MOL to issue world’s first blue bonds in shipping

Japanese shipping major Mitsui O.S.K. Lines (MOL) has decided to issue blue bonds through a public offering in Japan’s domestic market in January 2024.

The bonds are said to be the world’s first blue bonds in the shipping industry.

The blue bonds amounting to JPY 10 billion (about $70.45 million) will have a maturity of five years, according to the company.

Blue bonds are pioneering financial instruments that aim to support sustainable marine and fisheries projects. They follow guidance provided by the International Capital Markets Association (ICMA) and other organizations.

As explained by MOL, the Blue Bond Framework developed for the issuance of the bonds will ensure that all uses of the bonds’ proceeds will contribute to a sustainable blue economy, and the bonds received the highest rating of “Blue1(F)” from the Japan Credit Rating Agency (JCR) based on its expectation that they will have a positive environmental impact.

A blue bond is a type of green bond issued to finance green projects that aim to solve environmental problems and is issued with the use of proceeds limited to projects related to the prevention of marine pollution, sustainable marine resources, and so on.

MOL has positioned its environmental strategy as a key element of its group management plan “BLUE ACTION 2035,” established this year, and set marine and global environmental conservation as one of its sustainability issues. The plan is aligned with the “MOL Group Environmental Vision 2.2,” the company’s environmental strategy regarding the introduction of zero-emissions ocean-going vessels and the milestones toward achieving GHG emissions intensity reduction targets.

The shipping company set a total of 650 billion yen (about $4.5 billion) to be invested in resolving environmental issues over the three-year period from FY2023 to FY2025. It will raise funds through blue bonds to finance these initiatives.

The company revealed that Wind Hunter, the ultimate zero-emission ship, and Wind Challenger, a wind-powered cargo ship, are examples of potential uses of the bonds’ proceeds.

MOL currently comprises a fleet of about 800 vessels.