Japanese automotive manufacturer Toyota Motor plans to sell $4.7 billion in yen (Japanese currency) and foreign currency sustainability bonds, in what would be one of the biggest offerings globally in the booming market to fund environmental and social projects.
ESG stands for Environmental, Social and Governance. Investors are increasingly applying these non-financial factors as part of their analysis process to identify material risks and growth opportunities.
The company said in a statement that the proceeds from the sale of what Toyota is calling “Woven Planet Bonds” will be used for projects such as the development of zero emission and assisted mobility vehicles, and increased use of renewable energy.
Issuance of ESG bonds have soared in Japan in line with the global jump in demand for the debt, with deals climbing 14 percent so far this year, a record for the period, according to data.
A $4.7 billion equivalent sale by Toyota would be among the biggest sustainable bond offerings by any company worldwide, the data show.
Meanwhile Japanese Prime Minister Yoshihide Suga has pledged to decarbonize Japan by 2050 and ban the sale of new gasoline-only vehicles by the mid-2030s. A focus on reducing carbon emissions has swelled among companies in the nation following Mr. Suga’s October pledge.
The funds that Toyota raises will also be used for its Woven City project which is a 175-acre high-tech, sensor-laden metropolis at the base of Mount Fuji in Japan. The city would function as a laboratory to test Toyota’s latest smart technologies, including autonomous vehicles, smart homes and personal mobility.
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