TOKYO – Japan’s Nippon Telegraph and Telephone will issue a new “green bond” to help it meet its greenhouse gas reduction targets and increase investments in renewable energy production, Nikkei has learned.
The telecommunications company will issue around 300 billion yen ($ 2.7 billion) in green bonds, which would be the largest such debt issue in Japan by an operating company. Green bonds limit the use of funds raised for environmentally friendly purposes.
NTT recently announced that it would reduce its greenhouse gas emissions to virtually zero by 2040 and said it would invest more in renewable energy power plants.
As a growing number of institutional investors focus on ESG (environment, society and corporate governance), companies are responding by issuing more green bonds. NTT as a group issued 40 billion yen of environmental bonds in 2020, making the upcoming issue a big increase. The company is expected to announce the bond issuance on Tuesday afternoon.
NTT is expected to issue three tranches of bonds with maturities of three, five and 10 years. Details, such as the coupon rate, are expected to be decided soon. Nomura Securities and Mizuho Securities will serve as lead managers.
NTT plans to use the funds raised to accelerate its decarbonization. It will allocate investment funds in solar and wind energy production to develop a renewable energy supply network within the group. NTT has announced plans to invest a total of approximately 450 billion yen in renewable power plants over the 10 years through fiscal year 2030. By the end of fiscal year 2030, the company aims to increase the share of renewable energies to 80% or more of the electricity consumed by its own group, and plans to cover half of this with its own equipment.
The goal is to virtually eliminate greenhouse gas emissions in the group’s data center and mobile telecommunications business unit, NTT Docomo, by fiscal year 2030. NTT will also promote the introduced unique optical technology for broadband infrastructure that can reduce power consumption, and set a goal of making the entire group carbon neutral by fiscal year 2040.
The global push for decarbonization is driving the issuance of environmental bonds across a range of sectors. Z Holdings, owner of Yahoo Japan, also announced that it will issue environmental bonds in July. The issue amount was 20 billion yen. Car maker Nidec launched a 100 billion yen issue in November 2019.