Sumitomo Mitsui Banking Corporation Green Deposit Framework
24 May 2023
1. Introduction
1.1 About the Bank
Sumitomo Mitsui Banking Corporation (“SMBC” or the “Bank”) is one of the threelargest banking groups in Japan and fully held by Sumitomo Mitsui Financial Group(“SMFG” or “SMBC Group”). SMBC is the main operating bank among SMFG. SMFG
is designated as one of the global systemically important banks (“G-SIBs”) inrecognition of its broad range of financial services in both domestic and overseas
markets, including banking, leasing, securities, credit cards, and consumer finance.
1.2 The Bank’s approach to Sustainability
SMBC Group defines sustainability as “creating a society in which today’s generation
can enjoy economic prosperity and well-being, and pass it on to future generations”.
SMBC Group identifies efforts to realize sustainability as the foundation of thegroup’s business strategies, with a particular focus on the “Environment”, “DE&I /Human Rights”, “Poverty & Inequality”, “Declining Birthrate & Aging Population”
and “Japan’ Regrowth” as its materiality issues.
1.3 SMBC Group’s Environmental Policies
Based on the SMBC Group Statement on Sustainability and the Group Environmental
Policy, SMBC Group is making efforts to resolve environmental and social issues
through its businesses, such as providing project finance for renewable energy
businesses, and reducing greenhouse gas emissions.
Concerning climate change issues, SMBC Group has systematized series of goals
and actions to achieve net zero emissions as the “Net Zero Transition Plan”. In lightof this regard, we have set several targets as below:i) Achieve net zero emissions through SMBC Group’s overall investment and loan
portfolio by 2050ii) Achieve net zero emissions in SMBC Group’s own operation by 2030iii) Execute total of JPY 50 trillion of finance contributing to sustainability (of which1© 2023 Sumitomo Mitsui Banking Corporation. All Rights Reserved.

JPY 20 trillion of green finance) from FY2020 to FY2029iv) Achieve zero balance of outstanding loans of coal-fired thermal power generationby 2040 (applicable to project finance and corporate finance tied to facilities*; Midterm target for project finance is to halve our loan balance by FY2030 compared toFY2020)v) Achieve zero balance of outstanding loans of the thermal coal mining sector by2030 in OECD nations, and by 2040 in non-OECD nations.
* Excluding projects contributing to the transition to a decarbonized society and thetransformation from fossil fuel businesses.
In addition, SMBC Group promotes its business activities based on international
principles such as the UN Global Compact and the Equator principles.
1.4 Intent of the Framework
Sumitomo Mitsui Banking Corporation Green Deposit Framework (“Framework”) isto establish and develop a green deposit product (“Green Deposit”) for SMBC andits affiliates globally, while setting out underlying eligible qualifying environmental
themes and activities. SMBC and its affiliate will use the Framework to guide thedevelopment of Green Deposit and ensure that all transactions categorized as theGreen Deposit will adhere to the Framework. Based on the criteria in the clause 2
under this Framework, the proceeds from the Green Deposit will be allocated toassets held by SMBC and its affiliates and will be managed and tracked through aportfolio approach. The Framework has been published on its website.
1.5 Internal and External Review Process
SMBC contracted Sustainalytics, a Morningstar
Company, a leading provider of ESG researchand ratings for investors, financial institutions
and corporate clients, to support the development of the Framework and to support
the annual review and update of the Framework.
Sustainable Solution Department of SMBC is responsible for developing andmaintaining the Framework, including ensuring that the underlying themes andactivities align with market practice and expectation. The Framework will beannually reviewed and updated with the support from Sustainalytics. Sustainalytics
will also provide limited assurance on annual basis to ensure that SMBC allocatesthe proceeds of Green Deposit to the Eligible Green Projects appropriately incompliance with this Framework.
2. Green Eligibility Guide
SMBC defines criteria for eligible green projects (“Eligible Green Projects”) and uses
the proceeds of Green Deposit to finance new or existing Eligible Green Projects.
2.1 Eligible Green Projects
Categories

