By Dieter Holger

 

Amazon.com Inc. issued its first sustainability bond at $1 billion to support environmental and social projects at the e-commerce giant as investors clamor for more of the bonds to green their portfolios.

Seattle-based Amazon said Monday that its bond would raise funds for renewable energy, affordable housing, cutting resources used by buildings and helping underrepresented groups enter the technology workforce through training. Amazon aims for net-zero greenhouse-gas emissions across its direct and indirect activities by 2040 and has rallied other big companies to target the same year.

An Amazon spokesperson said information on the bond's maturity date and yield wasn't yet available. The bond doesn't have special terms but Amazon has pledged to use the net proceeds for green or social projects, though the breakdown of funding for each project is also not yet available, the spokesperson said. Down the road, companies often provide an update on how funds from green or sustainable bonds were used.

Amazon ranks second among 18 publicly-traded e-commerce companies for its management of environmental, social and governance matters, including disclosures and programs, according to The Wall Street Journal's ESG scores. EBay Inc. currently holds the top spot in the e-commerce section of the rankings, which update as more data becomes available.

Unlike green bonds that focus on climate change, sustainability bonds are tied to both environmental and social efforts and have gained in popularity in recent years. Investors who want to boost the sustainability profile of their holdings tend to oversubscribe to the bonds.

Late last month, home appliance maker Whirlpool Corp. said it completed its first $300 million sustainability bond, a 10-year note with an interest coupon of 2.4% per year.

Loans that reward or punish companies with higher or lower borrowing costs if they meet self-made environmental and social targets continue to attract more corporate borrowers who want to put teeth behind their commitments. Beverage giant Anheuser-Busch InBev SA signed a $10.1 billion sustainability-linked loan in February.

The growing number of net-zero pledges from companies are expected to boost the sustainable-debt market to record levels, analysts say. The global market hit $2.2 trillion during 2021's first quarter and could surpass $3 trillion this year, according to the Institute of International Finance.

In 2020, companies and governments issued a record $732.1 billion in sustainable debt including bonds and loans, a 29% increase from 2019, according to BloombergNEF, a data provider.

Bookrunners for Amazon's sustainability bond are Goldman Sachs Group Inc., Bank of America Corp., Wells Fargo & Co., Morgan Stanley, HSBC Holdings PLC, JPMorgan Chase & Co., Citigroup Inc., Societe Generale SA, Deutsche Bank AG and TD Securities, the Amazon spokesperson said.

 

Write to Dieter Holger at dieter.holger@wsj.com

 

(END) Dow Jones Newswires

May 10, 2021 18:14 ET (22:14 GMT)

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