Sustainable Investing and Lending
ORIX Sustainable Investing and Lending Policy
ORIX recognizes that sustainability issues related to the environment, society, and governance may have a significant impact on long-term risks and opportunities, and that consideration of sustainability in ORIX's decision-making is an extremely important prerequisite for conducting business. We also believe that incorporating sustainability requirements into investment and financing considerations provides a better understanding of the risks and opportunities associated with our businesses and activities and benefits our customers and shareholders as a result.
ORIX formulated the ORIX Sustainable Investing and Lending Policy in September 2019—this policy is the basis for screening investment and lending transactions submitted to the Investment and Credit Committee (“ICC”) *1 from an ESG perspective with the mission of implementing sustainable investing and lending. The department applying for the transaction must conduct an evaluation using the Sustainable Investing and Lending Checklist*2 and include this checklist in its application materials to the ICC. The ICC then deliberates whether to approve the transaction after thorough consideration regarding environmental and social effects and potential impact. In addition to sovereign risks such as financial affairs and legislation, human rights risks are also key factors in investment and credit-related decisions in countries/regions determined as high risk in relation to human rights violations. The ICC may disallow a matter if it determines that the involved counterparty poses environmental or social risks.
- The Investment and Credit Committee is an executive body composed of senior managers and Executive Officers responsible for investment and lending; the committee discusses proposals that exceed specified amounts.
- A proprietary ORIX checklist based on international sustainability guidelines.
ORIX Sustainable Investing and Lending Policy, please refer to the following:
Establishment of Investing and Lending Prohibited Transactions
All investing and lending transactions involving companies, sectors, and business activities that fall under the following categories are prohibited.
- Organizations that carry out forced labor, child labor, human trafficking, or any other practices defined as human rights offenses by the UK Modern Slavery Act 2015
- Organizations that are operating in countries/regions determined as high risk in relation to human rights violations and have participated in human rights violations
- Sectors/business practices in which new transactions are prohibited
|Sectors/Business practices in which new transactions are prohibited
|Manufacturing, using, storing, and importing/exporting controversial weapons, including cluster munitions, anti-personnel landmines (violation of the Oslo/Ottawa Treaties), chemical weapons, biological weapons, depleted uranium ammunition, nuclear weapons, and firearms
|Manufacturing, using, supplying, and importing/exporting asbestos and other prohibited hazardous chemicals (violation of the Japanese Industrial Safety and Health Act)
|Manufacturing, using, and importing/exporting internationally prohibited agricultural chemicals, pesticides, and herbicides (violation of the Stockholm Convention on Persistent Organic Pollutants)
|Engaging in dynamite fishing, otherwise known as blast fishing (violation of the Act on the Protection of Fishery Resources)
|Handling specific prohibited wildlife (violation of the Convention on International Trade in Endangered Species of Wild Fauna and Flora, otherwise known as the Washington Convention)
|Engaging in business practices involving pornography or the sex trade
|Engaging in business practices involving illegal casinos
Exit Strategy for Existing Exposure to Business Areas with High Environmental Risk
ORIX has identified and set the following material issue and key sustainability goal as part of its exit strategy for existing exposure to business areas with high environmental risk.
|Formulate an exit strategy for existing exposure to business areas with high environmental risk and create bright-line exclusion criteria for any new investing or lending.
|Key sustainability goal
|Reduce investment in and lending to industries* that emit GHG (CO2) by 50% by the fiscal year ending March 31, 2030 compared to the fiscal year ended March 31, 2020.
Reduce investment in and lending to industries* that emit GHG (CO2) to zero by the fiscal year ending March 31, 2040.
* Refers to fossil fuel mining, palm oil plantations, and forestry financed by ORIX Group overseas subsidiaries.
Please refer to Material Issues and Key Sustainability Goals for our material issues and key sustainability goals.