The Shinsei Bank Group's Renewable Energy Initiatives
Since 2012, Shinsei Bank has been accumulating knowhow about deal origination, risk management and other matters through the provision of financing for renewable energy projects involving solar power, wind power, biomass and geothermal energy and has been expanding the base of domestic project financing investors as well as promoting syndication with regional financial institutions.
As we enhance our efforts to diversify power sources, in fiscal 2018 we financed a wind power project in Ishikawa Prefecture and an offshore wind power project in the United Kingdom. As of March 31, 2019, wind power accounts for approximately 8% of the approximately ¥260 billion total balance of domestic project finance (including committed amounts), and 21% of the approximately ¥170 billion total balance of overseas project finance (including committed amounts).
As a market leader in domestic renewable energy projects, the Shinsei Bank Group will continue to contribute to the development of the renewable energy market in Japan and to solve environmental and energy issues through the renewable energy business using diverse power sources.
Under the Group ESG Management Policy, the Shinsei Bank Group prohibits new investment and lending to coal-fired thermal power plants, in principle. However, in the case of ultra-supercritical pressure coal-fired thermal power plants or power plants with the same or higher levels of efficiency, a careful assessment of many factors is made. This ssessment includes the power generation efficiency of the power plant in question, as well as technologies used to reduce greenhouse gas emissions, and other considerations pertaining to each individual power plant, with reference to guidelines such as the OECD Arrangement on Officially Supported Export Credits, and in full consideration of the situation in each country and international conditions relating to coal-fired thermal power plants.
Business Model Addressing Societal Needs by Promoting Reuse
Harnessing its expertise and corporate network cultivated through the leasing business, Showa Leasing is focusing on its business as a broker-dealer buying and selling used equipment. Tozai Boeki Co., Ltd., which became a wholly-owned subsidiary of Showa Leasing in November 2015, holds three parade auctions a year, where participants bid on used construction machines that are driven out and auctioned in front of bidders one at a time. Many buyers from developing countries come to these auctions, and the Japanese-made construction machinery auctioned off are exported overseas where they support infrastructure-building in emerging markets including China and other countries in Southeast Asia. In fiscal 2018, the transaction value totaled ¥6.7 billion (up 10% from the previous fiscal year), and the transaction value has been on the rise in recent years. Going forward, the Shinsei Bank Group will continue to promote the reuse of well-maintained used Japanese made machinery that meets environmental standards.
Reverse Mortgages for Seniors
-Curbing the Rise in Unoccupied Homes by Helping People Stay in their Homes for their Entire Life
APLUS, a subsidiary of APLUS FINANCIAL, has been offering pre-owned housing purchase/resale loans to real estate operators since 2017. This initiative provides financing to real estate operators for purchasing pre-owned housing, renovation work, as well as various other expenses, thereby helping to raise the value of pre-owned homes through renovation and invigorate the market. This program contributes to the revitalization of the market for pre-owned homes, primarily targeting young people and families with children.
In addition, with the rapidly declining birthrate and aging population, there is also a need to provide financial support to allow elderly people to continue to have fulfilling lives independently in their homes for the rest of their life. In 2018, we started offering reverse mortgages to seniors with the aim of helping seniors over the age of 60 who own their own home but are struggling to pay bills due to a decline in income and other factors in order for them to continue to stay in their home with peace of mind and continue to have a fulfilling life. Using their homes as collateral, reverse mortgages help people stay in high-quality "final abodes" that allow them to live a safe, healthy, and comfortable life by providing mortgage refinancing or renovation funds for the rest of their life. As a result, reverse mortgages also help curb the increase in unoccupied homes.
Through these initiatives, the Shinsei Bank Group is providing solutions to help address the low birthrate and aging population as well as the associated problem of the rise in the number of unoccupied homes.
Addressing the Plastic Problem through Investment
-Supporting a Company Developing Material as a Plastic Alternative
With environmental pollution from ocean plastics and other waste having become a global problem, the Shinsei Bank Group made an investment in TBM Co., Ltd., a Japanese venture company that develops, produces, and sells LIMEX, a new material made primarily from limestone. LIMEX is drawing attention as a material that is both eco-friendly and economical. Using LIMEX, which employs a very limited amount of petroleum-based material, as an alternative to plastic, will allow for manufacturing costs to be reduced going forward, while limestone, the raw material for LIMEX, is abundant in Japan, with a self-sufficiency ratio exceeding 100% and there are no concerns about depletion.
TBM is accelerating its efforts to contribute to the transition to a sustainable circular economy. Examples include upcycling recyclable LIMEX as a more valuable plastic alternative and developing and spreading the use of biodegradable LIMEX. In addition to expecting returns on this investment, the Shinsei Bank Group will support TBM's initiatives to help realize a sustainable society via financing and business matching.
Participating in Arakawa Clean Aid to Address the Plastic Problem
-Raising Employees' Awareness of Environmental Problems and Contributing to the Local Community
The Shinsei Bank Group has been participating in the Arakawa Clean Aid program run by the Arakawa Clean Aid Forum, an NPO, since 2009. More than 380 people in total have participated in waste pickup surveys in the Arakawa River riverbed to check the amount and types of waste. The most prevalent types of scattered waste on the Arakawa River are plastic waste, including plastic beverage bottles, plastic food bags, and plastic containers.
Even after cleaning up the waste, new waste floats ashore again and starts to accumulate in about a month. It is said that 50-80% of the waste in the ocean comes from land, and participants in the program learn through firsthand experience that a large amount of waste is flowing out from Tokyo Bay and into the ocean, and also learn that collecting it before it gets to the ocean is critical because plastic waste left in the riverbed is degraded by ultraviolet light as well as the wind and waves, and eventually becomes microplastic which is even harder to recover. In addition to raising the environmental awareness of employees, this program also provides an opportunity to recognize that we are responsible for solving environmental problems as a member of the local community.