American Express Announces its Inaugural $1 Billion ESG Bond
American Express Company
American Express, a payment card services company, announced its first Environmental, Social, and Governance (ESG) bond. According to the recently formed American Express Sustainable Financing Framework, which is linked with the company's worldwide ESG strategy, the net proceeds of the $1 billion bond might be used to fund sustainable financing projects in the green and social categories.
The circular economy, which includes responsible production projects like the company's goal of having the vast majority of the cards it issues made of at least 70% recycled or reclaimed plastic by the end of 2024, is included in the green category, which includes green buildings, energy efficiency improvements, and renewable energy, as well as the circular economy, which includes projects like the company's goal of having the vast majority of the cards it issues made of at least 70% recycled or reclaimed plastic by the end of 2024.
Social projects include initiatives related to socioeconomic growth and empowerment, access to critical services, and affordable housing. Within two years of the date of issuance, all net revenues from the sustainable financing are expected to be fully allocated to qualifying projects.
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Green, social, and sustainability financing transactions will be guided by the company's Sustainable Financing Framework. The framework outlines the use of proceeds, the process for project evaluation and selection, the management of proceeds, and reporting in connection with green, social, and sustainability financing transactions. It was developed under the International Capital Markets Association (ICMA) Green Bond Principles 2021, the ICMA Social Bond Principles 2021, and the ICMA Sustainability Bond Guidelines 2021. Moody's ESG Solutions conducted an independent assessment of the framework.
The ESG strategy of American Express intends to deploy the company's resources to address important global challenges, assist individuals and businesses in thriving, and build equitable, resilient and sustainable communities.
The approach's three pillars are promoting diversity, equity, and inclusion (DE & I), building financial confidence, and advancing climate solutions. American Express established initial goals to guide the strategy, including a $1 billion DE & I Action Plan, a commitment to net-zero carbon emissions by 2035, and continued strong support for small businesses, including a goal of $100 billion in consumer spending at small, independently-owned retailers or restaurants on Small Business Saturday and other Shop Small campaigns from 2021 to 2025.
Source: American Express