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Amazon issues its first sustainability bond at $1 billion

The e-commerce giant joins a growing band of corporates and governments around the world that have turned to the sustainable debt market. Read More

Amazon has issued its first sustainability bond, becoming the latest major corporate to tap the green debt market to raise funds to support its transition to more environmentally responsible business practices.

The online retail giant announced last week it is seeking $1 billion to finance a range of ongoing and new sustainability projects, including renewable energy, clean transportation, green buildings and affordable housing developments.

The company said the issuance is part of a new “sustainability bond framework,” which sets out how debt issuance can help the firm meet its in-house sustainability commitments while stimulating investment in technologies, products and services that will have a “ripple effect” that helps enable decarbonization across the wider economy.

Amazon is aiming to achieve net-zero emissions by 2040 through a strategy that will see it transition all its operations to renewables by 2025, purchasing 100,000 electric delivery vehicles from Rivian, and investing in nature-based solutions.

The sustainability bond is a just a small portion of the $18.5 billion of debt issued by Amazon last week in a bumper issuance that represents the retail behemoth’s biggest bond sale to date.

The announcement comes as experts predict the sustainable debt market is set to hit record highs this year as companies and governments look for ways to fund green and social projects that allow them to recover from the pandemic and meet internal sustainability goals. An analysis published earlier this month by the Climate Bonds Initiative predicted the green, social and sustainability bonds market will hit $1 trillion for the first time this year building on record levels of sustainable debt issuance in 2020.

Google owner Alphabet, Tesco, hospitality company Whitbread, H&M and PepsiCo are just some of the other major brands that have issued green, social or sustainability bonds in recent months, and the United Kingdom is gearing up to launch its maiden green sovereign bond this summer.

In a blog post announcing its plans, Amazon said its sustainability bond issuance would help advance technologies that decarbonize and protect the natural environment. “At Amazon, we are committed to using our scale for good,” it stated. “Amazon continues to stimulate investment in the development of green technologies and low carbon products and services that will enable companies of all sizes to decarbonize their operations.”

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