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Japan on Alert for Greenwashing as It Lends $40 Billion for ESG

  • DBJ plans 5.5 trillion yen in ESG lending and investment
  • Lender sees risk that some loan plans will have ‘sketchy’ aims
Sustainability-linked and transition-linked loans are growing in popularity in Japan, where carbon-intensive manufacturing is an integral part of the economy.

Sustainability-linked and transition-linked loans are growing in popularity in Japan, where carbon-intensive manufacturing is an integral part of the economy.

Photographer: Kiyoshi Ota/Bloomberg

A Japanese government-backed bank is set to spend about $40 billion for sustainable purposes, and it will scrutinize the use of funds to ensure companies aren’t greenwashing.

The Development Bank Of Japan, which has supported companies with funding during the pandemic, is gearing up to boost sustainable financing. It earmarked about 40% of its total lending and investment, or 5.5 trillion yen ($40.7 billion), for environmental, social and governance purposes over the five years started April 2021.