Positive Impact Finance Agreement with MUFG Bank

In March 2022, MHI concluded a loan agreement for Positive Impact Finance (financial products for corporate with unspecified use of funds) with MUFG Bank, Ltd.(Note1) (contract amount JPY 2.0 billion yen) .
In concluding this agreement, the following themes were selected from MHI Group's materiality issues and other topics as activities that contribute to achieving the UN SDGs (Sustainable Development Goals). Mitsubishi UFJ Research and Consulting Co., Ltd. carries out qualitative and quantitative evaluations, and MHI has obtained third-party opinions from the Japan Credit Rating Agency, Ltd.(Note2) regarding the compliance of its evaluation procedures with the Principles for Positive Impact Finance and the reasonableness of the performance indicators used for evaluation.
The results of these measures will be disclosed on the MHI website and the MHI Group Integrated Report, etc.

Theme	Content	Targets and Indicators (KPIs)	SDGs
Provide energy solutions to enable a carbon neutral world	Strive to continue using existing facilities and promote carbon recycling by significantly improving energy efficiency, capturing and fixing CO2, introducing carbon-free fuels, and expanding the use of nuclear power and renewable energies that meet the world's highest safety standards.	[ Targets ] Decarbonize the MHI Group’s business activities by 2040 (Scope1, Scope2) Contribute to building up energy infrastructure toward a carbon neutral world by 2050 Contribute to decarbonization in the energy demand sector by 2050 Contribute to building circular economy [ KPIs ] Scope1, Scope2 emissions Contributing to CO2 Reduction through Product-Use Renewable Energy Use Amount of renewable energy facility installed
Transform society through AI and digitalization	Seek to realize a society that balances economic development with the resolution of social issues (Society 5.0) by breaking away from preconceived notions and maximizing the use of AI and digitalization	[ Targets ] Expand lineup of convenient and sustainableAI/digital products that meeting needs of customers and user Create a future-oriented energy management structure Build a foundation to produce creative products [ KPIs ] Status of Initiatives Related to Targets
Build a safer and more secure world	Contribute to the development of society by building critical infrastructure and taking on challenges in the unknown worlds of space and the deep sea. By drawing on this wealth of knowledge and experience, we will build a flexible, robust, and labor-saving system that will contribute to the realization of a safer and more secure society.	[ Targets ] Make critical infrastructure more resilient Make critical infrastructure unmanned or requiring fewer people Continuously strengthen cybersecurity measures for all MHI products Commercialize cross-domain security technologies Develop engineers keenly aware of safety and security needs in all products [ KPIs ] Status of Initiatives Related to Targets
Promote diversity and improve employee engagement	Support the growth and health of human resources through the promotion of diversity and health management. Our goal is to train human resources who are full of vitality and can contribute to society not only during their employment but also after retirement.	[ Targets ] Create new value through participation of diverse human resources Ensure safe and comfortable workplaces Support the health and vitality of employees, so they can contribute to society Foster self-sustaining growth in all employees Increase employee engagement [ KPIs ] Employment ratio of the disabled Number of Female Managers Percentage of Female Employees Female management level ratio Percentage of Female Employees in the General Manager Level Percentage of Female Directors and Audit & Supervisory Board Members Percentage of Female Employees in Managerial Positions at Profit Centers
Enhance corporate governance	Promote compliance management and strengthen internal controls to ensure compliance with laws and regulations and promote honest, fair, and equitable business practices. We will promptly identify opportunities and risks for the organization and take appropriate action. In addition, to earn the trust of society, we will implement timely and appropriate information disclosure regarding management, while ensuring fairness and transparency.	[ Targets ] Further improve Board of Directors meetings Promote legal compliance and honest and fair business practices Further promote responsible (CSR) procurement in the global supply chain Create opportunities to explain non-financial information [ KPIs ] Number of compliance violations Number of violations of advertising Number of environmental-related violations Number of companies familiar with the CSR Procurement Policy Number of suppliers evaluated over the past three years
Reduce environmental Impact	Reduce water consumption	[ Targets ] Improve water consumption per unit of production in fiscal 2023 by 7% compared to fiscal 2014 (water: industrial water, water supply, groundwater, rivers, lakes, and seawater are excluded) [ KPIs ] Water consumption per basic unit
Reduce environmental Impact	Reduce volume of waste generated	[ Targets ] 7% improvement in waste emissions per unit of production in fiscal 2023 compared to fiscal 2014 (excluding valuable resources but including hazardous waste) [ KPIs ] Landfill waste reduction per unit production

• Third-Party Opinion for MUFG Bank, Ltd.’s Positive Impact Finance to Mitsubishi Heavy Industries, Ltd.
• News dated March 14, 2022
  MHI Concludes Positive Impact Finance Agreement (Financial Products for Corporate with Unspecified Use of Funds)

• 1Positive Impact Finance (PIF), based on the Principles for Positive Impact Finance and implementation guidelines formulated by the United Nations Environment Programme Finance Initiative (UNEP FI), is a loan intended to provide continuous support for corporate activities while comprehensively analyzing and evaluating the impacts (both positive and negative) those activities have on the environment, society, and the economy. The key feature of PIF is the use of the degree of contribution to achieving the SDGs through corporate activities, products, and services as an evaluation indicator, and monitoring based on disclosed information.
  United Nations Environment Programme (UNEP)
  The UNEP is an auxiliary agency of the UN established in 1972 to implement the Human Environment Declaration and the International Environmental Action Programme. The United Nations Environment Programme Finance Initiative (UNEP FI) is a broad-based, close partnership between the UNEP and more than 200 global financial institutions. Established in 1992, UNEP FI coordinates with financial institutions, policy agencies, and regulatory bodies to facilitate a shift to financial systems that integrate economic development with environmental, social, and governance (ESG) considerations.
  Principles for Positive Impact Finance
  The Principles for Positive Impact Finance, formulated by the UNEP FI in January 2017, is a financial framework for achieving SDGs. Companies disclose their contributions to achieving SDGs as KPIs. Banks then assess the positive impact of those contributions and provide funding to enhance the beneficial impacts of that company, and to encourage reduction of negative impacts. Banks provide funds as responsible financial institutions, monitoring the KPIs to confirm that the impacts are ongoing.
• 2Further information on the Japan Credit Rating Agency, Ltd. is available at:
  https://www.jcr.co.jp/en/

Reference Links

• MHI Group Sustainability