Figure 4-1-13 State of Financing by Field with Strengthened Growth Base

Figure 4-1-14 Conceptual Diagram of Business-Matching

hand, takes the view that the reduction of environmental pollution risk do contribute to the company's management stability, and preferential loans are made on this basis. Regional financial institutions such as local banks are thought to seek regional development together with local businesses. Under the system of environmental rating finance, on the other hand, the customer, the financial institution, and the whole society that these actors exist should all become stakeholders, thereby raising the level of efforts made by companies contributing to sustainable development.

In order to promote financing employing environmental rating, since 2007, the Ministry of the Environment has been subsidizing for the financial institutions conducting environmental ratings if their loan customers pledge to reduce their carbon dioxide emissions. This contributed to the increase of environmental rating financing; and as of April 2011 there were 47 financial institutions employing environmental rating financing, a significant increase from 33 in the previous year.

The Bank of Japan also began a measure, “Fund-Provisioning Measure to Support Strengthening the Foundations for Economic Growth” in June 2010, with the objective of expanding the mid- and long-term path to growth in order to overcome deflation. This is a measure to provide low-interest funds to the financial institutions that have submitted policies for efforts in the 18 fields set forth in the New Growth Strategy, based on their track record of financing. The total amount of investments and loans from April through December 2010 shows that the amount of financing for environmental and energy fields was the highest, at 671.9 billion yen, amounting to nearly 30% of the total, reflecting substantial expectations of growth in this field (Figure 4-1-13). It is hoped that financial institutions will find new prospective projects, play the role of a “good judge” with their accumulated experience and provide funds for new technological development and new businesses, especially which may involve risks, in environmental and energy fields, thereby supporting development of businesses to be taken on by the next generation.

Banks and credit associations are also strengthening their roles of not only financing but also of information offering, through business-matching. When financial institutions build relationships with their client companies, there would be many opportunities for them to share not only financial issues but overall business-related issues. In such cases, they are often asked to provide advice. It is in those cases that they conduct business-matching that introduce partners for tasks such as sales and purchases, technological development, and consulting about taxes and operations (Figure 4-1-14). Such business-matching includes business negotiations in one-to-one meetings, or depending on the circumstances, collaborative match-making in exhibitions and exchanges conducted by multiple financial institutions. These companies would exchange information aimed at future transactions. Efforts are being made to increase the ratio of contracts signed and to improve the effects of matching, by narrowing the theme of such exchanges down, for example, to the environment. The Ministry of the Environment launched a campaign called “Challenge 25 Caravan across Japan,” and in May and June of 2010 they held eco-business-matching events at 7 venues throughout the country with the cooperation of regional financial institutions.

For the future development of environmental finance, the previously mentioned report released by the Expert Committee on Environment and Finance included a proposal to develop a Japanese version of “Principles for Sustainable Finance Action” (tentative name) by a voluntary group of financial institutions. In August 2010, responding to a call made by Mr. Takejiro Sueyoshi (Special Advisor to the United Nations Environment Programme Finance Initiative) to create the Japanese version, a drafting committee was set up by voluntary financial institutions. During 2010 a number of discussions were held about the preamble and general introductory sections that would stipulate the concept of the action principles and the fundamental principles that