Eligible Green Projects

Renewable

Acquisition, development,Energy

construction, operation, orExclusion Criteria

maintenance of projects/assets
generating electricity from:i)Solarii) Solar thermal energy, withless than 15% fossil fuelback-upiii) Wind (on and offshore)iv) Geothermal, with the directemissions intensity of lessthan 100 gCO2/kwhv) Hydropower, which meets-

Projects which have notone of the following

undertaken an

criteria:

environmental and social--

Run-of-river without

impact assessment that

artificial reservoir orensures no significant

with low storage

controversy surrounding

capacity,

the project

Facilities that became
operational before 2019with life cycle GHG
emissions intensity of
100 gCO2e/kwh, or
power density ofgreater than 5 W/m2,or-Facilities that became
operational after 2020
with life cycle GHG
emissions intensity of
50 gCO2e/kwh, orpower density ofgreater than 10 W/m2

For refurbishment, theproject that meets theabove hydropower criteria.
If the project increases thesize of the dam orreservoir, a newenvironmental and social
impact assessment needs
to be undertakenvi) Waste biomass energy,-Plastics, rubber, tire-with feedstock limited to a)

derived fuel (TDF) to

residues from forestry andenergy, or fuel conversion

agriculture, b) residues

from waste materials

from fisheries certified with
MSC1, ASC2 or MEL3, c)waste from palm oil
operations certified withRSPO4 or RSB5, or d)wastewater and sewagesludgevii) Non-waste biomass energy-with life cycle GHG

Feedstock that:a. is produced on land with

1

Marine Stewardship Council (MSC), at: https://www.msc.org/

2

Aquaculture Stewardship Council (ASC), at: https://www.asc-aqua.org/

3

Marine Eco-Label Japan (MEL), at: https://melj.jp/eng/about_us

4

The Roundtable on Sustainable Palm Oil (RSPO), at: https://rspo.org/

5

The Roundtable on Sustainable Biomaterials (RSB), at: https://rsb.org/

emissions intensity of lesshigh biodiversity withinthan 100 gCO2e/kWh,the last 10-15 years,

using feedstock restricted

b. is produced on land withto a) wood and wooda high amount of carbonpellets certified with FSC6

has been converted for7

or PEFC , or b) non-woodfeedstock production, orcrops

c. competes with foodproduction-

Feedstock from palm oil,wood pulp or waste frompeat-

10% or more of feedstock is
non-certified oil, energy
crops, including corn, soy,sugarcane, and woodpellets without sustainablesourcing and GHG emissions
reduction commitments

EnergyEfficiencyi)

Development,-energy-efficientmanufacture, installation,technologies / processes

maintenance of orthat are inherently carbon-

upgrades to:intensive and/or primarily-End-user energy

driven / powered by fossil

efficient technologies,

fuels

products or equipmentthat are non-motorizedor powered byelectricity, or-Energy efficienttechnologies, products
or hardware systems
that are non-motorizedor powered by

6

Forest Stewardship Council (FSC), at: https://fsc.org/en7

Programme for the Endorsement of Forest Certification (PEFC), at: https://www.pefc.org/

electricityii) Installment of energyconservation equipment,including, but not limited
to, LED lighting, efficient
HVAC (heating, ventilating,and air conditioning),building insulation andenergy demand control
systems which improveenergy efficiency
Resourcei)

Development, construction-

Chemical recycling of plastic

Efficiency

and/or operation of-

E-waste or Waste from& Pollution

recycling facilities forElectrical and Electronic

Prevention

municipal and industrial

Equipment (WEEE), without

andwasterobust waste management

Control

processes to mitigate
associated risksii) Development, construction-Plastics, rubber, tire-and/or operation of mixed

derived fuels (TDF), gasresidual waste to energy

capture from operational

power plants

landfills, and landfill gas
flaringCleani)

