Tokyo Tech Establishes Sustainable Bond Framework for Bond Issuance

Tokyo Tech will start issuing 40-year sustainable bonds for a total of JPY 30 billion from fiscal 2022.

Proceeds from the bonds will be used to realize the Tokyo Tech Cross-Campus Innovation Ecosystem 2031 (XCIE2031) initiative, which aims to build a unique campus innovation ecosystem where Tokyo Tech’s knowledge, talent and funding flow efficiently. on all three campuses of the Institute, and are connected to an organic and evolving network of industry-university-government collaboration both on and off campus.

Through the achievement of XCIE2031, the Institute aims to create new values ​​and industries – two goals that have been at the heart of Tokyo Tech since its founding – and, therefore, to pave the way for a better future with new knowledge and innovations.

Along with the bond issuance, the Institute has formulated the Sustainability Bond Framework, which assesses the “green” nature of the Institute’s teaching and research activities with green eligibility criteria. Tokyo Tech’s Sustainable Bond Framework has been third-party assessed by Rating and Investment Information, Inc. (R&I), which states that the framework complies with the 2021 Green Bond Principles, 2021 Social Bond Principles , the 2021 Sustainability Bond Guidelines and other principles and guidelines issued by the International Capital Market Association (ICMA).

Invest in the future

Tokyo Tech, Japan’s leading science and technology university, has a long history that began with the founding of Tokyo Vocational School, the Institute’s predecessor, in 1881. Tokyo Tech was selected as a Designated National University (DNU) by the Japanese government in March 2018. With the long-term goal of becoming the world’s leading science and technology university, the Institute sees the next decade leading up to its 150th anniversary in 2031 as a great leap forward. Over the next 10 years, the Institute will rise to the challenge of redefining science and technology while nurturing highly skilled global talent, executing the virtuous cycle of Tokyo Tech through major reforms in university management and systems of campus, and contributing to a better future society.

In addition to its sustainability bond issuance plans, Tokyo Tech has launched the Tamachi Campus Redevelopment Project, which includes a 75-year land lease agreement with commercial operators who will develop the land made available on the campus. of Tamachi and will manage operations during the lease period. The ground lease, which is expected to commence in fiscal 2026, will generate JPY 4.5 billion in revenue per year.

These revenues will be used to fund Tokyo Tech’s very long-term investment strategy. Of the approximately 230 billion yen that will be generated over the 75-year period (3 billion yen per year after tax), approximately 80 billion yen will be invested in “talent”, 100 billion yen will be invested in “the environment “. and 50 billion yen will be invested in “the future” through the creation of various funds.

Tokyo Tech Sustainability Bond Framework

Tokyo Tech’s Sustainable Bond Framework will help the Institute realize XCIE2031 by making the proceeds of Sustainable Bonds available for projects that redevelop Tokyo Tech’s campuses, create an advanced teaching and research environment, and ultimately form an ecosystem. diverse that serves as a base for talent from all over the world. the world, while contributing to carbon neutrality.

Based on its philosophy of creating new industries, Tokyo Tech aims to provide solutions to societal problems through innovation. The Institute has positioned integrated energy sciences as one of its priority areas in its DNU scheme, and will contribute to the achievement of carbon neutrality through the creation of the Laboratory for Zero Carbon Energy at the Research Institute innovation, the launch of the Tokyo Tech Green Transformation Initiative (GXI) and other efforts. A distinctive feature of Tokyo Tech’s Sustainability Bond Framework is that it assesses the “green” nature of the Institute’s decarbonization-related teaching and research activities with green eligibility criteria. This feature is not often associated with conventional sustainability bonds or green bonds.2 reduction etc. and commercialization oriented research and development funds etc. are highly valued.

An independent assessment of Tokyo Tech’s sustainability bond framework has been conducted by R&I. R&I’s second opinion states that the framework complies with the Green Bond Principles 2021, Social Bond Principles 2021, Sustainability Bond Guidelines 2021 and other principles and guidelines published by ICMA.

Product use

The funds will be used for projects that meet the following eligibility criteria:

Green Bond Eligibility Criteria

Social Link Eligibility Criteria

Activities falling under section 8(iv) of the Cabinet Order for the partial revision of the National University Society Act 2020 Enforcement Order, and activities considered part of the initiative 2031 on Tokyo Tech’s cross-campus innovation ecosystem that will serve as the foundation for solving societal problems through education and research

(“Social” character of Tokyo Tech’s teaching and research activities)

Eligible project

Tokyo Tech Cross-Campus Innovation Ecosystem Initiative 2031

Examples of Specific Efforts

1.
Redevelopment of the Suzukakedai campus into a global research hub
2.
Digital transformation, building resilient education and research infrastructure on campuses
3.
Establishment and maintenance of facilities that enable large-scale cutting-edge research and industry-university-government collaboration

Project evaluation and selection process

Projects that potentially fall under the Sustainability Bond Framework are selected by the Strategic Management Board, the body that oversees the Institute’s operational strategy under the direction of the President. After confirmation of compliance with the eligibility criteria for green and social bonds, the projects are voted on by the Board of Directors.

Revenue management

Tokyo Tech’s financial accounting system will be used to manage deposits and withdrawals. An audit firm will audit the financial statements of the Institute each fiscal year. Unrestricted funds will be managed or invested in cash or cash equivalents.

Reports

Fund allocation information will be disclosed annually until the full amount has been allocated to a qualifying project. The environmental and societal benefits of the project will also be disclosed annually until the sustainability bonds are repaid.

ICMA Sustainability Bond Framework and Principles

A sustainability bond is a form of financing for both green and social projects. A sustainability bond framework is a document in which the issuer explains that the funding complies with the Green Bond Principles 2021 and Social Bond Principles 2021 published by ICMA. The four essential components of alignment with these principles are 1. the use of funds, 2. the project evaluation and selection process, 3. the management of funds and 4. reporting. External assessments of framework content for compliance with various principles, etc. are recommended.

* In the case of conventional sustainable bonds and green bonds, eco-eligible projects (projects with positive environmental effects) such as the construction of green buildings, renewable energy projects, equipment and investment funds operations that have a direct impact on the environment through CO2 reduction, etc., and commercialization-oriented research and development funds, etc. are highly valued.

/Public release. This material from the original organization/authors may be ad hoc in nature, edited for clarity, style and length. The views and opinions expressed are those of the author or authors. See in full here.

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