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)
| 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.
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.
Komatsu reports on the allocation and environmental and social impacts of the proceeds on an annual basis.
In addition, the external review is attached.