Development,-

Fossil fuel-based

Transportat

manufacture, or purchasetransportation orionof non-fossil fuel-based

infrastructure andvehicles such as:transportation with the-Electric vehicles,

main objective of-Fuel cell vehicles, ortransporting fossil fuels-

Non-motorizedtransportii) Development,
manufacture, purchase, or
upgrades of public landtransport such as:-Buses, trucks and railswith zero directemissions, or-Individual rail thatmeets universal CO2
direct emissions
threshold of <50
gCO2e/p-km(passenger) or <25
gCO2/t-km (freight)iii) Acquisition, development,
operation, maintenance ofsupporting infrastructure
for above mentioned
transportGreenbuildingsi)Acquisition, development,-Industrial facilities

construction, or retrofit of-Facilities/buildings designed

green building thatfor the purpose ofreceives regionally,extraction, storage,

nationally or internationallytransportation orrecognized, third-party

manufacture of fossil fuelsverified green building
certifications, which are:-Leadership in Energy
and Environmental
Design (LEED): Gold orabove-

Building Research
Establishment
Environmental
Assessment
Methodology(BREEAM): Excellent orabove, or-Comprehensive
Assessment System forBuilt Environment
Efficiency (CASBEE): Aor above, or-

DBJ Green Building
Certification: 4 Stars orabove, or-

Building-Housing
Energy-efficiency
Labeling system(BELS): 4 Stars oraboveii) Refurbishment/retrofit ofbuilding to achieve a 30%
improvement in energy
efficiency and/or 30%
reduction in GHG emissions

2.2 General Exclusionary Criteria
The followings are excluded from the Eligible Green Projects:i)

fossil fuel-based assets,ii) defense and security,iii) nuclear power generation,iv) coal-fired power generation,v) all mining, andvi) tobacco sectors
3. Alignment with/contribution to SDGs
Use ofSDG

SDG target

Renewable

7. Affordable and7.2 By 2030, increase substantially the share ofEnergy

Clean Energy

renewable energy in the global energy mix

Energy7. Affordable and7.3 By 2030, increase substantially theEfficiency

Clean Energy

share of renewable energy in the global energy mix

Green

9. Industry,

9.4 By 2030, upgrade infrastructure and retrofit

Buildings

innovation andindustries to make them sustainable, with increased

infrastructure

resource-use efficiency and greater adoption of clean

Proceeds
Categoryand environmentally sound technologies andindustrial processes, with all countries taking actionin accordance with their respective capabilities
Clean

11. Sustainable

11.2 By 2030, provide access to safe, affordable,Transportation

Cities andaccessible and sustainable transport systems for all,Communities

improving road safety, notably by expanding public
transport, with special attention to the needs of thosein vulnerable situations, women, children, persons
with disabilities and older persons

Pollution

3. Ensure healthy

3.9 By 2030, substantially reduce the number ofPrevention

lives and promote

deaths and illnesses from hazardous chemicals andand Control

well-being for all atair, water and soil pollution and contamination

all ages4. Disclaimer
It does not constitute or solicit an offer or commitment by any member of SMBC
Group to underwrite or extend any credit, subscribe for or place any securities, buy
or sell any security or financial instrument or to provide any other services nor (saveto the extent explicitly contracted for outside of this Framework) is it intended as
investment or other advice or as a recommendation that you, or any other person,participate in any transaction. Prior to participating in any transaction you should(a) make your own independent judgement if such transaction is suitable for you(without reliance upon any information contained in this Framework or provided byany member of SMBC Group or any other advisers); (b) consult your own
independent, competent, legal, financial, accounting, regulatory and/or otherprofessional advisers; (c) take full responsibility for the economic risks and merits
as well as the legal, financial, corporate, tax, and accounting characteristics andconsequences of the proposed transaction. This Framework is not intended to form
the basis of any investment decision. There may be, among others, tax, corporate,financial accounting, legal or regulatory consequences to the proposed transaction
and no member of SMBC Group nor any of their advisers express any opinion onthese matters; you should consult with experienced advisers on tax, accounting,legal financial and regulatory matters.
SMBC makes no representation or warranty as to, and does not take any
responsibility for, the accuracy or completeness of the information contained oropinion expressed herein. The information contained in this Framework may beamended from time to time without prior notice.
This Framework should not be quoted, copied, forwarded or distributed to any otherparty by using electronic or mechanical methods without our consent.