LY Corporation Achieves Sustainability Linked Loan Target Ahead of Schedule　Donates Approx. JPY20 Million (Equivalent to Interest Rate Reduction) to Environmental Organizations

LY Corporation (the “Company”) has achieved ahead of schedule the sustainability performance targets (SPTs) set under its JPY20 billion syndicated sustainability linked loan (“SLL”)*1 executed in January 2023. The Company will donate approximately JPY20 million, the amount equivalent to the interest rate reduction applied in line with an early achievement, to environmental organizations and other related groups.

*1 Press release: Z Holdings Signs Sustainability Linked Loan Aimed at Early Achievement of Renewable Energy Target (January 2023)

SLL is a funding method which sets SPTs linked with the borrower's ESG strategies. By linking interest rates and other borrowing terms as incentives to achieve the SPTs, SLL aims to promote and support environmentally and socially sustainable economic activities and economic growth.

The Company announced its "2030 Carbon Neutrality Declaration," a commitment to reduce greenhouse gas emissions from the business activities of the entire LY Corporation Group to net-zero by FY2030. To achieve the declaration's target, first, more than 80% of the electricity used by the LY Corporation Group will be generated from renewable energy sources by around FY2025, and then the remaining electricity used will be converted to 100% renewable energy sources over the following five years.
Accordingly, the Company had set the SPT of this SLL as "Use of renewable energy sources in at least 80% of LY Corporation Group's electricity use." Specifically, the SLL’s structure was set so that the interest rate will be increased if the actual results in FY2025 do not meet the SPT, and lowered if the actual results in FY2024 meet the SPT early. As a result of proactive environmental investments aimed at increasing the use of renewable energy, the Company has achieved its SPT in FY2024, thereby qualifying for a reduction in interest rates.
The Group’s renewable energy usage rate for FY2024 stands at 89.5%,*² a figure that has been independently verified by the Japan Quality Assurance Organization (JQA).

This SLL incorporates a structure in which either the Company as the borrower, or the participating financial institutions will contribute an amount equivalent to any interest rate adjustment to environmental organizations and similar entities, depending on how the interest rate changes. As the interest rate reduction applies in this case, the Company will donate approximately JPY20 million, the equivalent of the reduction, in stages starting from March 2026, with the aim of supporting broader efforts to reduce environmental impact across society. Details regarding the donation recipients are currently under consideration and will be announced on the Company’s website once finalized.

*2 ESG Data (Data under: Ratio of electricity consumption from renewable sources to the total electricity consumption): https://www.lycorp.co.jp/en/sustainability/esg/data/#anc1

The SLL has obtained third-party opinions from Rating and Investment Information, Inc. (R&I) for the loan's compliance with the Sustainability Linked Loan Principles published by the Loan Market Association, etc., and the Green Loan and Sustainability Linked Loan Guidelines published by Japan's Ministry of the Environment. R&I's opinions also cover the rationality of the SPT set in the SLL.

The Company’s mission is to “Create an amazing life platform that brings WOW! to our users.” Guided by this mission, the Company actively promotes climate action initiatives, including the introduction of renewable energy through virtual PPA.*3    The Company was also selected for the CDP Climate Change A List in the last fiscal year.*4 The Company will continue to contribute to the realization of a sustainable society through ongoing engagement with environmental issues.

*3 Press release: LY Corporation Signs Its First PPA (January 2025)
*4 Press release: LY Corporation Selected to CDP Climate Change A List for the First Time, Securing a Top Rating (February 2025)

Outline of SLL

Syndicated amount: JPY20 billion
Lenders: Mizuho Bank, Sumitomo Mitsui Banking Corporation, MUFG Bank, Sumitomo Mitsui Trust Bank, Crédit Agricole Corporate and Investment Bank
Application: Business funds
Date of agreement: January 26, 2023
Execution date: January 31, 2023
Period: Five years

Reference:
LY Corporation’s sustainability initiatives
https://www.lycorp.co.jp/en/sustainability

Disclaimer
This is an English translation of the original release in Japanese. This translation has been prepared and provided for the sole purpose of the reader’s convenience. All readers are recommended to refer to the original version of the release for complete information.