025 gloria blue nega

Management of Environmental and Social Initiatives

greenbond

Green Bond

Green Bond

Komatsu issued a “green bond”, an unsecured straight bond, through a public offering on the Japanese market. Green bonds are designed to raise funds for exclusive use in business which works to help solve environmental problems.

Under the three-year mid-term management plan, “DANTOTSU Value - FORWARD Together for Sustainable Growth” to be completed in the fiscal year ending March 31, 2022, Komatsu is making efforts for sustainable growth through a positive cycle of improving earnings and solving ESG issues. In this management plan, Komatsu upholds ESG management targets of reducing CO2 emissions to 50% and increasing the ratio of using renewable energy to 50% of total energy use, both by 2030 from 2010. To this end, Komatsu supplies high-quality, high-performance products, services, and solutions, that are designed to reduce environmental impacts, particularly in relation to climate change, and enhance safety. With the proceeds from the green bond, Komatsu is going to further accelerate its efforts to help realize a decarbonized society.

【Reference】Press Release(released on July 10th)(Komatsu website)

Outline of the Green Bond

Issuer Komatsu Ltd.
Pricing date July 10, 2020
Issue date July 16, 2020
Maturity 5 years
Issue amount JPY10.0 billion
Interest rate 0.130%
Use of proceeds Applicable to the following projects:

Project A: Responses to environmental problems resulting from the use of products
Efforts designed to help reduce CO2 emissions from products in use to 50% by 2030 from 2010 (Specifically, R&D, the provision and wide use of products, services and solutions).
1) Products: hybrid hydraulic excavators, (applicable for low carbon-type construction equipment certification by Japan's Ministry of Land, Infrastructure, Transport and Tourism) and electric construction equipment.
2) Service: Support for fuel-economy machine operation by using IoT.
3) Solutions: Reduction of CO2 emissions by promoting wide use of ICT-intensive construction equipment and providing applications which support optimization of construction as a whole.

Project B: Responses to environmental problems resulting from manufacturing.
Efforts designed to help reduce CO2 emissions in manufacturing to 50% and increase the ratio of using renewal energy to 50% of total energy use, both by 2030 from 2010 (capital investment in facilities and equipment, etc.).
(1) Energy-savings of factories and equipment in plants.
(2) Power generation by using solar panels and biomass as well as purchase of renewable energies.
Lead manager Nomura Securities Co.,Ltd.
Green bond structuring agent* Nomura Securities Co.,Ltd.
Rating "AA-" from Rating and Investment Information, Inc.

*This organization supports the issuance of green bonds by giving advice regarding the formulation of green bond frameworks and on obtaining second-party opinions.

Second-party Opinion of Green Bond Eligibility

With respect to eligibility against the 2018 Green Bond Principles and the Green Bond Guidelines, 2020, Komatsu has obtained a second-party opinion from DNV GL BUSINESS ASSURANCE JAPAN K.K. (hereafter “DNV GL”), an internationally recognized third-party organization with expertise in this field.

The cost of obtaining an independent assessment related to the green bond is subsidized by Japan’s Ministry of the Environment in its 2020 assistance project to promote the issuance of green bonds.

List of Investors Who Expressed Their Intention to Invest

  • Asset Management One Co., Ltd.
  • OMUTA YANAGAWA SHINKIN BANK
  • The Kita Osaka Shinkin Bank
  • The 77 Bank, Ltd.
  • THE JUROKU BANK,LTD
  • SUMITOMO LIFE INSURANCE COMPANY
  • Zentouei Shinyokumiai
  • Daitokyo Shinkumi Credit Cooperative
  • NAGANO SHINKIN BANK
  • The Bank of Nagoya, Ltd.
  • Nippon Life Insurance Company
  • THE HIGASHI‐NIPPON BANK,LIMITED
  • Hiratsuka SHINKIN BANK
  • Fukushima Shinkin Bank
  • Sumitomo Mitsui Trust Asset Management Co., Ltd.

Reporting

The allocation status of the procurement funds for FY2020 and impact reporting are planned to be released in 2021.

komatsu csr, env, corporate communication, 情報戦略本部, production division, Procurement Division, Development Division, Construction Equipment Marketing Division, ライフサイクル事業部