NYK Floats Out Industry’s 1st Green Bonds

Japan’s Nippon Yusen Kaisha (NYK) has unveiled its plans to offer Green Bonds within the domestic market in May, thus becoming the world’s first shipping company to issue labeled Green Bonds in the shipping sector.

The move is in line with NYK’s medium-term management plan “Staying Ahead 2022 with Digitalization and Green,” under which the company plans to integrate environmental, social, and governance (ESG) principles into management strategies.

The proceeds of a green bond are used solely for the purpose of funding environment-friendly projects.

The amount to be issued is JPY 10 billion (USD 93.5 million), with bonds having a maturity of 5 years.

NYK said it would use the bonds’ net proceeds to pursue investments in technologies such as LNG-fueled ships, LNG-bunkering vessels, ballast water treatment equipment, and SOx (sulfur oxides) scrubber systems.

NYK’s Green Bonds have been approved as “a model case for the Green Bonds issuance in the fiscal year 2018” by Japan’s Ministry of the Environment. The shipping company is now under verification process by the ministry and its contractors, pending confirmation.

“NYK will participate in a shipping industry working group to be established by the Climate Bonds Initiative and will cooperate in formulating evaluation criteria for Green Bonds issued by shipping companies,” the company said in a comment.

The Climate Bonds Initiative is an international, investor-focused not-for-profit working to mobilize bond markets for climate change solutions. It also provides a journal of record for relevant bond issuance, develops Green Bond evaluation criteria such as the Climate Bonds Standard, and provides policy proposals to government, finance, and industry sectors.