their management and using SDGs in finding new business opportunities and building relationships with stakeholders. We will continue our partnership with our clients while striving to ensure that no one is left behind and to achieve the vision of a sustainable society at all companies.
＜Press Release＞(Japanese only)