Project Details
Project
Ajinomoto Co., Inc. Sustainability Linked-Financing Framework Second-Party Opinion (2023)
Client
Ajinomoto Co., Inc.
Project Type
Sustainability Linked Bond or Note; Sustainability Linked Loan;
Industry Group
Food Products
Use of Proceeds
N/A
Location
Japan
Evaluation Date
May 2023
Evaluation Summary
Sustainalytics is of the opinion that the Ajinomoto Co., Inc. Sustainability Linked-Financing Framework aligns with the Sustainability-Linked Bond Principles 2020 (SLBP) and Sustainability-Linked Loan Principles 2023 (SLLP).
Selection of Key Performance Indicators
The Ajinomoto Co., Inc. Sustainability Linked-Financing Framework includes two KPIs: i) Absolute scope 1 and 2 GHG emissions reduction rate; and ii) Scope 3 GHG emissions reduction rate per volume unit (see Table 1). Sustainalytics considers the KPIs to be very strong based on materiality and relevance, scope of applicability, clear and consistent methodology, which is externally defined and ability to be externally benchmarked.
Calibration of Sustainability Performance Targets
Sustainalytics considers the SPTs to be aligned with Ajinomoto Co., Inc.’s sustainability strategy. Sustainalytics further considers SPT 1 to be highly ambitious and SPT 2 to be ambitious based on past performance, peer performance and alignment with science-based trajectories.
Bond and Loan Characteristics
Ajinomoto Co., Inc. will link the financial characteristics of the sustainability-linked bonds and loans to the achievement or non-achievement of the SPTs. The financial characteristic adjustments, such as an interest rate step-up, donations or purchase of emission credits, will be triggered in the case that: i) any of the SPTs has not been achieved by its target observation date; or ii) the verification of the KPI performance against the SPTs has not been provided and made public in a timely manner as set out in the legal documentation of the relevant financing. Ajinomoto Co., Inc. will specify information related to KPIs, SPTs and changes in financial characteristics in the relevant issuance documentation.
Reporting
Ajinomoto Co., Inc. commits to reporting annually on its progress of the KPIs on its website. Ajinomoto Co., Inc. also commits to disclosing relevant information that may affect the KPI, such as changes in its sustainability strategies and implementation of action plans. The reporting commitments are aligned with the SLBP and SLLP.
Verification
Ajinomoto Co., Inc. commits to having external limited assurance conducted against each SPT for each KPI at least once a year. The verification commitments are aligned with the SLBP and SLLP.