American Express issues a green and social development bond
American Express Co., the country’s leading small business cards provider launched its first-ever environmental and social initiatives bond. The bond will test whether there are potential investors interested in investing in the future of the environment and social affairs.
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Specifically, the bond will target global investors with an interest in environmental investments. The company tasked Bank of America Corp, Morgan Stanley, HSBC Holdings Plc, and Wells Fargo & Co. to arrange and handle the bond.
An insider on the matter told Bloomberg that the bond will be made available to all interested parties from across the world. However, it will focus exclusively on environmental, social and governance issues. Additionally, there are possibilities of a dollar-dominated issuance to follow. This may in the future lead to the inaugural sustainability note offering if all goes well.
The proceeds from the bond would go into funding eligible green and social projects. These would include the purchase and fabrication of recycled materials from Amerca Express consumer and business cards. Further, the money will be pumped into waste recycling projects, green buildings and the enhancement of diverse business suppliers and vendors. Furthermore, supporting women and LGBTQ-run vendors.
The move by American Express comes at a time when companies and governments across the world are selling ESG-linked debt at a record speed. These projects have proven vital for providing funds to attain sustainability goals for many companies. Last year, global sales of green, social and sustainability bonds crossed the one trillion dollar ceiling for the first time. It is expected that this year the performance of such bonds will be even much better.
America Express claims to have been carbon neutral since 2018 on its website. The giant card company says 100% of its businesses use renewable energy across the world. Its decision to issue a global green bond just follows in the footsteps of its competitors such as Mastercard and Visa, which have issuers ESG-related bonds.