In Mizuho Corporate Bank, Ltd., a Sustainable Development Department created in its Global Structured Finance Division has responsibility for overall implementation and management of the Equator Principles. The Sustainable Development Department globally applies Mizuho's Equator Principles Implementation Manual to its project finance and financial advisory activities, handled in Tokyo and branch offices in New York, London, Sydney, Singapore and Hong Kong.
The Equator Principles Implementation Manual is comprised of "the Implementation Manual," "Screening Form," "Environmental Checklists by Industry," the IFC Performance Standards, and the World Bank/IFC Environmental Guidelines by Industry.
The "Screening Form" is used by project finance officers in gaining a basic understanding of environmental and social considerations specific to the project. Project categorization is made by the Sustainable Development Department based on the screening result. According to size, location and the extent of its impact on the environment and society, the Sustainable Development Department categorizes each project as A, B or C. An Environmental Screening Report, prepared at this stage, is submitted to a credit department.
For projects classified Category A or B, in other words those projects having significant potential impact on the environment, the Sustainable Development Department conducts a thorough environmental review based on the "Environmental Checklists by Sector." "Environmental Checklists by Sector" address all Equator Principle requirements and list environmental and social issues by Sector, making it possible to understand the impact of those requirements on a project. The Environmental Review Report prepared at this stage is submitted to a credit department as the Environmental Screening Report. In some instances, the Environmental Review Reports will be prepared by an independent consultancy, coming after its site visit(s) (This report is disclosed under requirements of the Equator Principles No. 10).(*2, *3)
Mizuho's Environmental Checklist by Sector are based on IFC EHS Guideline and Performance Standards. In response to the revision of IFC EHS Guidelines, Mizuho is also revising its Environmental Checklists by Sector. The IFC has 62 sector guidelines in addition to General EHS Guidelines which gives guidance on common EHS issues potentially applicable to all industry sectors.
Mizuho will have checklists for 35 sectors in which it usually undertake and expects business. These include Oil and Gas Development and Thermal Power. In addition, sectors unique to Mizuho such as Nuclear Power and Bio-ethanol not covered by the IFC Guidelines will be developed.
Mizuho discloses a part of Environmental Checklist for Offshore Oil and Gas Development as a reference for stakeholders.
(*1) Implementation flow of "Equator Principles Implementation Manual"
(*2) Projects screened based on the Equator Principles (FY2008)
| Category Description Sector | Sub-total by Category | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Oil/ Gas/ LNG |
Mining | Power | Petro chemical |
Infra- structure |
Others | ||||
| A | Projects with potential significant adverse social or environmental impacts that are diverse, irreversible or unprecedented | FY2008 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| FY2007 | 2 | 1 | 0 | 0 | 0 | 0 | 3 | ||
| FY2006 | 0 | 1 | 0 | 0 | 0 | 0 | 1 | ||
| B | Projects with potential limited adverse social or environmental impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures | FY2008 | 2 | 0 | 2 | 1 | 13 | 1 | 19 |
| FY2007 | 4 | 0 | 17 | 4 | 18 | 7 | 50 | ||
| FY2006 | 5 | 0 | 16 | 5 | 8 | 3 | 37 | ||
| C | Projects with minimal or no social or environmental impacts | FY2008 | 0 | 0 | 0 | 0 | 1 | 0 | 1 |
| FY2007 | 0 | 0 | 0 | 0 | 1 | 0 | 1 | ||
| FY2006 | 0 | 0 | 0 | 0 | 1 | 0 | 1 | ||
| Sub-total by Sector | FY2008 | 2 | 1 | 2 | 1 | 14 | 1 | 21 | |
| FY2007 | 6 | 1 | 17 | 4 | 19 | 7 | 54 | ||
| FY2006 | 5 | 1 | 16 | 5 | 9 | 3 | 39 | ||
(*3) Projects screened based on the Equator Principles by Area
When Mizuho acts as a lead arranger in syndication, the Sustainable Development Department's review of the environment is included in the information memorandum and technical report providing project information to potential lenders. The Sustainable Development Department actively takes part in documentation by commenting on environmental covenants.
The Sustainable Development Department supports our financial advisory clients by early identification of problematic issues likely to surface under environmental review by the EPFIs and/or JBIC's environmental assessment.
The chart below shows Equator Principles applications at each process stage of project finance.
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