[NEWS] Hitachi announces collaboration with JPX, Nomura Securities and others to issue digital environmental bonds

Hitachi announced on the 16th that it will collaborate with JPX Research Institute, Nomura Securities, and BOOSTRY to issue a digital environmental bond called "Green Digital Track Bond" that utilizes IoT and blockchain platforms. This will be the second such bond to be issued in Japan, following the Japan Exchange Group.

Digital environmental bonds are bonds that use digital technology to improve the transparency of data related to green investments and to make data collection more efficient.

Green digital track bonds utilize a corporate bond-type security token (digital bond) scheme that utilizes the blockchain platform provided by BOOSTRY, in addition to the Green Tracking Hub developed by Hitachi and JPX, which allows timely reference of environmental improvement effects.

The four companies will continue to use the scheme they collaborated on in this case to promote the issuance of digital environmental bonds and make them available to many issuers and investors, thereby contributing to the realization of carbon neutrality for society as a whole.

Hitachi will use the funds obtained from the digital environmental bond to refinance the construction and renovation costs of its Central Research Laboratory "Kyōsō-tō" (energy-saving building), which was completed in March 2019 and achieved carbon neutrality in fiscal 2021, with the aim of achieving carbon neutrality in its business facilities (factories and offices) by fiscal 2030.

Issuing and managing digital environmental bonds through "ibet for Fin"

The digital environmental bonds being issued this time are public STOs (security token offerings) in which Hitachi is the issuer. STOs are a scheme in which issuers raise funds through "security tokens," which display stocks, corporate bonds, etc. on blockchain-based tokens instead of stocks or corporate bonds.

Digital environmental bonds are considered to be very effective in ESG bond markets such as green pounds if the environmental and social effects of the projects invested in can be shown in the form of measurable and comparable indicators. In issuing the digital environmental bonds, Hitachi has obtained a second-party opinion on the Green Pound Framework from Rating & Investment Information, Inc. (R&I).

Instead of being managed by the traditional securities supplementary transfer organization, these digital bonds will be issued and managed using the consortium-type blockchain network "ibet for Fin" led by BOOSTRY, and the business process from issuance to mid-term management and redemption will be completed using digital technology.

The bond original register will be managed on the Ibet for Fin system, enabling issuers to continuously grasp the bondholders, which was difficult with conventional corporate bonds.

In order to increase transparency in the use of funds raised through digital environmental bonds, Hitachi will use the Green Tracking Hub to automatically measure the energy consumption of buildings with energy-saving performance that have been funded, and disclose data converted into CO2 emission reductions and energy reductions by comparing with benchmarks. This allows investors to monitor from the outside at any time.

It maintains a high level of transparency that goes beyond just annual reporting. In addition, by linking data to BOOSTRY and recording the amount of energy reduction and CO2 emission reduction on ibet for Fin, it will be possible to increase the transparency and timeliness of data.

In addition to the data collection function from renewable energy facilities that the Green Tracking Hub already supports, it now supports data collection from buildings. In the future, it plans to gradually expand the range of green assets that will be covered.

Hitachi also plans to apply the mechanism that the Green Tracking Hub has for increasing the transparency of the environmental improvement effects of green projects to automate the issuance and certification of carbon credits and support carbon offsetting for business companies.

Reference:Announcement
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