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Amazon raises $1 billion sustainable bond for climate, social causes

05/10/2021 18:00
Amazon raises $1 billion sustainable bond for climate, social causes

Money to be spent on existing commitments, new projects

Will cover renewable energy, clean transport

To fund buying electric vehicles

By Kate Duguid and Simon Jessop

- Amazon.com Inc AMZN.O issued its first sustainability bond on Monday, raising $1 billion to invest in renewable energy, clean transport, greener buildings and affordable housing.

The world's biggest company joins a growing list of debt issuers tapping the market for green and sustainable bonds, which is swelling as asset managers come under pressure from their investors to advance environmental, social and governance (ESG) causes.

Global green bond issuance reached a record high of $270 billion at the end of 2020 and could reach $450 billion this year, according to Climate Bonds Initiative. nL1N2JX15Q nL4N2M61YD

The money raised through the sustainability bond is a fraction of the total debt Amazon issued on Monday - some $18.5 billion. The company said it forms part of a new Sustainable Bond Framework and will be spent on new and existing projects.

The projects include the acquisition of electric vehicles for transportation fleets, as well as e-bikes and other electric-powered alternative delivery vehicles, Amazon said. The framework also cited sustainable building projects, like using an all-electric heating and cooling system run on renewable energy in the company's new Arlington, Virginia, headquarters.

Amazon also said that it may use these funds for private equity investments in clean transportation and zero carbon buildings.

Amazon has pledged to reach net zero carbon emissions by 2040 and to power all its operations with renewable energy by 2030, as well as increase opportunities for under-represented groups in its workforce.

The decision to raise money to fund social projects comes Amazon fends off criticism for its treatment of its workers as its business boomed during the COVID-19 pandemic. nL1N2MM30A

As well as being castigated for poor health and safety practices during the early months of the pandemic, Amazon has also been criticised for illegally firing workers and pressuring staff not to form a union at one of its sites. nL4N2LY1UAnL1N2MU1ZS

Amazon has denied these allegations and has said it supports employees' rights to criticize work conditions.

Global green bond issuance hit new record high last yearnL1N2JX15Q

GRAPHIC-Sustainable-bond issuance reaches record high in first quarternL4N2M61YD

(Reporting by Kate Duguid in New York and Simon Jessop in London; Editing by Lisa Shumaker)

(([email protected]; +646-223-6118; Reuters Messaging: [email protected]@thomsonreuters.net))