Asahi Kasei to issue a green bond

May 11, 2020
Asahi Kasei Corp.

Asahi Kasei is scheduled to issue an unsecured straight bond as a “green bond” through a public offering in the domestic Japanese market.

The Asahi Kasei Group operates business in harmony with the environment and local communities based on a Group Vision of providing new value to society by enabling “living in health and comfort” and “harmony with the natural environment.” Sustainability is positioned as a core element of management under the strategic medium-term initiative Cs+ for Tomorrow 2021, and we are accelerating measures for sustainability under the concept of “Care for Earth.”

One such measure is to renovate and increase the capacity of our hydroelectric power plants which supply electricity to our manufacturing plants in the Nobeoka area of Miyazaki Prefecture, Japan, enabling our continued utilization of renewable energy over the long term. As renewable energy is beneficial to the global environment, we decided to raise funds for this project by issuing a green bond as a clear expression of Asahi Kasei’s posture toward the global environment.

Outline of the green bond

Issuer Asahi Kasei Corp.
Maturity 5 years (scheduled)
Issue amount ¥10.0 billion
Issuance June 2020 or later (scheduled)
Use of proceeds Renovation of 2 hydroelectric plants
Lead bookrunners Nomura Securities Co., Ltd., Daiwa Securities Co. Ltd., Mizuho Securities Co., Ltd., SMBC Nikko Securities Inc.
Green bond structuring agent1 Nomura Securities Co., Ltd.
  1. 1 A green bond structuring agent supports the issuance of a green bond by giving advice regarding the formulation of a green bond framework and on obtaining a second-party opinion.

Green bond framework and obtaining second-party opinion

For the issuance of our green bond, we formulated an Asahi Kasei Green Bond Framework which specifies our policy with respect to the 4 core components of the Green Bond Principles of the International Capital Market Association (ICMA): 1. Use of Proceeds, 2. Process of Project Evaluation and Selection, 3. Management of Proceeds, and 4. Reporting. For conformity assessment, we obtained a second-party opinion2 by Sustainalytics, an independent organization, indicating that our green bond conforms with the Green Bond Principles 2018 of ICMA and with the Green Bond Guidelines 2020 of Japan’s Ministry of the Environment. The cost of obtaining independent assessment was subsidized by Ministry of the Environment.

  1. 2 Second party opinion by Sustainalytics:
    https://www.sustainalytics.com/sustainable-finance/wp-content/uploads/2020/05/Asahi-Kasei-Corp.-Green-Bond-Second-Party-Opinion.pdf

Use of proceeds

The funds raised by issuing the green bond will be used to renovate two of Asahi Kasei’s hydroelectric power plants located in Kyushu, the Gokasegawa Plant and Mamihara Plant. Our business operations in the Nobeoka area are supplied with electric power from our own hydroelectric plants which were built around a century ago. Renovation of the aging hydroelectric power plants will improve earthquake resistance and raise efficiency, enabling the ongoing use of renewable energy for decades or even a century to come. By continuing to proactively utilize clean energy sources, Asahi Kasei will conduct environmentally friendly business operations that contribute to the sustainability of society.