US-based eCommerce giant Amazon has issued its first sustainability bond, raising $1 billion to invest in renewable energy, clean transportation, green buildings, and affordable housing.
The world’s biggest company has joined a rising list of debt issuers looking to tap the market for green and sustainable bonds, which is growing as asset managers face increasing pressure from their investors to advance environmental, social and governance (ESG) causes.
According to the Climate Bonds Initiative, global green bond issuance hit a record high of $270 billion at the end of 2020 and could cross $450 billion this year.
The money raised by the sustainability bond is a small portion of the $18.5 billion in debt Amazon issued on the last day. The company said that it is part of a new Sustainable Bond Framework which will be used for new and existing projects.
Amazon stated that the projects include buying electric cars for transportation fleets, as well as e-bikes and other electric-powered alternative delivery vehicles. Sustainable building projects were also listed in the framework, such as the company’s new Arlington, Virginia headquarters, which uses an all-electric heating and cooling system powered by renewable energy.
The eCommerce behemoth said that the funds could be used to make private equity investments in clean transportation and zero-carbon buildings.
Amazon has committed to achieving net-zero carbon emissions by 2040 and powering all of its operations with renewable energy by 2030, as well as expanding opportunities for under-represented groups in its workforce.
The decision to raise funds for social projects is based on a number of factors. Even though Amazon’s business grew during the COVID-19 pandemic, it faced criticism for how it treated its employees.
Amazon has been criticized for unlawfully firing workers and pressuring employees not to form a union at one of its sites, in addition to being castigated for inadequate health and safety procedures during the early months of the pandemic.
The company has denied the claims and stated that it supports workers’ right to express their dissatisfaction with their working conditions.