Tokyo Tech will begin issuing 40-year sustainability bonds totaling JPY 30 billion from fiscal year 2022 onwards.
The proceeds from the bonds will be used to realize the , which aims to construct a unique campus innovation ecosystem where Tokyo Tech knowledge, talent, and funding circulate effectively across the Institute’s three campuses, and are connected to an organic and evolving network of industry-academia-government collaboration both on and off campus.
Through the realization of XCIE2031, the Institute aims to create new value and industries — two goals that have been at the heart of Tokyo Tech since its founding — and, as a result, lead the way towards a better future with new knowledge and innovation.
In conjunction with the bond issuance, the Institute has formulated the Sustainability Bond Framework, which evaluates the “green” nature of the Institute’s educational and research activities with green eligibility criteria. Tokyo Tech’s Sustainability Bond Framework has undergone a third-party evaluation by Rating and Investment Information, Inc. (R&I), which states that the framework complies with Green Bond Principles 2021, Social Bond Principles 2021, Sustainability Bond Guidelines 2021, and other principles and guidelines published by the International Capital Market Association (ICMA).
Investing in the future
Tokyo Tech, Japan’s leading science and technology university, has a long history which began with the founding of Tokyo Vocational School, the Institute’s predecessor, in 1881. Tokyo Tech was selected as a designated national university (DNU) by the Japanese government in March 2018. With the long-term goal of becoming a world-leading science and technology university, the Institute views the next decade leading up to its 150th anniversary in 2031 as a great leap forward. During the next 10 years, the Institute will take on the challenge of redefining science and technology while fostering highly skilled global talent, executing the Tokyo Tech virtuous cycle through major reforms in university management and campus systems, and contributing to a better future society.
In addition to its plans to issue sustainability bonds, Tokyo Tech has initiated the , which includes a 75-year land lease agreement with business operators who will develop the land made available on Tamachi Campus and manage operations during the lease period. The land lease, which is expected to commence in fiscal year 2026, will generate JPY 4.5 billion of revenue per year.
This revenue will be utilized to finance Tokyo Tech’s ultra-long-term investment strategy. Of the roughly JPY 230 billion that will be generated over the 75-year period (JPY 3 billion per year after taxes), approximately JPY 80 billion will be invested in “talent,” JPY 100 billion will be invested in “the environment,” and JPY 50 billion will be invested in “the future” through the establishment of various funds.
Tokyo Tech’s Sustainability Bond Framework
Tokyo Tech’s Sustainability Bond Framework will help the Institute to realize XCIE2031 by making proceeds from sustainability bonds available for projects that redevelop Tokyo Tech campuses, create an advanced educational and research environment, and ultimately form a diverse ecosystem that serves as a base for talent from around the world, while also contributing to carbon neutrality.
Based on its philosophy of creating new industries, Tokyo Tech aims to provide solutions to societal issues through innovation. The Institute has positioned integrated energy science as one of its priority fields in its DNU scheme, and will contribute to the achievement of carbon neutrality through the establishment of the at the Institute of Innovative Research, the launch of the , and other efforts. A distinctive feature of Tokyo Tech’s Sustainability Bond Framework is that it evaluates the “green” nature of the Institute’s decarbonization-related educational and research activities with green eligibility criteria. This characteristic is not often associated with conventional sustainability bonds or green bonds.2 reduction, etc., and commercialization-focused research and development funds, etc. are highly evaluated.”>*
A third-party evaluation of Tokyo Tech’s Sustainability Bond Framework has been conducted by R&I. R&I’s second opinion states that the framework complies with Green Bond Principles 2021, Social Bond Principles 2021, Sustainability Bond Guidelines 2021, and other principles and guidelines published by ICMA.
Use of proceeds
Proceeds will be used for projects that meet the following eligibility criteria:
Green bond eligibility criteria
- Activities falling under Article 8, Item (iv) of the Cabinet Order for Partial Revision of the Order for Enforcement of the ³Ô¹ÏÍøÕ¾ University Corporation Act of 2020, and activities considered as part of the Tokyo Tech Cross-Campus Innovation Ecosystem 2031 Initiative that will serve as the basis for solving environmental issues through education and research
(“Green” nature of Tokyo Tech’s education and research activities)
- Activities falling under Article 8, Item (iv) of the Cabinet Order for Partial Revision of the Order for Enforcement of the ³Ô¹ÏÍøÕ¾ University Corporation Act of 2020, and real estate that has achieved or will achieve a top-3 certification according to the Comprehensive Assessment System for Built Environment Efficiency (CASBEE), etc.
Social bond eligibility criteria
Activities falling under Article 8, Item (iv) of the Cabinet Order for Partial Revision of the Order for Enforcement of the ³Ô¹ÏÍøÕ¾ University Corporation Act of 2020, and activities considered as part of Tokyo Tech Cross-Campus Innovation Ecosystem 2031 Initiative that will serve as the basis for solving societal issues through education and research
(“Social” nature of Tokyo Tech’s education and research activities)
Eligible project
Tokyo Tech Cross-Campus Innovation Ecosystem 2031 Initiative
Examples of specific efforts
- 1.
- Redevelopment of Suzukakedai Campus into a global hub of research
- 2.
- Digital transformation, implementation of resilient education and research infrastructure on campuses
- 3.
- Establishment and upkeep of facilities that enable cutting-edge large-scale research and industry-academia-government collaboration
Process for project evaluation and selection
Projects that potentially fall under the Sustainability Bond Framework are selected by the Strategic Management Council, the body that oversees the Institute’s operational strategy under the leadership of the president. After confirmation of compliance with green and social bond eligibility criteria, projects are voted on by the Board of Directors.
Management of proceeds
Tokyo Tech’s financial accounting system will be used to manage deposits and withdrawals. An auditing firm will audit the Institute’s financial statements each fiscal year. Unappropriated funds will be managed or invested in cash or cash equivalents.
Reporting
Information on allocation of the proceeds will be disclosed annually until the full amount has been allocated to a qualified project. The environmental and societal benefits of the project will also be disclosed annually until the sustainability bonds are redeemed.
Sustainability Bond Framework and ICMA principles
A sustainability bond is a form of financing for both green and social projects. A sustainability bond framework is a document in which the issuer explains that the financing complies with the Green Bond Principles 2021 and Social Bond Principles 2021 published by ICMA. The four core components for alignment with these principles are 1. use of proceeds, 2. process for project evaluation and selection, 3. management of proceeds, and 4. reporting. External evaluations of the framework’s content for conformity with various principles, etc. is recommended.
* In case of conventional sustainability bonds and green bonds, green-eligible projects (projects that have positive environmental effects) such as the construction of green buildings, renewable energy projects, equipment and operating funds that have direct environmental impact through CO2 reduction, etc., and commercialization-focused research and development funds, etc. are highly evaluated.
