Green transition bonds surge in Japan, with $2bn issued this year

Idemitsu Kosan, JFE Holdings nab funding as investors embrace decarbonization

Nippon Yusen is using the money raised through transition bonds for ships powered by natural gas and other changes that will reduce the company's carbon emissions. (Photo courtesy of Nippon Yusen)

HIROKO MATSUMOTO, Nikkei staff writer

August 13, 2022 15:00 JST

TOKYO -- Japanese companies have issued 285 billion yen ($2.12 billion) worth of transition bonds this year through July -- 14 times more than in all of 2021 -- as they tap a growing interest among investors in environmental, social and governance factors.

Transition bonds are issued by steelmakers, oil companies and other businesses that cannot achieve net-zero emissions quickly, helping them fund efforts to reduce their carbon footprints. Issuers must present specific emissions targets and decarbonization strategies to buyers.